At Old National Bancorp in Evansville, Ind., making sure employees are happy is another important risk management tool.
The $14.4 billion-asset company lavishes its more than 2,900 employees with top-notch benefits such as flexible work schedules, paid time off to participate in wellness activities and financial help for employees facing an emergency.
Chairman and Chief Executive Bob Jones sees these perks as necessary for running a sound financial institution. For him, it's a matter of giving employees the right tools to do their jobs.
"We have a fundamental belief that our single most important asset is our people," Jones said in a recent interview. "If you think about the industry, and assets and liabilities, it's all about maintaining risk. For us that means developing a culture where we're so focused on making sure they have all the right tools to do their jobs."
The following is an edited transcript of that conversation.
The industry is under pressure and many banks are cutting costs. Do you get pushback from shareholders about the benefits you provide?
BOB JONES: Early on, we did get some pushback, but I think over time as our shareholders began to understand our long-term strategy — going back to the tenet that people are our most important asset — and as we continue to grow as a company … you need to have great people to do that. In the last three to five years, I've had little to no pushback from our shareholders. You need to continually communicate to your shareholders what your long-term vision is, what your strategy is and the importance of our folks in implementing that strategy.
What kind of questions did you receive?
Most of the pushback generally comes from retail shareholders. Institutional folks tend to agree with the long-term vision, not that they are always happy. But it was more of the retail folks and they may ask, "Why are you sponsoring this?" or "Why are you doing this?" Over time, we have proven that our board has developed a good long-term strategy.
Have you ever felt internal criticism, especially during the crisis?
Our board has locked arms and understood that long-term view. You go back to the crisis and it was really all about communication. We had constant communication, with our associates, with our board, with the external affairs part.
What concrete benefits does Old National get from providing these services to employees?
It reduces turnover and allows you to attract and retain high-quality individuals. In a lot of our markets, we have some of the best of the best calling and saying, "We want to join your team." I can't tell you the number of times I've gotten a call from a customer or a prospect saying they saw an associate doing [something positive] or heard about a One Wish grant and say, "You're the type of company we want to do business with."
One of our best clients in Bloomington, Ind., is a result of what they've seen as part of our culture. This client sees us in the community, and we do some joint sponsorships with this client. They have met our people. They have gotten to understand our culture. We went from a zero relationship four years ago to their being one of our largest, most profitable clients.
Your voluntary turnover rate seems a bit higher than the industry average. What are you doing to lower that?
Part of our challenge has been that, in the last year or two, we have done a lot of acquisitions, which we call partnerships. You get turnover — both voluntary and involuntary — as you bring new folks in on the team. As hard as you try to bring them on, sometimes they just don't want to be a part of you, or we just don't have a position for them. Clearly as we get into markets where we have been more established our turnover is far less.
How do you maintain your culture as you integrate banks and bring on new employees?
It really begins with looking at culture. You're really gauging that culture, even when you're doing due diligence. If we're not comfortable that there's at least a pretty comparable culture, then we will probably walk away from a potential partner. There's a subtly in the words we use. When we talk about what is historically called acquisitions, we believe fundamentally that you can't acquire people. You can only partner with people. You treat people right from day one and you're open and honest with them from the first interaction. When you do need to make tough decisions, you treat people fairly. Some of our biggest advocates are those who unfortunately didn't get a position but they remember how well we treated them.
How do you communicate with employees about the potential for job losses after a merger?
From day one we will be honest with folks and say there are some of you in this room that will not have a position, but my commitment is that we're going to treat you very fairly and do all we can to help you find positions. We do job fairs, we do interviewing skills, we help them develop their resumes. We reach out to other employers and say, "We've got great people."
How do you keep the benefits you offer up to date with the latest trends?
We push our folks in [human resources] a lot to make sure we're always looking at every opportunity. I'm blessed to have a phenomenal HR team that understands that people are our most important asset. They are thinkers and strategic partners. We call it associate engagement, not HR, but [the executive in charge] sits in board meetings and is a very senior member of our management team and has a seat at the table.
What advice would you give to other banks about benefits?
Steal as many good ideas as you can. I go back to the basic tenet that you need to make sure people are always viewed as your most important asset. Don't take them for granted. We use the analogy that when you're dating someone you do those nice things in the beginning but sometimes when you're married for a long time you forget to do them. But as you're thinking about your associates, you have to remember the little things make a big difference, like picking up a phone and telling someone, "Thank you."