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Banks are tackling a variety of challenges to attract new employees and retain them.
By John Hintze
youhe red-hot market for banking jobs, from branch staff to corporate-level executives, has cooled somewhat since early 2022, but it remains strong, requiring most banks, if not everyone, please provide a variety of carrots to retain staff.
The Labor Department recorded 1.7 jobs available for each unemployed worker in October 2022, down slightly from the start of the year, but it’s still a tough time for employers. Banks aren’t the only ones struggling to hire and retain employees, though rumors of an impending recession have increased their leverage.
“Because of the economic talk, people are more willing to commit to taking positions,” says Brandi Britton, CEO of talent recruiting and consulting firm Robert Half. “They still have quite a few options, but from their point of view that may not last forever.”
However, Britton says, it is still difficult for employers to find good talent and retaining it is critical, requiring some banks to risk rapidly promoting junior-level staff to fill vital positions.
“At our bank, we are mitigating this issue by having strong internal development and training for entry-level candidates with little or no banking experience and developing them to fill these roles,” says Maxine Hart, director of human resources at Reading Cooperative Bank. in Reading, Mass.
Hart adds that the most challenging positions to fill in Reading have been experienced customer service banking specialists, as candidates seek higher-level positions for which they lack sufficient experience and skills, or positions outside of retail banking.
“Other industries are recruiting candidates with strong customer service and retail banking experience, so they have more job options available to them,” Hart adds.
Susan Pardus, Partner at KLR Executive Search Group, agrees that the demand is very high for retail staff, but also for commercial banking and business lenders and senior executives, especially financial professionals, as well as human resources professionals.
“HR demand reflects both COVID burnout, with HR professionals leaving and needing a change of scenery, and companies realizing they need to invest in talent development, employee engagement employees and diversity, equity and inclusion efforts,” says Pardus.
Given the high turnover since the pandemic began and the continuing shortage of available talent, banks have adopted a series of carrots to attract new employees and retain them. Corporate culture is a key consideration, Hart says.
“While we interview the candidates, they interview us,” he says. “And because they have more options, they look for the organization that best fits their values.”
That adjustment clearly depends on what the candidate wants and what the bank offers. However, compensation is often a priority, and given the tests and challenges of the pandemic, employees are increasingly demanding a fair and transparent approach.
Pardus strongly advises banks to institute a merit system that quantifies the success of top employees, and subsequent rewards, to justify paying them more to stay. Such a system requires careful documentation of employee performance, to ensure compliance with equal pay laws that can vary by state.
For example, the Reading Cooperative, with $760 million in assets and 10 locations, bases all employee bonuses on the same scorecard, whether it’s a part-time cashier or senior manager, and they receive the same bonus percentage. Employees receive bi-monthly feedback and information on tracking their scorecard and how to increase the bonus percentage.
In operation for a decade, the bank’s “Stakeholder Scorecard” was a boon in the wake of the pandemic. It deepened engagement with employees, Hart says, and helped them “better understand the successes and challenges facing the bank in connecting their activities to the organization’s goals.”
Cash compensation is more important than flexible work arrangements for lower-level employees in an inflationary environment, according to Pardus. He noted that bank clients adjusted salaries by 2.5-3% in early 2022 and then again in the middle of the year, to retain employees. At a recent meeting with bankers, some planned to give each employee a one-time bonus of $2,500 and another 3 percent of salary, “just for sticking around,” he adds.
In addition, banks have long reimbursed employees for tuition, relocation fees, and other costs that ultimately benefit both the employee and the bank. Repossession clauses that require them to pay the bank back if they leave before a specified time are effective retention tools, Pardus said.
“We heard at a recent bank CFO forum that the need to pay is more effective in keeping someone in the bank than a promised bonus in 12 months,” he said.
He adds, however, that larger long-term bonds, say at the end of a three-year period, have proven to be effective retention tools for money center, regional and, more recently, medium and small banks.
“In recent years, we have seen long-term incentive plans used more actively by all banks, regardless of ownership structure or size,” says Pardus, adding that awards have increased in complexity and now they are more tied to long-term plans. company performance. “It’s a great way to retain people because if they move somewhere else, they’ll leave too much behind.”
Working remotely, at least in a hybrid way, is another carrot banks dangle, albeit sometimes grudgingly. “Many small banks are trying to require employees to work in the office five days a week, while midsize banks offer more flexibility,” says Pardus. “One of the first questions candidates ask is ‘What is the company’s flexible working policy?’”
She says requiring employees to come to the office the same three days a week is a common approach. Some banks may request three days, but require everyone to come on a specific day to interact.
When remote work isn’t possible, such as at a bank branch, Britton says, the key is to offer flexible hours. Reading Cooperative Bank offers a hybrid work environment when practical, but found that employees prefer a flexible work arrangement rather than lock themselves into a few days of remote work each week.
“We’re finding that our younger professional employees value office work because of the mentoring and development they get from being in the office and having access to their manager,” says Hart.
Several of the largest banks, such as JPMorganChase and Goldman Sachs, have strongly encouraged employees to return to the office four or five days a week, with mixed results. Robert Iommazzo, managing partner at SEBA Executive Search, notes that when banks compete for talent in sectors like technology that provide significant flexibility and often the option to work remotely, they may need to go with candidates with fewer experience if they want new employees. mainly in the office.
He adds that hybrid work is likely to stay here for a while, but it’s too early to say if it will stick around, and he wouldn’t be surprised if banks return to a pre-COVID-like work environment eventually. Asked if a COVID surge this winter, as some predict, could reverse progress in the drive to return to the office, he says: “I don’t see a potential COVID surge having a long-term impact on returning to office.” the office. COVID is old news right now.”
John Hintze is a frequent contributor to the ABA Banking Journal.
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