It is around this time that many banks are trying to determine the amount of staff and effort that will be required to process all their PPP Forgiveness Applications that are now ready to be filed. Late last Friday, the SBA issued new Final Rules that further outlines what is expected from borrowers and banks that also helps in building this model. To help banks, we put together the below data and model to help answer the question – How many bankers will I need for this effort and for how long.
Tag: Human Resources
When it comes to corporate culture, many banks know that building a genuine and sustainable culture is like baptizing cats. It’s tough work fraught with many scratches and a lot of moving around. However, when it comes to corporate culture, Netflix is in the pantheon and can give banks insight. In 2011, their CEO, Reed Hastings, their Chief Talent Officer, and others produced a “Culture Doc” (below) that spread like wildfire among the Silicon Valley’s elite.
We recently heard of a regulatory team that during a safety and soundness exam played “Management Bingo.” They took senior executive’s business cards, put them in a bowl and picked one. The CEO (if he was not picked) had to quickly tell or show an action plan for the succession of the executive that was chosen. If the CEO were chosen (and they put two cards in if the CEO was also President), then the Board would have to show a plan.
Far and away the most profitable asset for a bank is its people. It stands to reason that optimizing your most important asset is critical to increasing efficiency and becoming a top performing bank.
Before credit, asset-liability positioning, deposit gathering and customer engagement, there is one process that is more important that bankers must get right to be successful - and that is hiring. Get this process wrong and your bank will be an underperformer. Make some good hires and you will likely excel in key parts of your organization. Make hiring a discipline of the bank, and you will dramatically tilt the odds in your favor. There is no single function more important to a bank. None.
Let’s be honest. Your bank employee handbook is probably a snooze-fest. If you are like most banks, your employee handbook was likely cobbled together from a template given to you by a third-party human resources firm or a revision of another bank’s handbook. Chances are your handbook is about as inspiring as refrigerator instructions.
If you want to change the face of your bank, one of the fastest ways to do it is by changing the compensation structure.
Falling energy prices have been front and center in the headlines lately, which is a good thing for retail-oriented banks. Experienced retail bankers understand that consumers often react to lower energy prices by treating it as a windfall and increasing their savings rate. Statistically, the correlation over the last 5 years is that energy prices explain approximately 68% of the savings rate – a correlation that is exceedingly predictive. The question is, what is your bank doing to take advantage of this trend?
Larger banks are paying their lending staff higher compensation than smaller competitors are paying their teams. The difference in the same market, similar seniority and position can be as much as 100% when factoring salary, bonus, profit sharing and stock incentives. It can be difficult for a community bank to attract the lending talent it needs, but we point out that many community banks are succeeding by investing in their culture and building an environment that goes beyond traditional compensation.
Once upon a time there was a bank that was close to failure. It used to be a great bank with branches filled with vibrant customers and earnings as thick as Kansas soil. However, over time customers moved on and the staff started to feel that they had little to offer compared to the largest of banks. This was a bank that was dying a slow death.