Employee Turnover in the Banking Industry
Since most companies spend a lot of time, effort, and money to train employees, it is only imperative that they keep the employees they had invested so much on. It is the managers' responsibility to lessen employee turnover. Employee turnover can cost a company millions a year. Not only that, but it may also cost the company customer trust.
Employee turnover is defined as the entire process associated with replacing workers who were no longer working with the company. Another person must be hired and trained extensively each time a spot has been vacated. Employee turnover has remained a problem in the business sector, considering one of the hardest issues a business can face is finding and keeping good employees.
Causes of Employee Turnovers
There are many causes of employee turnovers. A worker may voluntarily vacate his or her position, or he or she may be terminated.
Why, you ask, would a person quit his job? There are a number of reasons. It could be the stress a particular job induces. It could be a person is extremely dissatisfied with his lot, which leads to detachment, and the inevitable desire to switch jobs. Poor management can be a factor. Other employees may also quit due to economic reasons – large companies are capable of providing better benefits, bigger paychecks, and more opportunities to further advance one's career. It might have something to do with the individual's personal life, such as death, or suddenly has to take care of a member of his or her family.
It has been determined that inefficient organizations tend to have a high level of employee turnover. Employees part of an unstable organization are likely to quit and look for more bankable companies.
Effects of Employee Turnovers
Employee turnovers tend to be very costly, what with separation costs that include separation pay, unemployment compensation, etc. When looking for replacements, companies would have to shell out money for advertisements, screening of applicants, interviewing of eligible applicants, background checks.
So, you've finally found a suitable replacement. Next step? Training the new guy. Supervisors and coworkers would have to invest a lot of time and effort into whipping the substitute into shape. Things are not going to get more productive until the person you've hired is fully capable and up to speed with the job.
Staff turnovers also put companies at risk – confidential business information could be leaked.
Cases of Employee Turnover in the Banking Industry
In 2001, the Bank of America experienced some problems with employee turnovers. The bank's staff turnover rate shot up to about 48 percent. Subsequently, the Bank of America sought to bring satisfaction to beloved employees with an ongoing corporate-wide yearly recognition program. It was the responsibility of the managers to booster their recognition programs, and they kicked off each meeting by expressing their gratitude to associates and reminding workers of other recognition options. Leaders encouraged people to nominate their colleagues. Staff were responsible for selecting the 'best of the best' for the yearly Award of Excellence incentive trip.
Zions First National Bank – which provides investments and mortgages and insurance services – is no stranger to employee turnover. The bank, which is a subsidiary of Zions Bancorporation, handles over 15 billion dollars worth of assets. It also has more than 2,300 employees working at 135 branches across Utah and Idaho alone. After experiencing employee turnover and understanding that this would both be very pricey and mean the loss of cherished customer relationships. Managers of Zions Bank maintained employee satisfaction and encouraged staff to give out suggestions and comments. The bank also frequently gave out surveys to further understand the needs of their employees.
Maintaining employee satisfaction is they key to preventing the tumult employee turnover brings. Having an efficacious applicant screening process can be very helpful and a cost-effective way of distinguishing qualified applicants who are capable of handling the job. Also, an effective management team is extremely necessary in any company. Managers must be honest and must be open to communication. Managers are responsible for maintaining a friendly atmosphere in the workplace and they must be honest whenever giving advice, respectful when giving orders, and must be professional at all times. The managerial team should be able to meet employees' needs in terms of security needs, social needs, and esteem needs.
Ongori, Henry. (May 22, 2007).http://www.academicjournals.org/ajbm/pdf/Pdf2007/Jun/Ongori.pdf.Available: http://www.academicjournals.org/ajbm/pdf/Pdf2007/Jun/Ongori.pdf. Last accessed May 25 2011.
Allegiance. (2007). Case Study: Zions Bank Lowers Employee Turnover.Available: http://www.allegiance.com/documents/ZionsEmployeeCaseStudyFIN.pdf. Last accessed May 25, 2011