Slowing Down the Revolving Door
Finnegan, Richard P., ABA Banking Journal
Employee turnover is a major cause of poor service and lost business, and will worsen if current trends continue. To compound the problem, banking's entry-level workforce is shrinking at a time when institutions are wrestling with high salary costs, placing bankers at a major disadvantage in an employees' market.
Furthermore, the industry's stress on running " lean and mean " requires higher performance from all employees and less tolerance for poor performers. And deregulation has increased customer expectations for service and employees' career opportunities.
The message to American bankers is clear: put winners in every job and find ways to keep them.
The real world. Me message is very clear, but the solutions haven't been. Most current literature on employee turnover focuses on why employees leave and how to retain them. Many of these recommendations appear to make sense and can indeed be applied successfully.
However, these articles generally assume that middle management considers itself responsible for reducing turnover. As a result, central support staff develop career-path models, incentive plans, and other well-intended retention tools. Then they ship these tools to line managers for implementation. No one stops to ask three key questions:
* Who is responsible for employee turnover?
* How will they be held accountable?
* How will their success be measured?
The answers must be settled before the war can be won.
Drained job pool. SunBank, N. A., is a $4 billion-assets commercial bank headquartered in Orlando. It has 65 branch offices and 2,100 employees. It is a subsidiary of SunTrust Banks, Inc., Atlanta. Like most banks, SunBank, N.A., challenges managers to simultaneously provide outstanding service and closely control costs.
The Orlando area abounds with service jobs, mainly because of the 25 million tourists who visit nearby Disney World each year. Me need for qualified service employees far exceeds the available talent. To survive in this market, a bank must be able to keep competent workers.
SunBank had a troublesome employee turnover rate from 1982 through 1987. At the end of that period its annualized turnover rate reached 35.4%. In January 1988, Buell G. Duncan, Jr., chairman, president, and CEO, challenged the executives who reported directly to him to make reducing employee turnover their top strategic objective.
Duncan told them the bank could not meet its goals if it continued to "play with rookies." Given that charge, a team of human resources officers and line managers developed and implemented a plan which included these strategies:
(1) Make line managers accountable for turnover.
(2) Set goals.
(3) Determine the costs of turnover.
(4) Determine the types of jobs that have the highest turnover.
Someone is responsible. Executive management made line managers accountable for reducing turnover for several reasons.
One is that many common causes of turnover can only be solved at this level. Line managers are principally responsible for hiring, paying, training, directing, and coaching employees. Also, putting the challenge on line managers' shoulders reinforced management's efforts to encourage line manager "intra-preneurship," allowing each manager freedom to apply resources to each challenge as he or she sees fit.
Additionally, management felt that SunBank already provided the necessary support tools-including strong supervisory and skill training programs. So no new compensation, career-pathing, or other centralized turnover-reduction programs were implemented (with an exception for tellers mentioned later). Top management expected line managers to make better use of what was on the shelf.
Setting goals. Executive management believed that turnover-reduction goals should be set in order to measure performance and identify success. …