Time to Reconfigure Branch Staffing?

CUNA’s E-Scan online research portal
April 25, 2011 | COMMENTS

Industry improvements over the past few years in branch technology, interior design, and sales training indicate that it might be time to adjust your branch staffing. As job functions within the financial services industry diverge from traditional branch roles, Bancology (bancography.com/bancology) suggests that institutions update their branch staffing approach.

Service quality and convenience are the primary reasons for choosing a financial institution, according to Bancography’s market research. Deploying the right staff in the right place at the right time will always remain a key factor in keeping service quality at acceptable levels.

Reset benchmarks

Most institutions adopted retail staffing benchmarks 20 or more years ago, and many have never updated or challenged those benchmarks. In measuring output for a full-time equivalent (FTE) teller position, for example, 15 transactions per teller per hour might have been appropriate in 1991, but today’s current industry benchmark is considerably higher due to changes in processing systems and equipment. Today, teller productivity typically ranges between 18 and 25 transactions per hour per FTE. Periodically comparing your credit union’s productivity standards with industry norms or best practices is the first step toward adjusting your internal models.

Be sure to consider new technologies that have been implemented in the branches, such as teller cash recyclers or teller cash dispensers. These two teller-efficiency technologies should reduce the required teller FTEs.

If an institution has not adjusted teller staffing, it renders the capital expenditure on new technologies pointless from a cost-control standpoint, even if still beneficial from a speed-of-service perspective. Consult with your technology vendors for guidance as to the standard FTE reductions experienced by peer institutions.

Incorporate universal agents

The universal agent is a cross-trained employee capable of performing both teller and customer service representative (CSR) tasks. This multi-functional employee can reduce total staffing needs by filling either branch role in markets where an additional full-time employee isn’t warranted. Several items including interior branch design, technology, and training contribute to the successful incorporation of universal agents.

Determining where universal agents will be most effective is the first step toward integrating this hybrid employee. Universal agents are most successful in branches featuring one or more of the following characteristics:

• Recently opened;
• Open floor plans;
• Low transaction volumes; or
• Affluent, technology-savvy, or well-educated household bases.

The presence of these features dictates where the institution should first introduce universal agents.

Modeling or determining the required number of universal agent FTEs requires a hybrid sales-and-service calculation that combines the overall demands of the day.

Traditional methods calculate teller and sales FTEs separately, but for universal agents the two must be combined. Divide total transaction volume by the teller standard to yield teller FTEs; divide total new-account volume by the CSR standard to yield platform FTEs; and combine the two to reveal the required universal agent complement.

And be sure to reevaluate minimum staff levels in the universal agent model, advises Bancology. For example, even though security and coverage issues may have mandated a minimum of 2.5 tellers and one CSR in a traditional environment branch, in a universal agent model the same branch may require a minimum of only three rather than 3.5 FTEs to meet those security and coverage imperatives.

In addition to the goal of delivering better service, every investment in technology, design, or process improvement is ultimately aimed at reducing costs or increasing revenues. Branch redesign does this by speeding transaction time, mitigating security risks, or creating more time or a better environment for sales. If an institution undertakes such investments and does not update its staffing model accordingly, it likely will fail to realize the very benefits the investments were initially intended to deliver.