Many of your key employees may be looking to move elsewhere.
Why? The strengthening of the economy encourages companies that held back earlier in the decade to hire now, and the weakening of the dollar discourages them from moving jobs overseas.
There already were rumblings a year ago, when Grant Thornton reported that community bank executives in its annual survey said retaining key employees was at the top of their list of problems. The problem has not been solved, according to the succeeding survey, reported last month.
Similarly the first report of the new Financial Services Executive Forum, developed by American Banker and Insight Express, found almost 55% of the respondents saying it was getting harder to hire qualified personnel.
When last year’s survey came out, Grant Thornton LP told me that a big problem is bright staff people who fear that their careers will go nowhere at a community bank.
Many respondents to the surveys said their salaries were not competitive and they got no bonuses, no opportunities to purchase bank stock, and no other incentives for good work. They felt that in some way working for a community bank was like a public service job, and paid accordingly.
Linda Garvelink, Grant Thornton’s national marketing director for financial institutions, told me that a small percentage of CEOs even admit that they do not want staff people to become owners — that even offering phantom stock, without voting rights, has no appeal.
Another difficulty for community banks in hiring and retaining good people is that many bright youngsters who leave their hometowns for an education do not want to come back.
What can you do about it all?
“Pay your people the most you can afford to, not the least you can get by with,” William W. Watson, the chairman of Cross Keys Bank in Louisiana, once advised. “You will be surprised how overpaid people will soon increase their productivity to earn that figure.”
Empowerment — helping employees feel that their ideas and decisions really matter — can also glue a lot of people to their jobs who might otherwise be wooed away by a larger paycheck.
