The ‘People Process’ in Branch Productivity

With many financial institutions (FIs) facing another year of declining average retail branch transaction activity and rising payroll costs (40.2% and 76.1%, respectively over the past two decades, per FMSI’s Annual Teller Line Study), upper management in most companies is actively seeking ways to reduce branch expenses, increase sales or both.

Labor, of course, is usually the biggest expense for any branch, and it is one that is largely overlooked as a place to reduce costs and increase productivity. We have written previously about how FIs can reduce expenses by optimizing teller schedules, especially using third-party tools that harvest and analyze transaction data to identify areas of payroll opportunity. However, improving “people processes” – changing the way your staff works, thinks and performs, can be just as beneficial for the bottom line.

Tweak your staffing mix. Require your branch managers to analyze (and not estimate) the staffing mix in terms of tellers, sales/customer service associates and managers. Next, have them ask each employee to report how many hours they spend performing their core functions and how much time they spend “helping out” with other functions.

Although an assistant manager servicing an important customer may constitute a valuable use of time, the same isn’t true if that highly compensated employee is jumping onto the teller line every time there is an account holder waiting in line. Many branches get caught in this exact dilemma when they attempt to reduce staff without having an accurate picture of when tellers are needed most. If you see patterns of such activity, consider a thorough evaluation of scheduling methodologies to increase efficiency and ensure that employees are focusing on their primary responsibilities.

Overhaul your incentive programs. Incentives are a powerful means of increasing productivity. They work especially well when they reward both individuals and teams (and even entire branches). Group programs encourage teamwork and provide productivity benefits outside the immediate goal of transaction efficiency.

Goals can be set using a variety of metrics. Teller incentives can be based on achieving a certain number of transactions per shift or hour, although the latter is difficult without technology that harvests and processes transaction data. Incentives can also be based on mystery shopper scores, transaction processing accuracy or volume of teller referrals for new business that sales associates subsequently close.

For lobby personnel, incentives can be based on cross-selling volume as well as wait times and assist times. (To accurately measure wait times and assist times, you may want to implement a lobby tracking program, or at least a computerized sign-in/check-out solution.) Finally, if your bank already uses incentive, benchmark or scorecard programs, encourage management to reassess them and possibly start fresh. Your 2013 programs should reflect where your branches are now and they should be customized to each individual branch’s challenges.

Create a process improvement program that asks branch staff to consider questions as they go about their day and propose solutions that will effect positive change, then encourage them to submit two specific things they would change on a monthly basis. Possible questions include:

  • What can we change about our daily routines and tasks (those of the employee or others) that will save time and/or effort?
  • How can we perform tasks more quickly or accurately?
  • How can I (or we, as a team) improve customer service, such as reducing the time (or the perceived time) customers wait for assistance?
  • What will help us close more sales and strengthen our relationship with customers?

Create a team, perhaps composed of staffers from multiple branches, to evaluate the ideas for implementation, but don’t hesitate to allow employees to vet each other’s ideas, too. Those who can directly relate to an idea are often best able to see its benefits and drawbacks.

Finally, implement the best ideas and then reward the staff, teams and/or branches whose concepts bear fruit, whether it’s a bonus, a team outing or some other token of appreciation. To harvest the widest possible pool of ideas, also consider giving small awards to the personnel who submit the most ideas that make it to final consideration.

Corporate wellness is becoming a major topic for companies of all sizes and banks are no exception. While you must be careful not to engage in discriminatory behavior, there is no reason you cannot challenge all employees to improve their health in 2013. Healthier and fitter employees are generally more productive and their lower rates of absenteeism reduce payroll expense. Implement a dedicated group wellness program and you might also reduce health insurance costs and increase employee engagement.

Team spirit is extremely valuable in the branch environment. However, true team spirit is easier to achieve when employees clearly understand the roles of team members and team leaders. Create a program that helps employees understand the role other associates play and you’ll improve service, accuracy and productivity. Such programs can take many paths, from role-playing sessions to group events where staffers share “tales from the trenches” with other personnel. This isn’t about cross-training, rather, it’s a “walk in my shoes” effort that’s about building meaningful connections and lasting understanding.

Mr. Scott is President/CEO of Alpharetta, Ga.-based FMSI, which provides financial institutions with business intelligence and performance management systems for efficient branch staff scheduling and lobby management. He can be reached at [email protected].