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Gauging the “fed up” factor E-mail

Would one of your employees jump industries because of regulatory hassles?
 September 23, 2011

By Karen Holliday, a freelance business writer based in Tupelo, Miss.

While many employment-related headlines have focused on staff reductions, particularly at some of the larger financial institutions, some bank managers worry about the potential for their banking talent to voluntarily exit the industry, given economic and regulatory challenges that continue to alter the competitive landscape. There is some anecdotal evidence this is occurring.

Periods of change can often serve as a prompt in assessing career goals and objectives. Bankers possess a variety of transferable skills ranging from accounting to technology to business development that are applicable to any number of industries or entrepreneurial endeavors.

As some consultants point out, however, there is a huge difference in thinking about leaving one’s job in a selected industry and actually doing it. Further, much would depend on the local or regional job markets. Not surprisingly, it’s difficult to get bankers to go on the record on the subject, but the people willing to be interviewed offer a mixed response. Some say that in their regional areas, they have not seen any consistent pattern of people voluntarily exiting banking. Others relate that they have seen some instances of people moving.

One manager at a Midwestern community bank with more than $1 billion in assets says that while such exits were always a possibility when other industries were doing well, he has recently lost three 15-20 year veterans who basically said they didn’t want to fight the bank regulatory battle anymore. One took a cut in pay, he notes. The banker adds that a much larger bank in his state faced a similar challenge.

Others describe what they perceive as a sense of frustration over how banking is portrayed in the media. Kenneth Friedel, a manager in Kennedy and Coe LLC’s financial institutions group, categorizes what he’s hearing as “banker fatigue.”

While opinions vary, consultants and bankers agree on one point: Now is the time to be attuned to human resources issues, particularly those such as retention and leadership development.  Says Friedel, “It’s important to engage employees with a sense of purpose individually and institutionally.”

One way to do this is to engage them in helping to restore the industry’s image as well as encouraging them to take part in campaigns to prevent or roll back unnecessary bank regulations. ABA and the state bankers associations have grassroots lobbying tools to facilitate this. In addition, the ABA produced an image toolbox that is available to all bankers. (It can be found on aba.com under the Proud to be a Banker blog.)
Why people leave…and stay
John Challenger, CEO of Challenger, Gray & Christmas in Chicago, says several factors enter into career-move decisions. He says that the potential for departures may occur in banking or other industries if there’s a feeling that longer-term professional growth opportunities have diminished.

A survey of human resources managers conducted by Challenger’s firm and published on its website this summer provides additional substance to the conversation.  Although not focused specifically on banking, the survey revealed that employers are increasingly concerned about losing top talent to other companies, with 42% of respondents saying they were growing more concerned about other companies poaching top talent as the economy improves.  Additionally, the survey noted that the potential for top talent actively seeking new opportunities was another factor generating concern.

Alan J. Kaplan, president and CEO of Kaplan & Associates Inc., states that while he has seen some people leave the industry, he has not observed the type of consistent pattern that would illustrate a widespread trend. He adds that depending on the regional market, there may be a limited number of options regarding financial jobs in or out of banking.

Some consultants say that they have seen managers make a move from banks to related financial services providers or from larger banking companies to smaller institutions when more senior-level management roles were available.

While the degree to which some bank managers may be considering moves outside of the industry is debatable, Hope Hughes, U.S. banking leader of Deloitte Consulting LLP’s Human Capital Practice, stresses the need for companies to assess why people are leaving and what factors are in their control in their efforts to retain top-quality talent.

Dr. Ken Cyree, dean of the School of Business at the University of Mississippi, agrees and adds that bank employers should also be examining the characteristics that motivate the next generation of talent in order to avoid a leadership vacuum down the road.

While Cyree notes that a community-oriented focus has long been a defining characteristic of the industry, it is a high priority for tomorrow’s leaders who “see their work life as a way to make a difference.”

“For this group, it is extremely important to have a connection to their local communities through their work,” Cyree states.
Leadership development helps
Rod Taylor, president of the executive recruitment firm Taylor & Co., says that banks should not overlook the influence and impact that trusted leaders have on the next generation of talent. While the industry has been focused on a number of competitive priorities in recent years, experts say that leadership development and coaching are critical components in building and retaining talent.

A survey conducted two years ago by the ABA and the Corporate Executive Board 
provides more perspective on the topic. It revealed that U.S. banks spent an average of $650 per employee on training while other successful companies in other industries spent an average of $1,100 per employee. The study also indicated that while bank CEOs were aware of the importance of talent and linked talent to their institutions’ overall success, many had talent management practices that were only partly in place.

Jim Edrington, executive vice-president of ABA’s Professional Development Group, says that since the study was released, “we have seen a number of banks that have adopted a stance of being an employer of choice and have used that as a strong recruiting tool.” He adds that several bankers have indicated that they are focusing on strategies related to the study’s recommendations. For example, one key finding emphasized the importance of having well-defined development programs in place, and Edrington says he is seeing that in practice. 

Kirsten Marriner, senior vice-president and director of HR business consulting at Fifth Third Bank in Cincinnati, credits initiatives such as the company’s management and leadership curriculum as well as what she describes as “competency models for key jobs families” as vital elements in Fifth Third’s human resources efforts. Notably, Fifth Third has been a recipient of  Gallup Great Workplace Award honors.

Marriner states that Fifth Third has been proactive in articulating to employees what it takes to be effective in building their strengths in their desired career paths. Employees are also apprised of  any transitional skill sets that would be required if they desired to pursue alternative career paths within the Fifth Third system.

Patrice Douglas, executive vice-president with Oklahoma City-based First Fidelity Bank, says that while bankers may not be able to control external factors affecting the industry or their company, they can set the tone of leadership and professionalism in their internal work environment. Douglas says that creating an environment where people know each other and work toward common goals is an important part of that process. “We give people the option of additional training and we want to create a culture where people feel like they are always growing and learning.”
Deloitte’s Hughes underscores the importance of employees feeling that they are adding value in their chosen careers. “People are looking for opportunities for growth and development within companies and within the industry.”

In summary, consultant Friedel advises that it is important to maintain a dialogue. “Are your employees engaged and are you listening to what they are telling you?” Friedel asks. “Are they coming up with suggestions and ideas or complaints?”
[This article was posted on September 23, 2011, on the website of ABA Banking Journal, www.ababj.com, and is copyright 2011 by the American Bankers Association.] 
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