Career Tracks: First Tenn. Says Making Jobs Family-Friendly Has Paid

Employee retention, customer satisfaction, and millions of dollars saved are among the results First Tennessee National Corp. is reaping because of its work-family programs, says Ralph Horn, chairman of the Memphis-based company.

Offering work options such as telecommuting, job sharing, reduced schedules with benefits, and sick-child day care is strengthening First Tennessee's bottom line by making employees more productive and loyal.

"We've become one of the highest-performing financial services companies in the country, and this is an integral part of it," said Mr. Horn.

He has numbers to back up the assertions. The loan operations department at the $13.7 billion-asset banking company, for example, doubled its volume of consumer and commercial transactions to 200,000 since it adopted the "family friendly" culture in 1992. The department also improved its customer service scores substantially, according to company officials. The department made these achievements with no increase in staff and only minimal changes in automation.

The bottom line: annual savings of $3.6 million from loan operations alone. Company officials figure it should take 212 full-time employees to handle the volume increase, but the 90-person staff is able to manage. The company says that's primarily because of its introduction of flexible workplace options for employees, and because management gave more authority to staff.

Among the changes the company made was allowing employees to virtually set their own hours-arriving as early or leaving as early as needed; working from home if needed; and working on weekends unsupervised for overtime pay, said loan operations manager Clay Williams. Employees were also given authority to make procedural changes to the loan servicing process.

"A typical corporate organizational structure takes the people at the lower levels, pigeonholes them and says 'We'll tell you what to do and when to do it,' " said Mr. Williams. "We're treating people like adults, not children."

Instead of monitoring employees' hours and how well they follow established procedures, the company measures their productivity and customer satisfaction scores, said Mr. Williams.

Similar cultural changes have come to many First Tennessee operations, officials said. Indeed, some 91% of the company's employees make use of flexible scheduling, and 98% of managers report increased productivity in their departments.

But the new policies' benefits include more than productivity increases, the company reports. Employee retention has improved 8% since 1992, and retention of "high-risk" employees-new mothers, primarily - has grown to 85%.

Also, the ratio of applicants to new hires has increased dramatically, from 3 to 1 to a current 11 to 1. And First Tennessee officials claim 88% of employees say they are committed to staying with the company.

Customer retention is also up-to 96%, compared with 88% before the company adopted its new attitude, officials said.

"It is a very well-run bank, and the fact that it is family friendly augments that," said J.C. Bradford & Co. analyst Hope Willard. "There is a lot of stuff that is touchy-feely in this world, but obviously good employee relations are a vital part of a well-run company. You can't underestimate the power of positive employee thinking."

Moreover, she said, "The proof is in the pudding. They are consistently over 20% return on equity. That people thing has to be important."

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