Banks Need Training to Retain Top Talent
U.S. banks risk losing top talent if they don't start developing that talent, according to a survey released by the American Bankers Association and the Corporate Executive Board. U.S. banks spend an average of just $650 per employee on training while successful companies in other industries spend an average of $1,100 per employee. The talent management study showed that banks are under-developing high performers, and are therefore at risk of losing them and sacrificing long-term productivity.
While banks currently hire 60 percent of their employees from within, the study reveals that 40 percent of bank CEOs responding believe they are not doing enough to help their employees grow, adversely impacting banks' development of clear succession plans.
"The study raises the question: what is being done to prepare the next generation of bank leaders?" said Doug Adamson, executive vice president of ABA's Professional Development Group, which sponsored the study. "High-performing employees have told us that in order for them to stay and be more productive, they need to be recognized as top performers and have well-defined development plans in place," he said. The survey demonstrates that banks' dependence on internal talent makes ongoing development critical to prepare employees to take on higher roles.
"Engaging your employees will drive retention and bottom-line results," said Russell Davis, managing director of the Corporate Executive Board's Financial Services Practice. "One quarter of high potential employees are considering leaving their organizations, and those folks put forth 21% more effort than their disengaged peers. Today, every bank risks losing its future talent base."
To find out which factors inspire high-performing employees to stay with their institutions and increase productivity, CEB researchers conducted a separate poll of 11,000 employees and their direct managers from 59 successful businesses across the globe. They found that the following factors are most likely to increase employee potential:
- Talented managers who provide leadership - 37 percent increased probability
- Good working relationships with fellow employees - 35 percent increased probability
- Recognition for good work - 28 percent increased probability
- Intelligent support staff - 22 percent increased probability
- Exposure to senior management - 21 percent increased probability
"As a service industry, we all recognize that employees are our most important asset," said Adamson. "We know that high-performing employees contribute to financial performance, create a competitive advantage, contribute to sustainable growth and differentiate the organization as an 'employer of choice.' When we pull out of this current economy, employees will remember how they were treated. If they were treated well, banks will be even stronger than before."
For an executive summary of the study, click here.
