Banks are counting on part-time help to fix a big-time problem: branch costs disproportionate to a dwindling number of customer visits.
As more people bank online, full-time workers are that much more idle, but their wages and benefits are locked in as an expense.
"Part time allows you that flexibility" to better contend with fluctuating branch traffic, says Terry Moore, the managing director of the North American banking practice at Accenture.
The move is an about-face for banks, considering that part-timers were among the first layoffs prompted by the financial crisis. Since branches remain important for some customer interactions, doing away with them is not an option, and banks must look for ways to make them more efficient. That means the type of workers banks could spare as the economy collapsed-homemakers and students who work flexible hours-are becoming more valuable as it recovers.
People still want a place to open an account or ask for advice about saving for college, even though they're coming into branches less often. Yet branches generally aren't well-suited for that type of business, experts say. Most of the roughly 98,500 bank branches across the country were designed for cashing paychecks. Think rows of teller stations with a few semiprivate cubicles off the lobby.
The financial justification for that kind of operation is deteriorating. Banks are making less money servicing deposits. New restrictions block the rich overdraft charges they used to get.
"Branches were initially designed to basically get checking accounts. They were funded by the fee business," says Darryl Demos, a managing director with the consulting firm Novantas who advises large and midsize banks on branch operations. "The fee business goes away. You have to take a long, hard look at your franchise."
To drive down the cost, "we need to go to variable staffing," he says.
Banks generally don't disclose staffing details, and several declined to comment for this story.
However, PNC Financial Services Group reported in October that the percentage of part-time help in its branches has been rising incrementally but steadily this year. About 18.5% of its roughly 26,000 retail workers were part time at the end of September, up from 18.3% in June and 18.2% in March.
Demos says his clients are rattled by what's happening at branches, which tend to account for more than half of expenses.
Though people are going into them less, industry research shows consumers still want lots of branches. It's the most important factor they weigh when picking a bank.
Yet the average bank branch booked fewer than 9,000 transactions a month in the first half of 2010, Demos says. During the first six months of 2007, the per-branch transaction average was more than 10,000, according to Novantas surveys and client data. The average is on track to fall below 8,000 in 2013, the firm says.
Data from Huntington Bancshares sheds additional light. In September the Columbus, Ohio, company said that 72% of its business customers visited one of its 600-plus branches in the last 30 days. The share was 64% for retail customers and 76% for private banking customers.
The takeaway is that branches are being used less often and for different reasons. So paying several people to work eight-hour shifts handling transactions makes less sense, especially with technology simplifying the teller's job. Check-processing machines and automatic kiosks are eliminating the need for cash drawers and shrinking the time it takes to serve each customer.
"What I think more banks are going to do is hire more part-time people," says Robert Meara, a consultant with Celent who advises large and midsize banks on branching issues.
They'll staff up during lunch and in late afternoons when the branch is busiest, and have only skeleton crews at other times, he says.
If that all sounds simple, it isn't.
The changes involve people and infrastructure. Banks have to decide which locations to remodel and outfit with new technology. Old branches need more private rooms. That's not cheap.
Finding good people is the trickiest part of any business enterprise. Reliable part-timers can be hard to come by, especially when they have to be adept at multiple tasks like processing transactions and fielding service questions. Temporary employees are not favored by banks either; permanent, properly trained workers are considered key.
"Teller staffing is sort of an age-old art and science," says Moore of Accenture. "The problem with part time is you can run into trouble on the service."
Meara says today's job market is flooded with willing workers. But, he adds, "longer-term, it is going to be difficult to find someone that is quite good, particularly people that are good at engaging people and selling stuff."
Bringing more part-timers on board involves rebooting old staffing programs, which takes time. It also means letting go of full-time employees, cutting their hours or waiting for attrition.
This is why there is more talk than action at this point when it comes to making the shift. But Demos says he knows of at least one large bank that is planning to double its part-time staff, to about 30 percent of its head count.
