The Banking sector in general is known for investing a lot of time and money in customer satisfaction reporting. In fact, according to one study conducted by the American Customer Satisfaction Index, the average U.S. banking customer satisfaction ranking for 2016 is 83 percent (American Customer Satisfaction Index, 2016). With that said, according to the previous section highlighting the lack of employee satisfaction in the sector, there seems to also be a lack of focus on employees, which must be addressed, as it is now well established that employee engagement is linked to increased levels of profitability across the board.
Every year in the U.S. the average organization spends almost 720 million dollars on employee engagement but still the result of overall engagement turns out to be severely low at around 13 percent, as per Gallup (LaMotte, 2015). As the U.S. Banking sector is specifically one of the most stressful industries, with a high annual turnover rate of 15 percent and racks up a cost around one billion dollars due to the difficulty retaining employees (“Banks Face Talent Crisis Amid Costs of Employee Turnover Report”, 2017), it is important to give the needed attention and tools to banks in order to reduce the attrition rate.
The tools needed for U.S. Banking companies to reduce such high turnover and increase employee engagement boil down to data tracking techniques and various activities that HR management has the ability to control. With that said, the main tool would be correctly tracking key performance indicators that are associated with employee engagement.
Firstly, effective communication between all business departments plays an important factor in employee engagement, especially banking companies that having presence in different cities in US because in this case communication is a difficult task. While some organizations are still not giving much attention toward this dilemma, many started realizing the importance. For example, some U.S. companies recently (past 10 years) started using employee engagement application such as Slack or Trello to manage tasks and projects, in addition to regular e-mails, as people tend to spend more time on mobile as compared to computers. As per the survey result, companies who use mixed forms of communication, specifically additional technologies have 17% higher productivity, 21% higher profitability and 20% higher sales (Corbin, 2017).
Perhaps the most effective route for increasing employee engagement is providing incentives, which can be a variety of elements such as: remuneration, growth opportunities, personal development, workplace recreation etc. Out of these, employee recreation has the least influence on employee engagement, while remuneration has a maximum impact based on prior studies.(Mokaya & Kipyegon, 2014) With that said, it is important to provide employee trainings and necessary resources to make their work hassle free. Providing extra perks and incentives upon a job well-done help build a healthy corporate culture and increase engagement and reduce turnover while increasing performance.
The vague idea of engagement is a feeling and you cannot measure it, but when it is defined, as outlined earlier in the employee engagement definition section, the idea of using survey questions (i.e. absenteeism, turnover, job satisfaction, etc.) seems to be somewhat of a solution. With the help of proxy questions, we can find out the extent, typically on a Likert scale, to which employees are engaged. Using SPSS correlation, we can further find out important information concerning job satisfaction, for example, seeing the general correlation between various banking departments and their satisfaction with the banking director or management teams.
To further define how to measure employee engagement, we must first look at the various key performance indicators of said engagement of which a handful are outlined below.
1) Suggestion Box:
As per the survey result from Career Builder 48 percent of employees said asking for feedback by employer would reduce the turnover rate. As they feel more connected to the organization(Grasz, 2013). This shows interest in opinion of employees, which brings motivation, resulting in more job satisfaction and increased productivity. It is also important to keep respondent names anonymous during public announcements so that they feel more secure and honest in giving feedback without fear for criticizing practices which affect them. With that said, taking feedback and not applying the concern raised by employees creates a disgruntled environment and reduces the number of feedback for the upcoming years. Idea of suggestion box can backfire and reduce the employee engagement if management if employee sees there is no acknowledgment for the suggestion they have provided (Crebar, 2016).
In order for the Banking Industry to increase employee engagement levels, some sort of innovative method may be required. Such an example would be when an organization allows employees to brainstorm more efficient processes or solutions for existing problems. This is similar to the suggestion box, but can also be implemented as a unique feature itself via an HR managed e-mail ‘project improvement’ email.
2) Engagement Surveys:
As alluded to earlier, perhaps one of the best wats to understand employee engagement in an organization is by finding the result using employee engagement surveys. Specifically, the millennial workforce i.e. 92 Million highest in US history (“Millennials Infographic,” n.d.) wants continuous feedback and information. The more frequent the survey, the higher engagement potential the organization possesses. According to research, the best time for doing this survey after the on-boarding process to ensure training meets expectations (Heathfield, 2017)
With the help of survey results, the HR team obtains inside information of employees, that is: how they feel about their projects, how satisfied they are their work life balance, employees career objective etc. In this manner, organizations can receive valuable information concerning employee engagement from open and close ended questions asked in surveys. The better the score, the better the company is investing in employee engagement and thus increased profitability (Smedley, 2016).
As a side note, is important to educate employees, letting them know the importance of these surveys since still most are not openly willing to provide results, or perhaps do not have the time to complete. With this said, HR could create mandatory surveys, without the option of failed completion.
3) Customer Satisfaction Results:
Organizations can also use the customer satisfaction results as a loose guideline for checking employee engagement. As alluded to earlier in the report, the U.S. Banking Industry has a somewhat high (82 percent) customer satisfaction rating, but fails to have a high employee satisfaction rating. With that said, there is still much room for improvement among the customer satisfaction rating. In general, higher results could mean employees are putting forward their best efforts to make customers happy. This shows employees must have some level of engagement, as they are able to work with the organization and align objectives to make company successful. As per Harvard report employee engagement relate to customer satisfaction with the correlation coefficient of .85 (Sheridan, 2016).
4) Absenteeism and Turnover Rate:
Absenteeism and turnover rates are also key performance indicators for finding employee engagement and many systems like workday, namely etc. providing this information. High turnover rate affects organization dramatically. As per a survey carried out by The Bureau of National Affairs, employee turnover alone costs 10 billion dollars to USA. (Galkis, 2016). The number of total separation was 5.5 million in November 2017 as per report of Bureau of Labor statistics.(“Job Openings and Labor Turnover Survey News Release,” 2018). With that said, it is no secret that engaged employees show up and put in the effort. This data will help HR management understand which department has highest turnover or absenteeism rate and if it is because of poor management or other identified reasons. It is important to gather this information and check with employees of those department to know the reason which will help increase overall employee engagement.
Perhaps the best way for HR to improve this is to follow the pattern and understand what motivates employees and find out the reasons for the increased or decreased rates during their tenure by arranging regular meetings with them. It is also equally important to find the correlation between presentism and amount of work. It may be possible that an employee is coming to the office but doesn’t have motivation to complete given tasks, which reduces efficiency and acts as a barrier in reaching various business objectives. According to a rsurvey conducted in 2017, the employee turnover rate in US banking sector was highest i.e. 25 percent (Survey 2017, 2017). One of the main reasons for turnover was low compensation, less growth and poor relationship with managers. It is HR ‘s role to look into this matter and resolve such issues in order to increase the retention (Fouad & Singh, 2011).
5) Net Promoter Score
This tool was initially introduced to audit customer satisfaction but was later modified to find the employee satisfaction score. Organizations ask a simple question “how likely you would recommend your friend at our company” based on the scale of 1 to 10 where 0-6 considered as detractor, 7-8 passive and 9-10 as promoter. Using formula NPS= (promoter-detractor)/total respondents we find the result. A positive NPS score indicate employees are satisfied while in case of negative score we can ask extra question to employees that how company can increase this score in future.(Crebar, 2016). It is quite possible that even if the company has a fortune 500 label, if the NPS score is negative, the company is likely not concerned for employee’s satisfaction. For instance, the Walmart NPS score is -4 while Apple is 47 which means employee engagement in Apple is exponentially higher as compared to Walmart.(“Fortune 500 Net Promoter Score benchmarks | Customer.guru,” n.d.). In US Banking sector, USAA score the highest NPS score i.e. 75 (Smith, 2013) while Westpack scored lowest score of -1 5 (Benchmarks, 2018). HR can use this score to conduct future planning in a way that promotes employee satisfaction, thus an element of engagement, targeting a highe NPS score in upcoming years.