Though a slow economy proved burdensome for banks, an improving one presents its own challenges — particularly in recruiting and retaining staff.
"There's a battle for talent," said Timothy Reimink, a managing director in the financial services sector at Crowe Horwath.
Reimink has insight into personnel practices in the industry through Crowe Horwath's annual survey of bank compensation and benefits. The firm has been doing the survey for 36 years, and released the latest results in September, with data compiled from 375 banks, most of them with less than $5 billion in assets.
The survey shows salaries have been rising for several years across most types of bank jobs. Everyone from tellers to top retail banking officers has been getting raises.
Reimink expects pay to trend even higher, particularly since the majority of banks are looking to add employees in the year ahead.
He said banks might have to get more creative with how they go about attracting new hires, as the competition for people gets fiercer across many industries.
For the first time since the Great Recession, more than half of banks surveyed plan to increase overall staffing during the coming year — 42% through organic growth in their existing business and 13% through expansion. The number of banks that plan to maintain current staffing levels held relatively steady at 35%, which is near the lowest level in years.
Among the challenges is getting younger people to consider a job in banking — "which doesn't seem particularly sexy and doesn't necessarily seem like it's helping solve world peace," Reimink said.
One inventive way some banks are finding candidates is to recruit from other industries that have strong training programs.
The thought process about what makes someone right for a certain job is evolving — with a focus on the skills needed rather than on directly relevant experience. "They no longer think about it in terms of, 'Well, I need to hire somebody who works at a bank,' " Reimink said.
He cited Enterprise Rent-A-Car as an example. The company likes hiring young people, training them in the Enterprise way, then promoting the best of them.
"There are certain people skills, certain sales skills, certain management skills that they develop," Reimink said. "And I know of some banks that have taken note — alumni of Enterprise Rent-A-Car have skills they would like to have in branch managers."
Even as banks are looking to add staff, employee turnover rates have reached record levels, exacerbating the hiring needs.
Turnover is at 7% for officers and 19% for nonofficers, the survey found. It's the third consecutive year that banks reported an increase.
So banks are working harder on retention too, not only granting salary increases, but offering flexible work arrangements, improving paid-time-off programs and employee perks, and even changing how employees are evaluated.
About 20% of banks say that they're pursuing an above-market compensation strategy — a figure that has been trending up gradually from about 9% during the recession, according to Reimink.
Over the past 10 years, the number of banks with employee casual days has increased more than 18%. The number offering wellness programs is up about 8%, health club memberships more than 6%, and employee assistance programs — an employer-sponsored service designed to address personal or family problems — 6%.
"I wouldn't call it a dramatic shift or a sudden shift," Reimink said, "but you can see that banks have progressively loosened up their practices around dress, around hours, around flexibility."
In what might be a shift to accommodate millennials — who tend to like frequent feedback on job performance — the annual review is becoming less common.
"One of the things we see banks doing is focusing on their performance-review process and making it more meaningful to the employees, as well as to the bank achieving its objectives," Reimink said. "Moving to less about the annual review and more frequent, continual review — and it's really not so much review, it's just conversations between the employee and their supervisor."
But Reimink highlighted at least one worrisome data point from the survey. The chief human resources officer is one of the few positions to see a decline in average pay in the past year — which he said is surprising and concerning given the heightened need to attract talent and reduce turnover.
In his view, it suggests some banks have yet to recognize the challenges posed by the tightening labor market.