EMPLOYEE RETENTION AND THE 9TH ROCK

We could not help but notice yesterday that poor Pluto is in danger of losing its status as a planet. It seems that by planetary standards, it's too small, too far away and just not spectacular enough to warrant continued inclusion in our solar system. Back in 1930, earth was all too happy, even ecstatic, to find this little guy. Without bright rings or fiery volcanoes, Pluto had little in the way of promotion. Sometimes, bank employees get the same treatment. How to hire, retain and motivate employees are a growing challenge as banking becomes more sophisticated requiring higher caliber employees is required. For independent banks, a major issue is employee retention. In a small organization, how do you keep employees sufficiently engaged given that there are limited advancement opportunities? We surveyed 5 banks that have been recognized in the field to ask them for their recommendations. Here is some of their guidance: 1) Eliminate policies and practices that block internal movement. Allow, and even encourage, employees to move between departments. Banks should show a clear preference for hiring from within. Giving employees a path to different avenues of the bank helped one bank reduce turnover to half of the industry average. 2) Maintain a strong commitment to training. Banks that have a defined training plan, even if is a series of outsourced workshops, have proven to have happier employees. One bank we talked to positions training as a "tool for employee development, either at our bank or at a competitor." This bank clearly uses training as a differentiator and when employees get recruited at other banks, they are disappointed at the potential bank's lack of training. It is better to have well trained employees and risk some attrition than to not train them and have them stay. 3) Create a strong mentoring culture; in fact, make it a perk to be named a mentor. Not only does it give recognition to the mentor, but this helps promote quality traits throughout the organization. Further, mentoring provides a "touchstone" for the new employee to latch onto further helping with retention. 4) Keep career development and performance appraisals separate in order to do a better job at both. Often times, these together, running the risk of confusing the message. Talk about career development in a separate setting to give it its full due. 5) Create alternatives to traditional career ladders. Small banks have limited upward mobility. One smart bank developed a program called "The Knowledge Resource." Through this program, employees with diverse skills go on "loan" to different departments (including board appointed positions) for short-term assignments. This allows employees greater recognition throughout the bank and gives additional training opportunities. Pluto the dog is warm and fuzzy, Pluto the planet, not so much. The larger and more bottom line oriented a bank is, the more it needs to focus on employees. If planet was bettor supported and mentored, we have little doubt that it would be in a much better stead. It all started when it was adopted into our system and named after the god of the underworld – how could it possibly succeed? Given that people are critical to any independent bank's success; shouldn't we give employees more support than that icy, non-planet?