Banks are planning to pay more employees at above-market rates, according to the 2016 Financial Institutions Compensation Survey by Crowe Horwath LLP.
The survey also found that turnover is up and staffing levels are increasing across the banking sector. Meanwhile, bank employees are changing jobs at the fastest pace in a decade, with non-officer turnover at 18.7 percent and officer turnover at nearly 7 percent, the survey said.
“Turnover is expensive because of the costs to replace lost employees and train new ones, and because of the resulting loss of productivity,” Tim Reimink, a managing director in the Crowe financial services performance consulting group, said in a written statement.
“Two practices for banks to help minimize turnover are assuring periodic, worthwhile performance conversations between employees and their managers and surveying employees to understand their concerns and level of engagement.”
Crowe, one of the largest public accounting firms in the country, conducts the annual survey, which is now in its 35th year. The survey compiled data from 378 financial institutions.
During and after the Great Recession, banks tended to reduce or keep staff levels steady. But in 2016, bank employment has returned to pre-recession levels. The survey found only 3.6 percent of banks plan to reduce staffing and 34.1 percent plan to maintain staffing levels. About 36 percent of banks are planning for normal growth and 13.8 percent are aiming to expand.
Reimink said the survey results show the battle to find and retain talent is becoming even more heated and that banks must have specific tactics for attracting employees, including millennials. That could include relaxed dress codes and the ability for employees to work offsite, he said.
Also, the percentage of banks that plan to pay salaries higher than the market has increased steadily over the past four years. This year, 28.5 percent of banks reported plans to pay more than 10 percent above market, which is a 5 percent increase over last year.
“Putting more emphasis on pay is a good way to attract and retain high performers who are motivated by money,” Reimink said.•