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7 min read

Workforce Management: Not Just for the Big Boys

031910-1by Bill Cobb

One of the most persistent misconceptions within the community bank and credit union markets is that workforce management (WFM) is only for the bigger financial institutions. Nothing could be further from the truth. The intent of this article is to demonstrate why today’s WFM is not your parents’ WFM.

WFM is a growing discipline in small-to-mid-size institutions that is proving to enhance service and efficiency. It is a fact that the cost of labor remains the single largest operating expense in a financial institution, yet most institutions do not have systems in place to manage their largest non-interest expense.

In the past, WFM solutions were perceived as either too expensive or too complicated for the community bank/credit union segment. The good news is with today’s ease of information sharing and improved implementation techniques, smaller financial institutions are now reporting tremendous WFM success stories. Let’s discuss why.

What is WFM?

Simply put, WFM is a process to right size staff by calculating and then scheduling the right number of employees at the right place at the right time with the right skills. The better systems will also factor in employee preferences and work rules to ensure that employees are only scheduled where and when they want. As with any management decision process, successful WFM begins with reliable information. Today’s WFM software is much more affordable and easier to use. It can pull transaction data from servers at night and prepare regular activity forecasts with a couple of mouse clicks. It can automatically pull employee data from an HR database. Then after inputting known absences, the system automatically schedules all employees with a single mouse click while also scheduling appropriate float staff to cover for the known absences.

The benefits are obvious and sustainable

031910-2Rightsizing staff minimizes long lines on Friday afternoon and the number of employees waiting for customers on Tuesday morning. Remember, WFM is NOT about cutting staff. It is about ensuring that the right number of employees is scheduled where and when they are needed. This usually means scheduling more people some of the time and less at other times. Interestingly, most banks and credit unions will see a reduction in the overall number of paid hours as a result while optimizing the availability of staff during business hours.

But why do some institutions have more sustainable success than others with workforce management tools? Certainly, the software used is important, but our experience points to the implementation process as the key distinguisher.

Historically, WFM has been a closed room process run by support staff that branch managers are convinced have no idea what goes on at their branch. As a result of this narrow perspective, the branch manager has traditionally not been involved in the process. Without a coordinated, organizational effort and the appropriate set of management skills and tools, most managers tend to ignore productivity studies or staffing software. Generally, they have been more concerned about keeping the employees they already have than with the recommendations of a model they didn’t help build. Without a solid plan for implementing staffing changes and without the support of the branch manager, cost savings tend to be short-lived.

031910-3Fortunately, another alternative has evolved. Today’s WFM system enables an institution to sustain and even enhance short-term staffing and service improvements through a participative process that builds managerial skills, improves morale and usually results in significant cost savings and improved service delivery.

Typically, the analytical process has not involved the onsite managers because of the long held belief that they are not objective when it comes to evaluating their own staffing needs. This belief is generally untrue and more a result of the organization’s internal operating culture. The bigger issue has been the traditional conflict of interest among Operations, Branch Management and Human Resources. Historically, Operations’ first priority has been efficiency, Branch Management’s has been service, and Human Resources’ has been reducing turnover.

Since the staffing analysis job has usually been given to Operations, it has often been viewed as a cost reduction exercise. This perception leads to the attitude of many branch managers – who are often already hearing customer/employee complaints about understaffing during busy times – that they must fight to maintain their staff numbers. Managers also believe that any staff lost will be virtually impossible to get back in the future, even if critically needed. They further resist when they realize that such analyses usually don’t take into account the shortages caused by vacations, absences and turnover.

It is therefore not surprising that short-term staffing reductions often creep back in over time, because the managers never bought into the changes in the first place. They simply don’t trust a staffing model, retail director or consultant who has never stepped foot in their branch or department and doesn’t understand why their branch is “different.” Human Resources may also resist any recommendations calling for more part-time workers, because it believes they turn over more often and are harder to recruit than full-timers. While challenging, I have seen many creative HR departments that have successfully found and retained quality part-timers after they learned how to redefine the part-time “profile” they are attempting to hire.

It’s clearly time to move past a model of branch staffing that is simply top-down, dictatorial and often morale defeating. Today, branch managers can have access to the timely transaction and customer flow information that helps them make real-time staffing and scheduling decisions.

New WFM software processes all of the necessary transaction, productivity and schedule data in the background without need for local manager intervention. The manager can focus on output, such as the relationship between staff and service levels. Once branch managers can see where and when their branches are either over- or understaffed, the need for change becomes apparent, promoting a unified interdepartmental decision-making process. Operations and Branch/Department Management no longer need to work in a vacuum fueling distrust of each other’s motives in deciding appropriate staffing levels.

031910-4It is critically important that senior management be involved in the initial design of WFM systems and processes so that all departments can come together and create the trust necessary to overcome branch manager resistance to staff reductions. Manager buy-in is greatly accelerated when they see senior management approving needed additions to staff as quickly as reducing staff when not needed. Once this buy-in occurs, everyone can direct their energy on formulating a plan and implementing it successfully.

During implementation, management can use the flexibility of a WFM system to achieve better management of man-hours and/or staff reduction by attrition, thereby avoiding the negative impact on morale and productivity that layoffs tend to create.

Other than the largest national and regional banks, many financial institutions lag far behind other retailers in recognizing the need for real time staffing and scheduling control. The cost of labor is an organization’s largest non-interest expense, yet most institutions don’t have a way to measure its effectiveness or effect on service levels, nor do they know how to manage it on an ongoing basis. Staffing and scheduling software is a critical first step, but senior management must provide organizational leadership to break down the traditional barriers between Operations, Branch Management and Human Resources to fully realize the potential service and efficiency improvements. Leveraging WFM tools doesn’t just allow for near-term expense reductions that can be maintained over time – it also provides a new tool to make delivery more consistent and a great opportunity to improve the managerial skills of front-line staff. In general, if an institution has more than five branches with more than three to four tellers each, the cost of WFM can be justified and should be considered as part of today’s efficiency improvement efforts.

Bill Cobb is president of Scheduling Systems Group, a Cornerstone Strategic partner that provides affordable WFM for small-to-mid-size institutions with a fast-track implementation process.

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