In retail banking, success is a double-edged sword. A branch can benefit greatly from a strong manager or terrific teller, and it's only natural to reward these star performers with promotions to bigger branches, or roles at the district or regional level. But recognizing top talent this way exacerbates the high rate of turnover in the branches and potentially puts your best customer relationships into limbo.

Here's one solution: keep those valuable staffers right where they are. The trick is to do so without sacrificing their professional growth or earnings potential. And for that, you have to completely rethink the branch banking career path.

No longer, for example, could you tie compensation for branch employees to the size of the branch-that would only encourage movement to bigger and bigger outposts. And pay metrics focused on net customer growth would need to make room for separate measurements of acquisition and retention rates, the latter of which acknowledges the special role that tenured employees can play in keeping customers loyal.

One model for this approach is Union Bank, which made changes like these a few years ago to tackle an attrition problem at its branches, and to play up what it saw as a competitive advantage in the staff that stayed with the bank—their length of service. Pierre Habis, Union's senior executive vice president for community banking, says the changes halved the attrition rate and addressed a key concern of small-business clients especially: they want to see a familiar face when they go to a branch.

What's more, Habis says, the prospect of a career path that does not require frequent relocations can be a quality-of-life perk that helps Union compete for talent with larger banks, where salaries often are higher but so are the chances of having to move around a lot.

At Union, proposed moves between branches are relatively rare, and require executive approval. If a move would result in a significant reduction in commute time for an employee, Habis says he'd probably be inclined to approve it, but even then he'd want to weigh the disruption for the branch that is losing the staffer and take steps to contain the impact.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.