Branch locations are closing and footprints shrinking, but branches continue to play an important part of customer experience. According to a recent JD Power U.S. Retail Banking Satisfaction Study, overall satisfaction rates higher among customers who use both the branch and mobile banking. When you consider that customers visit branches for human interaction, putting the right skillsets in front of your customers now ranks as more important now than ever.
A 2016 report by CNBC made some well-supported observations on bank branch staffing. Pointing to work by Bank of America, they found “the number of ‘sales specialists’ is up 13 percent year-over-year, while full-time employees, including tellers, are down 1 percent year-over year to start 2016.”
And at JPMorgan Chase, they noted a shift to more self-service offerings to free up specialists: “The bank’s traditional ratio of 60 percent transactional staff and 40 percent advice staff at legacy locations is flip-flopped at new, smaller centers, where 60 percent of the staff provides financial advice.” Other banks, including Bank of the West, are also rejiggering their advice-to- transaction ratio across branches with a focus on time rather than FTEs, targeting a 70/30 mix in the near future.
What’s the takeaway? Strategic staffing focus is shifting from reducing levels in branches to putting solid skill sets in front of customers. Today’s questions are directed to finding the right advice/transactional staffing mix in each branch or market; they also embrace where to deploy general sales specialists, mortgage, investment or business banking experts.
To showcase peerless staff skills, prudent retail banks rely on predictive analytics to determine optimal staffing mix and address the appropriate mix of universal bankers and personal bankers—as well as the optimal full-time part-time mix.
Right for the job: Position planning meets predictive analytics
Pete Daugherty, director of client management at Kiran Analytics, says, “Position planning driven by predictive analytics takes the traditional baseline staffing guidance and adds insight and specificity to that aggregate number.“
Daugherty explains it this way: “In an average market, optimal staff may total four tellers and four platform staff. In a static market where you’re looking for the most cost effective approach, you may have three universals, three to four tellers and one platform staffer. In a growing market, you may want half of the eight to be platform staff, with one specialized in investments or mortgage. You’ll save money and enhance revenue by investing in some markets and focusing on cost control in others.”
Eight factors to position your position planning
In developing your strategy, start with some basic information by identifying the following:
- The profitability potential for each branch and market: high, average and low
- Interdependencies between branches that indicate the need for market-level analysis.
- All positions you will use in your branch staffing mix, including: tellers, universal bankers, personal bankers, specialized personal bankers (investment licensed, business banking focused, and mortgage specialists), managers, assistant managers, and others
- Understand what these positions cost and the revenue you receive from each in varying geographies.
- The staff hours and training needed to help customers with digital banking and self-service demos
- The time needed for non-customer facing activities such as operations, training/coaching, compliance, etc.
- Which if any positions can be part time, along with the maximum percentage of part-time staff in any branch
- Your service level targets: All teller type transactions served within x minutes and all platform type transactions served within y minutes. Establish a tolerance range for these targets. Do you want to meet them 70, 80, or 90 percent of the time?
Finally: Don’t rely on your internal data alone. Use external data to understand market potential in areas such as housing growth, new business starts and investable assets. Don’t assume that your current customers represent the true opportunity in each market.
As you synthesize this data, develop several different staffing complements that will generally meet the needs of each of your branches or markets.
“You may not be able to move to your optimal staffing model in one step,” Daugherty points out. “By developing a sequence of models you have a plan.” He adds that, “Staffing errors are not easy to correct. Hiring, training or potentially displacing people is difficult and expensive. By understanding your optimal mix by branch and market, you’ll make staffing decisions that maximize potential.”
Where high technology meets branch staff philosophy
With the rapid growth of mobile banking and in-branch self-service technologies, banks must evolve their branch workforce to be tech savvy and digitally native. What’s the first step in making that happen? Your branch associates need to engage customers—and use the same products and services they hope to introduce.
“Often branch staff aren’t well-versed in their bank’s own digital capabilities,” notes Tom McDermott, co-founder and managing partner of Inver Consulting Group. “Regardless of their position, every branch employee should be an evangelist for technology so they can help improve customer adoption.”
Putting it all together: Staffing your way to success
Daugherty sounds one note of caution: “Making the wrong decision on putting the right people in the right place at the right time impacts your customers. Too many staff in the branch wastes money, too few wastes opportunity.”
Thus as you establish and execute your staffing plans, recognize it as a continuous process. Customer behaviors will continue to change; markets will evolve; your delivery strategy will develop.
Yet building an analytically based, repeatable process for matching staff to shifting opportunity will hold the key to every retail bank’s future success. In a world of constant technological change, this proven piece of wisdom truly represents a high-tech constant.
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Deb Stewart is an independent consultant working for the financial services industry. She is based in Charlotte, N.C. and can be reached at [email protected].