It’s clear the decline in branch transactions has big implications for branch staffing and organizational roles. Most branches today need only universal bankers, who can perform both sales and service transactions.
But many banks are stuck with an old, outdated model where historically defined roles dictate staffing, rather than the demands of customer arrivals. Here’s what I mean. The typical branch requires:
- two tellers to cover both dual control and “swivel” between the teller line and drive up window
- one customer service representative in the lobby
- one additional full-time employee (FTE) to insure adequate overall coverage for the total hours the branch is open
- one manager
That makes a minimum of five just to keep the doors open and the lights on.
Here’s the disconnect. We analyzed thousands of branches and compared their staffing levels to teller and sales transactions. Forty percent were staffed at the minimum based on role and security requirements, even though customer traffic was insufficient to demand that level of staffing. Another 25 percent were within one-half an FTE of the minimum requirement, and—with declining transactions—likely to soon shift to minimum staffing.
That’s an astounding 40-65 percent of branches staffed higher than customer traffic dictates. That’s not sustainable.
As branch activity declined and banks reduced staffing to the minimum necessary, many have tried to improve efficiency by cross training staff and call them “universal.” Their logic is that bankers can open a teller drawer if there’s a line at the window or help in the lobby if people are waiting.
But this highlights a basic flaw: If the branch does not have much traffic, that means no lines and no need to flex between roles. Staff members end up maintaining traditional roles and too often fill their time with “adminis-trivia” as they wait for customers to walk in the door or arrive at the drive-up. Hence the complaint: “We trained our staff to be ‘universal’ and even paid them more, but we aren’t getting results for the effort.”
Rather, branch management strategy needs a complete change: no longer driven by “I do this, you do that, and we help each other as needed” but rather a team of utility players whose job is to perform all the functions in the branch as needed.
So: What are the roadblocks? What gets in the way?
- The Teller Line. Yes, it would be ideal if every branch had open teller lines or pods with cash recyclers. But this investment takes time and capital, and many banks set internal obstacles by assuming they need to remodel branches at relatively high cost. Do this: Spend $10,000-$25,000 to open the end of the teller line so staff can flex in and out and not remain stuck behind a physical barrier with locked doors that keep them out of the lobby. If you can afford the cash recyclers and pods, great! But don’t be held up by trying to do everything at once.
- Training. Many financial institutions possess most of the training elements needed for success. After all, they have trained tellers, customer service representatives and personal bankers for a long time. But they don’t necessarily sequence and structure their training around these new roles and lack trained mentors in the branch to conduct the right training mix. New tellers may get on-the-job training from senior tellers, but it rarely goes much beyond that.
- Incentives. Changing roles without changing incentives creates a setup for failure. If you want the group to function as a team, then you need strong team incentives. If you don’t eliminate or severely limit individual incentives, then you send mixed messages. The one that impacts their paycheck is the one that will dominate.
- Teamwork. This new method of managing assumes the branch is staffed with a team of personal bankers. Sure, there are different job levels and different individual skills—but that is true today. You should expect that universal bankers are fully capable of selling consumer and small business deposit products, consumer loans and potentially small business loans (with simplified processes).
- Choreography. Universal bankers rotate to insure adequate contacts to keep their skills up and reach sales goals. This may mean establishing a desired threshold of total personal servicing time over a week or month; for example, not to exceed 30 percent. If your universal bankers spend more time than that behind the teller line, then they are not universal bankers: They are tellers. Set the expectation that there is no dead time waiting for customers to arrive. Even a 15-30 minute slow period offers enough time to make phone calls, set appointments or conduct on-boarding calls.
- Branch manager. Change the perception of the branch manager role from the most skilled person on site who handles the more complex issues to the team coach. They should spend most of their time coaching and participating in joint customer meetings with staff. That way, others learn from them and the whole team enhances its skills.
Finally, there is one Big Roadblock: culture change.
Change is hard and often makes it difficult to stay the course. One senior retail executive at a bank that implemented a very successful universal banker program likened it to running uphill. She said: “Lean in, take shorter steps, but keep going!”
Great advice. Don’t let these roadblocks stop you or cause you to implement half measures. Take shorter steps but keep going: Shorter steps will, in time, lead to great leaps forward.
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David Kerstein is president of Austin, Texas-based Peak Performance Consulting Group, which specializes in community and retail banking strategies. He can be reached at email@example.com.
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