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Talent Crisis: Banks face rising costs, competition for personnel

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When Mitchell Scott was looking to transition from insurance sales to commercial banking, culture and compensation was top of mind.

After applying at area banks, he was hired at Guaranty Bank in 2015. He started as a personal banker and quickly transitioned to a residential lender.

“The selling points outside the money is the environment and getting to meet management staff and who I was going to be reporting to,” he said. “People were very upbeat, very encouraging.

“We immediately hit it off.”

Scott said he negotiated his salary and bonus structure and felt the benefits were generous.

“I made up my mind pretty quickly,” he said.

Human resources professionals say the competition for talent in the banking industry is intense, causing banks to increase their compensation packages and put an emphasis on culture.

“The price of talent in general is going up,” said Melissa Lloyd, vice president and human resources director at Guaranty Bank. “We’re definitely feeling it in the Springfield area.”

The competition for talent, especially young professionals, is not just felt by the many banks and financial institutions in southwest Missouri, but also among other industries.

Prior to the Great Recession, banks didn’t have to compete much for talent with outside industries, said Sheryl Asher, vice president of human resources at Old Missouri Bank.

“In the past, banks have had an advantage because they offered a higher starting wage with better work hours in a structured professional work environment than competitors for that pool of talent,” she said. “Banks are in more direct competition on a daily basis for all talent and are experiencing the same difficulties in reaching and retaining qualified candidates.”

Financial services wages in Greene County have rose by more than 11 percent between 2013 and 2017, according to data from the Bureau of Labor Statistics.

The latest data released in April by American Bankers Association shows the average compensation for bankers in Missouri is $108,763 compared with $100,882 nationwide.

Salary surveys specific to Springfield banks are not public.

“I’m having more and more requests from our bank clients to help them develop innovative talent structures as well as innovative compensation structures,” said Karen Shannon, director of human resources and business consulting with Ollis/Akers/Arney. “It is so difficult to find the right people and get them on board.”

And the number of days job openings remain unfilled is growing.

“A year ago, the time to fill an entry to mid-level job at OMB was 14-21 days,” Asher said. “Currently the average is 35 days.”

Asher said it’s not necessarily due to a lack of applicants, but rather a lack of qualified applicants.

Considering these stresses of finding talent, Asher said many banking industry employers are making a change for entry-level employees.

“They have expanded training and development programs, allowing them to hire individuals for entry-level jobs who are slightly less qualified than in the past and provide an opportunity that allows the new pool of candidates to be equally successful in their jobs,” she said.

In the meantime, Old Missouri Bank officials are adjusting hourly pay rates to boost professional growth and development. She said the bank has raised entry-level teller salaries, for instance, by 5 percent during the past couple of years. For midlevel or more skilled positions, banks are increasing wages to keep attracting the best talent, she said, with midlevel wages rising 4 percent in recent years.

Guaranty Bank declined to share salary data.

To attract and retain the next generation of talent, Shannon said she’s encouraging bank clients to creatively communicate culture and emphasize development.

“For a lot of millennials, studies have shown hard data around meaningful work and positive work environment and individual value,” Shannon said. “One of the things is actually having the opportunity to learn and grow. Many banks invest a lot in their employees.”

Fifty-one percent of employees are actively looking for a new job or watching for openings, according to last year’s State of the American Workplace study by Gallup.

And the latest Crowe Horwath LLP Financial Institutions Compensation and Benefits Survey found that in 2016, turnover rates nationwide for banking employees were at a 10-year high of 19 percent for nonofficers and 7 percent for officers.

Guaranty Bank felt that pressure last year. Its turnover rate increased by 8.1 percent in 2017 from 2016. Officials say they addressed the problem with an emphasis on culture.

“We have lots of initiatives internally to keep employees engaged. Employees are really encouraged to give feedback,” said Allison Kimes, talent acquisition and management specialist for Guaranty Bank since 2016.

Though it hasn’t reversed the trend, Guaranty Bank’s turnover rate is increasing at a slower pace. It now sits at 1.5 percent higher today than this time last year, Lloyd said, and rehires made up 21 percent of hires this year.

At Old Missouri Bank, Asher said last year for the first time turnover reached double digits at 11 percent.

In part, she said it’s from an increase in hiring college students as part-time employees. Another factor is “attributed to opportunities for the skill set our employees have on the open job market and individuals electing to accept that opportunity,” Asher said.

She noted, too, that most workers look beyond a paycheck or job title.

“All participants in the workforce are looking for a job that is fulfilling to them, not just in wages, but work achievements and opportunity to maintain a life balance with home and family,” she said.

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