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Run a better bank: 4 Key steps to build a staffing model

Sageworks
October 29, 2012
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This guest post by John Owens and David Harrop, founders of BCI Financial Services Consulting, summarizes their presentation on how to improve productivity and efficiency through benchmarking and staffing models. Run a Better Bank: Using Productivity & Efficiency Metrics to Improve Profitability was presented as part of Sageworks’ webinar series.

Using productivity & efficiency metrics to improve profitability

By John Owens & David Harrop

As shareholders and regulators continue to focus on earnings and earnings improvement, many financial institutions do not have formal staffing metrics or productivity goals in place for their employees. Using benchmarking to determine staffing needs in all levels of the organization is a great way to address these issues and increase responsibility among employees for results. Looking at each branch and role category individually, a successful staffing model can be developed using four key steps:

Analyze the transaction mix of the role to determine what key metrics should be measured, as well as the production standard. It is important to agree on the amount of time it takes to perform each transaction. For example, in the case of tellers, this should include service, greeting and conversation in addition to the time it takes to perform the actual transaction itself.

Gather staffing and volume information for each branch or department, including the monthly average number of transactions and the current full time equivalent (FTE) staffing level.

Establish production ranges for various staffing levels (based on incremental FTE intervals) and convert the information into a usable staffing model.

Determine the minimum required staffing. This should include staffing requirements based on key activity volumes and minimum staffing requirements based on hours of operation, bank preferences on minimum staffing standards and security.

The model that has been created can help determine staffing needs by indicating the staffing level required and showing any recommended changes based on current staffing. The key to the success of the model lies with the knowledge of the supervisors and managers to understand the situation of each branch or department. Three key criteria for maintaining staffing models are:

The model must be simple to use and maintain in order to be most effective.

The key metrics chosen must be representative of the total work performed and good predictors of actual staffing needs.

Key activity volumes must be easily available to measure and analyze.

Properly using a staffing model can result in increased productivity, efficiency and accountability throughout your institution.

John Owens, President, and David Harrop, Chief Operating Officer, are co-founders of BCI LLC, a financial services consulting firm that helps clients resolve and manage complex business issues, streamline business practices, mitigate risk, and enhance their performance. Owens is based in Pawleys Island, S.C., while Harrop is based in Bella Vista, AR.

Sageworks hosts monthly webinars. These free, educational webinars are led by consultants and leaders in the banking industry who share best practices for financial institutions. Webinar topics include issues that are getting the most focus in banking today and advice to help institutions. Access archived webinar recordings and sign up for future webinars here.

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Sageworks

Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest

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