Training is important but expensive. Should your bank invest money in training your employees, or does it make more sense to let other institutions do it for you so you can “pick off” their experienced people? Those of you who have been in banking for decades know that this topic is always a popular one inside the walls of your banks as well as at industry forums and roundtable discussions. And now with the problem of retiring baby boomers and a projected lack of qualified people to fill those retirees’ positions, the training question becomes even more acute.
In this article I’ll tackle a few of the key objections to investing in training and I’ll remind you of the primary benefits, both to your bank and to your employees.
First, let’s get some historical context. Decades ago, most banks had some kind of formalized training program for their new hires. Understanding that most newcomers, even recent college graduates, don’t have a firm grasp on how banking works, it only made sense to provide their hires with some help getting started in a new industry. Whether on the retail or the commercial side, there’s a lot to know, especially when working in a highly regulated industry. Ask any banker with a few gray hairs how they got started in banking, and many will tell you about the training program that they grew up in and how beneficial it was to their career.
But over the past few decades, as the industry has become even more competitive, many institutions decided that these programs were just too expensive, so they’ve gone the way of the dinosaur. In the short term this decision has saved banks some money, but many argue that it has weakened the industry by creating a workforce that simply isn’t capable of doing the complex work required to remain competitive in the long run. I talk to hundreds of banks every year and I regularly hear senior bankers lamenting the lack of training available to their junior associates, yet they don’t have time or resources to solve the problem.
One of the common objections to investing in training new bankers is that we’re only training them for the benefit of our competitors. That is, if our bank spends the time and money to provide them the knowledge and skills they need to be extraordinary performers, then the bank across the street will be happy to lure them away later with the offer of a 10% pay increase and a new title.
After all, we’ve all heard how the millennial generation values new work experiences over tenure and company loyalty. So, the argument goes, why bother making a long-term investment in them if there won’t be a return on the investment?
It has been said that companies should train their employees so well that they will be able to flee to the competition, but also treat them so well that they won’t want to leave. I don’t think anyone would argue that it’s better to have under-trained employees who aren’t prepared to advance and eventually move into leadership roles. Every bank wants its best people to stick around for the long haul, and it turns out that providing thorough training is a powerful retention tool.
Attrition is costly, and while there will always be valid reasons why employees leave a bank, it’s a lot cheaper to build loyalty through offering quality training than to pay the price to recruit, hire, and on-board another brand new person who needs to start the process all over again. Another less understood facet of the discussion is that a solid training regimen is actually a potent recruiting tool. When deciding between multiple job offers, college seniors often gravitate to the bank that offers the most thorough and specified training and development path. The March, 2016 issue of the RMA Journal cited Deloitte’s recent “Talent in Banking Survey” when it stated that the top aspiration of banking-inclined students was “professional training and development.”
Many times in my own experience, I’ve stood face-to-face with Finance majors at college career fairs and have been asked about the details of my bank’s training program. In many instances I could virtually close the deal by describing not only our program, but also the high percentage of retention and promotion among the participants in that program.
College graduates aren’t just looking for a salary – they want to know that your bank can provide then with a solid head start on a predictable career path that will take them where they want to go.
Are you concerned about the “talent gap” at your bank, and wondering who will step into senior leadership roles as your current team begins to retire? Build bench strength organically by investing in the good people you’ve hired, and create a work environment where they’ll never want to leave because they’ve got it so good.
