Unions are not a threat to the banking sector; they're an opportunity

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With labor organizing on the rise, it's time for banking sector leaders to recognize that worker empowerment is a necessary and long overdue opportunity — one that can help our industry evolve into one that prioritizes people as much as profit. 

Worker empowerment — which may include unionization, though that's far from the only option — represents a critical step toward solving longstanding issues within the banking sector. While many employees thrive in banking, there are plenty of disheartening examples of low pay (the mean pay for bank tellers is around $17 per hour), stressful working conditions, discrimination and high-pressure sales tactics. Just as banks have left entire communities behind in the quest for profit, many have also left their own people behind. 

Empowering workers is not just a moral imperative but a strategic business advantage. Long-term research by Gallup shows that employee engagement correlates with a number of positive business outcomes. Businesses with highly engaged employees have less turnover and absenteeism, as well as higher productivity and profitability, than those with less engaged employees. Evidence also shows that providing higher wages can ultimately increase profits for employers. This is not just about creating a happy workforce; it's about building a more resilient business.

Despite that evidence, unionization is often portrayed as a power struggle between employees and management. Recent efforts at Wells Fargo have caused fears of a sweeping trend of labor organizing in banking. In fact, a recent article right here in American Banker called unions a "threat to the banking industry," noting that organizing efforts at Beneficial State Bank, where I am CEO, "brought this all to the forefront."

But, in my experience, these fears are misplaced. Far from a threat to our business, empowering workers can lead to more collaboration and innovation that benefits all. Whether that's through a union or another mechanism, giving employees a structured way to express their needs and concerns can lead to more informed and effective management decisions. 

That's been our experience at Beneficial State Bank. The Communications Workers of America approached us in 2019 because they wanted to represent employees at a bank that was already committed to worker empowerment. Management agreed from the beginning to remain neutral during the organizing process and voluntarily recognize the union if adopted. We did this because we are committed to ensuring our workers are treated with respect and have a strong voice in our operations. In March 2020, over 100 Beneficial State Bank employees voted to join the union, making history as the first bankers to establish a union agreement in over 40 years. 

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Worker engagement at Beneficial State Bank hasn't stopped there. Our team members also recently voted to create three Employee Resource Groups, or ERGs — the Black ERG, Pride ERG and Culture Council — to foster a more inclusive work environment, establish deeper connections and reduce barriers to innovation across the business. More broadly, the bank's commitment to worker empowerment manifests in multiple ways, including paying a living wage across its footprint.

Beneficial State Bank is living proof that the financial industry can empower its workers while remaining successful. Our experience illustrates that when employees feel valued and heard, the entire organization can thrive. 

I believe that the banking sector has the potential to be a powerful agent of positive change, despite a checkered history of redlining, poor risk management and climate complicity. That change starts at home, by recognizing that our greatest asset is our people, and their empowerment is key to our success. Instead of painting unionization as a barrier to business success, we should consider it an opportunity to rebuild trust, integrity and responsibility within the banking sector. 

For the banking industry as a whole, the worker empowerment trend should prompt self-reflection. It's not just about unionization, but about what we want to prioritize as an industry. Instead of asking ourselves how we can stem the tide of unionization, we should be asking big questions like: How can we redefine what success looks like in the banking sector? How can we move away from short-term gains, and toward long-term sustainability and responsibility to our communities? How can we design our institutions in a way that attracts and supports a diverse workforce? How can we help more people, and help people more? 

To my peers in the banking industry, I urge you to reconsider the role of worker empowerment in your organizations. Let's view this not as a threat but as an invaluable opportunity to build a more equitable, sustainable, and prosperous future for all stakeholders in the banking sector.