Business Insider magazine states that high voluntary turnover rates are costing some banks up to one billion dollars every year. They say that this could lead to a possible banking industry leadership crisis in the near future. Part of this is because of public mistrust over financial mismanagement and regulatory punishments from governing bodies. Fortunately, there are best practices and financial services solutions available to remedy this problem.
The Hidden Costs of Turnover
The Society for Human Resource Management (SHRM) states that the average cost of hire is approximate $4,100 and it takes over 40 days to fill a position. A bank with high turnover rates and retention problems will accrue these costs through different stages. First, there are the costs of severance pay, temporary replacements and overtime for other staff.
Then, there are HR recruitment costs, which may include advertising, screening and interviewing. These costs can be minimized through outsourcing staffing functions to experienced service providers. Next, there are training costs, which includes orientation and the supervisors’ time coaching new hires. There may be lost productivity during the departure and initial training period.
Problems and Resolutions
Some of the most common reasons for voluntary unemployment include poor relationships with supervisors, work-life balance inflexibility and limited promotional and personal development opportunities. One of the best ways to minimize turnover is through stronger screening and recruitment solutions that create comprehensive pools of qualified candidates.
While there are HR software solutions and candidate screening systems that can help HR management, real-world relationships and HR brand marketing are important. Modern banking organizations must now deal with evolving regulations, stricter consequences and demanding job candidates. Dynamic workforce environments require innovative ideas that will help companies maintain optimal productivity and manage their talent.
Banks that develop consistent employee retention strategies will experience enhanced compliance, performance and customer satisfaction. The Bureau of Labor Statistics (BLS) offers additional financial industry sector statistics here.