Banks Find Ways to Resist ‘Great Resignation’

Everybody wants to work bankers’ hours, right?

Ask that question in the context of the “Great Resignation” and you’ll get a laugh from Arkansas bankers, but then you’ll hear serious thoughts on why the banking industry has avoided the worst of the pandemic employment upheaval.

“Employees like the idea of bankers’ hours until they see it’s not true anymore,” said Cody Knight, president and CEO of the tiny $121.9 million-asset Piggott State Bank in northeast Arkansas. “Our managers are sometimes dealing with banking issues way into the night. We come up here and fix customers’ debit cards at midnight. But for jobs like teller, the established hours can be attractive.”

Laura Andress, chief people person for Arvest Bank of Fayetteville, the largest bank chartered in Arkansas, says bank human resources departments have improved pay and benefits, offered more flexibility with shifts and reached out with diversity and job advancement programs. One goal was to counter the worker exodus seen more prominently in other sectors. Arvest, with $26.6 billion in assets and more than 200 Arkansas locations staffed by about 6,600 workers, is a far different employer than Piggott State, with its two branches and 24 employees. But regardless of bank size, job satisfaction and advancement potential are keys to keeping turnover down, Andress and Knight agreed.

“I don’t think banking as an industry is immune” from the hiring crunch, Andress said, even though Arvest’s overall turnover rate for several years has been 19%, far below the private industry average of 52% last year and the stunning 62.9% rate of 2020, according to the U.S. Bureau of Labor Statistics.

“Filling our frontline teller positions remains challenging in some circumstances, and we have seen similar scenarios even in IT, user experience, customer experience and finance roles,” Andress said. “We raised starting pay to $15 an hour, minimum, which, together with a robust incentive program and three types of profit-sharing, is very attractive. We also recently moved to a same-day interview-to-offer program that helps us onboard tellers more quickly.” 

Arvest, she said, has also been a leader in expanding weekday and Saturday hours. “That means we have to fill more positions to cover those hours.”

Crowe LLP, the global public accounting, consulting and technology firm, found in a poll of 437 financial institutions that median turnover for bank employees who aren’t officers has dropped from 23.6% in 2019 to 16.2% in 2021. Bank officers, who left their jobs at a 7.3% rate in 2017, departed only 3.3% of their positions last year, according to Crowe’s 2021 Bank Compensation and Benefits Survey.

‘Great Progress’

“The data shows that banks have been making great progress in reducing turnover, even during a time when many industries are seeing severe attrition in their workforce,” said Timothy Reimink, a Crowe managing director specializing in financial services consulting and performance improvement. “Banks are investing in their people and have taken steps to improve retention and their recruiting efforts by offering better benefits, more flexibility, and higher raises.”

The study noted that banking traditionally isn’t a high-turnover sector. Financially healthy in general, they tend to offer competitive salaries and do a good job keeping managers. Nonofficer turnover was 16.2% in 2021, down from 23.6% in 2019, according to Crowe.

Lori Ross, Arkadelphia president for $1.2 billion-asset Citizens Bank of Batesville, looked at the landscape from the perspective of a midsized Arkansas financial institution, one with 19 locations and 220 employees. She said turnover at Citizens was up slightly in recent years, but she was happy with banking’s situation compared with other fields. Retail trade, for example, had a 64.6% employee separation rate in 2021, the Bureau of Labor Statistics reported.

“We have not seen the banking industry experience the same level of turnover,” Ross told Arkansas Business. “We continue to see new talent enter our markets and have been fortunate enough to bring them into the fold.” She noted a strong sense of community among Arkansas banks, and said Citizens fosters that by investing in its team.

“We offer a few unique professional development programs, such as our certified financial coach (CFC) program … and internal incentives like our People First Awards that continue to keep employees engaged. Citizens Bank is also highly invested in financial literacy teaching in local schools, which not only equips the next generation for their own security; it introduces them to the banking industry as a possible future career.”

Once prospects are on board, Citizens works hard “to ensure our associates not only feel connected to the bank, but also to contributions in their community,” Ross said.

Through the pandemic, Citizens has raised pay and granted additional bonuses to help workers combat inflation, “starting with those most impacted by hardships,” Ross said. “We also have a great benefits package and reward our teams with additional time off and recognition programs.”

Knight, CEO of the Piggott bank, said he teaches financial classes to seventh- through 12th-graders, creating a hiring pipeline.

“I’ve had those who seem most interested to come and talk to me, and I tell them that even if they don’t decide to go to college, they can still make a good career in banking,” Knight said. “Honestly, I’d rather have somebody before they go to college so I can teach them our way of banking.”

His teller positions are full time, he said, because he had trouble filling part time positions in a small town. Piggott, one of two county seats in Clay County, has a population of about 3,900.

“Our tellers have to work once every four Saturdays, and for that they can take off a day of the week or get the overtime,” Knight said.

Nationwide, entry-level tellers made an average of $27,300 last year, about $13.65 per hour, but up 6.4% since 2019. Bank CEO pay, for comparison’s sake, was up 8.7% over the same three years, going from an average $231,000 to above $351,000.

“Banking jobs is a big category,” said Andress of Arvest. “Many big national-level banks do not encourage lobby traffic, so their staffing demands may be lower than a bank like Arvest.”

Her company’s relationship banker program allows cross-training tellers to serve customers more as consultants, helping with more complex transactions. “The program not only provides our customers with a better experience, but it gives our associates more opportunities for advancement,” Andress said.

Arvest’s robust diversity, equity and inclusion program also makes it a more attractive employer, Andress said, landing the bank on Forbes’ Best Employers for Diversity List.

The Crowe report said most banks have increased paid vacation and incentive pay for top performers, and 75% now allow some employees to work remotely at least one day a week.

Customized Compensation

Trey Deupree, a senior consultant with NFP Executive Benefits, told an American Bankers Association gathering in February that customized compensation plans financed with bank-owned life insurance can help retain employees. And because they are “nonqualified” plans under federal law, the banks can be selective in offering them.

Mel C. Martin, president and COO of First National Bank of Oklahoma, said supplemental executive retirement benefits had “been very well received” by employees of the $747 million-asset bank. “The cost of setting it up wasn’t even really a factor for us.” 

Lorrie Trogden, president and CEO of the Arkansas Bankers Association, got down to basics: Banks are comparatively  pleasant workplaces, and their management is versed in customer service.

“That includes their employee customer service, the way they focus and invest in employees,” she said. The average total compensation and benefits total around $85,000 per employee, Trogden said, and workers get to know their communities and customers.

“A lot of people stay with the same bank their entire lives, and you get to be there for customers’ life milestones like buying a first car, getting a house or starting a business. You get to celebrate those things with your customers, and it’s satisfying.”