Report: Analyzing Employee Turnover in Banking Sector (2024)

This report investigates the critical issue of employee turnover within the banking sector, examining its financial implications and underlying causes. The analysis, based on qualitative research, explores the significant costs associated with staff turnover, including recruitment, training, and reduced productivity. The report highlights the importance of understanding these costs to identify effective mitigation strategies. It presents findings from studies that emphasize the negative impact of turnover on bank efficiency and the need for improved management practices. The research delves into the factors contributing to employee turnover, such as inadequate management skills and lack of employee engagement, and suggests strategies like improved recruitment processes, enhanced leadership training, and a focus on work-life balance to improve staff retention. The report also examines the use of qualitative methods like naturalistic observation and questionnaires to gather data, and addresses ethical considerations related to the research process. Furthermore, the report discusses the application of job characteristics theory in understanding employee morale and productivity, and proposes strategies for social change through stakeholder collaboration to create a more sustainable and employee-friendly banking environment.

In response to Research Question 1.
With employee turnover in the banking sector at a 10-year high, banks need to acknowledge
the real costs of turnover, identify the basic leads, and set goals to mitigate the effects.
Regardless of how innovative banking infrastructure will evolve in the near future, engaged
and skilled workers will tend to play a crucial part in the future of any banking enterprise.
Studies suggest that there has been a substantial increase in pressure for successful, strong-
performing jobs over the past decade, with no end in sight real soon.
Turnover rate is one of the most common and universally regarded human resource
indicators, but when measured in combination with the expense of transition, it takes on even
more importance. Although understanding how many individuals leave the company and
which places are essential, understanding what those demarcations cost the company is often
more essential (Mohr, Young & Burgess Jr, 2011).
A staff's total redundancy cost is often calculated to be the amount of sales per worker for at
minimum half year. Crowe's survey of 2016 provides a better comprehensive view.
Instead of calculating the total mean net income per full-time equivalent (FTE) worker, which
was estimated to be over $35,000, is assessed on the basis of half year of sales per worker.
Using this more oriented method, for each worker leaving, the mean price of staff turnover
would be around $19,000 in net earnings missed.
Another common thumb law brings turnover costs at about 140% of the total salary of that
specific staff and even bigger (180-230%) for management and sales roles. William G. Bliss,
publisher of one of the most commonly quoted papers on the subject of turnover expenses,
cites this measure.

The report by Bliss provides a detailed overview of things that banks should include when
estimating turnover costs. His method provides methods in six groups for calculating
different costs:
1. Expenses due to a staff quitting, namely involuntary substitutions; mileage reimbursement
for fill-in personnel; departure conversations; some severance pay; and the charges of
maintaining employee compensation.
2. Charges of recruiting include ads, employers, pre-employment and screening tests and
other associated expenses.
3. Charges of practice, such as relative cost of alignment; handbooks; instructors; and the
time spent by managers and colleagues to get the new worker up to speed.
4. Reduced loss of production, namely calculating the reduced output within the first
few weeks of a substitute worker.
5. New worker expenses, from overheads of embarking the new worker such as contributing
to the salary; creating the identity cards required; and installing computer profiles and
credentials.
6. Loss of operating expenses either focused on the estimated direct sales profit per place, or
operating margin per worker.
Of course, these projected costs may vary based on the bank's role and corporate structure
and overall business plan. Nonetheless, the guide does help to provide some insight on how
not always immediately apparent is the consequences of staff turnover. The Society for

Human Resource Management (SHRM) Organization's extra latest study provides additional
perspective that is particular to the banking sector.
Lately, the basis financed a study on the effects of staff turnover on bank branches' financial
performance. The research was conducted in many branches within a major U.S.-based
community bank.
As you might predict, the results show that the turnover of employees and managers has an
actual negative impact on division efficiency.
But the lingering effects of turnover are more important.
Regardless of how it is calculated, there is obviously a significant cost of employee turnover
— which implies a significant cost-saving opportunity to reduce turnover.
In some cases, administrators and human resources are so keen to fill a vacant position for
difficult-to-fill jobs requiring advanced skills and knowledge that they make a bid to the first
nominee who meets the necessary skills (Pohler & Schmidt, 2015).
Such a knee jerk reaction can lead to a inappropriate outcome with an below par or above par
person. In addition, although an applicant has the requisite professional qualifications and
experience, leadership must also evaluate how well the prospective employee can fit with the
environment of the company.
The most effective strategies for reducing turnover will begin to become more apparent once
the most relevant contributing factors have been identified.
For example, better recruiting and screening processes for applicants will help management
prevent a rush to assess or employ out of desperation. Increasing leadership and

administrative skills can also help to reduce turnover caused by poor interactions between
boss and employee.
Other key aspects of an employee satisfaction approach include a high pay framework and
opportunities, ideally as aspect of a total bonuses plan that includes pay, inducements and
advantages, as well as a focus on more important issues of social and job-life balance.
Like doing it and relative goals for such approaches will become more evident as leadership
focuses on turnover — but that's not to say they'll be easy to implement.
It will take time, energy and lengthy-term commitment to develop and test innovative
solutions. However, as the competitiveness for the top performers persists to deepen, it will
become even more important to establish logically coherent maintenance strategies for
employees to improve bank performance.
a. Why I chose this qualitative method- Non experimental qualitative method of naturalistic
observation was used to get the non manipulated result and to find the exact problem at its
root. The reason for choosing this method was to observe all the outcomes in its natural
setting where it is set to occur without any hindrance from outside factors which can alter the
outcome.
b. The potential population and sample- Although the banking sector is spread all over the
world, data I could collect for sample was from banks of Colorado, USA.
c. The collection and analysis strategy I will use- The method used here is qualitative data
analysis. This is done to get descriptive information and to shed light on the information and
its interpretation.
d. The relationship and trustworthiness of my selected design- The method is useful instead
of quantitative analysis as it seeks out information directly from the sources and tries to find

out the actual grievances. Numbers can be manipulative but interpretation of the information
received from the sample provides better results.
e. Ethical issues and how it can be accounted for- One ethical issue I can think of is
intentional lies or unintentional misinformation provided by the people in the sample. Since
the sample size is large, this can be accounted for as part of lies and misinformation will be
diluted.

In response to research question 2.
Some bank managers do not have the necessary skills to hold staffs, which raises the turnover
of workers and reduces their competitive edge. The aim of this descriptive test case was to
examine bank managers' techniques to reduce their agency's staff turnover. To verify the
credibility and analysis of the details, computational mapping was necessary.
Three concepts extracted from term and expression coding assessment: (a) executive pay, (b)
good discussions, and (c) social development incentives. Cultural alteration involves the
ability for administrators to boost worker engagement and career progression by adopting
initiatives to maintain workers and decrease their agency's staff turnover, resulting in better
customer service.
Satisfaction of the workers is essential to the competitive edge. If workers are supported in
their careers, there’s a high chance of better results and they won’t quit company (Scheers &
Botha, 2014). Management involvement to increase the love for work will boost general
efficiency and decrease the turnover of workers (Springer, 2011).
A committed workforce is required by successful business leaders (Lavanya & Kalliath,
2015). Bank managers work in the in non-metropolitan areas (FDIC, 2012). Knowing staff
needs can help control job security and eventually boost the agency's objectives.
Most banking industry policymakers do not retain trained staff to maintain a competitive
advantage (Oladapo, 2014). International business holders, including those in the banking
sector, lose $200B globally from decreased staff turnover efficiency in the sector (George &
Zakkariya, 2015). The general corporate concern in this analysis was that banking
sector employee turnover is expensive to corporate leaders, leading to a loss of productivity.
The particular business concern was the lack of plans for some bank executives to minimize
staff turnover.

The aim of this descriptive individual situation was to investigate the approaches used
by bank managers to minimize staff turnover. A bank with a four-management team in
Central Florida is the research population. The input to societal change can lead from
widening banks' durability, increasing job stability for staff, increasing groups; financial
education, and growing group economic welfare. For this analysis, the concept of job traits
was suitable because it provides a summary of the connection between job satisfaction and
job feedback types.
Hackman and Oldham (1976) developed Herzberg's motivation-hygiene work-characteristic
concept (Hackman & Oldham, 1976). Ability diversity, role identification, work importance,
flexibility, and work-based input were the principles of job attributes theory (Oldham &
Hackman, 2010).
Variety of abilities requires an individual's variety of possible abilities and talents to do the
work. Job identification means a person understands how to accomplish a particular job with
clarity from start to finish. Task meaning means a person knows that at a certain stage the job
will affect the lives of others. Autonomy is the degree of flexibility where the worker is
required to obtain the work performance and have the autonomy to make choices to handle
the job. Work-based input on the worker's job and success is getting constructive feedback.
Workers who find their role rewarding conduct their duties in a better quality as long as they
are sure in their abilities and have the chance to mature (Oldham & Hackman, 2010). The job
trait concept is applicable to this analysis as it explains the worker morale and productivity
attributes that may minimize turnover rates. When a worker has the expertise for their role,
the flexibility to work freely, and knows that their job is important, the worker is less likely to
quit, leading to lower turnover of workers.

The detrimental effect of staff turnover will cost companies almost twice as much as the
salaries of workers (Duda & Žůrková, 2013). Supervisors who recognize how to
decrease turnover can have a positive impact on their agency's development. Employee
turnover underlined by Eriksen (2013) is a costly burden and company managers should try
to avoid it.
Based on the skills and expertise of the worker, the cost of replacing the worker is significant.
Reducing employee turnover can therefore result in happy workers delivering great customer
service, improving the community by providing financial services, and supporting small
businesses. Through growing financial growth, maintaining valuable employees, and
improving the efficiency and productivity of employees, designing and implementing
strategies to minimize employee turnover could be beneficial for the company. Saha (2014)
claimed social change happens when small businesses, community activists, representatives
and shareholders establish mutual agreement and make the best community choices. Social
change opportunities are increasing as institutional leaders enact local practices that combine
issues and views from stakeholders (Virgil, 2014). The consequences for societal change may
result in the willingness of the manager to minimize the retention of workers at banks,
resulting in a self sufficient society.
a. Why I chose this qualitative method- Non experimental qualitative method of naturalistic
observation was used to get the non manipulated result and to find the exact problem at its
root. Questionnaires are prepared accordingly. The reason for choosing this method was to
observe all the outcomes in its natural setting where it is set to occur without any hindrance
from outside factors which can alter the outcome.
b. The potential population and sample- Although the banking sector is spread all over the
world, data I could collect for sample was from banks of Colorado, USA.

c. The collection and analysis strategy I will use- The method used here is qualitative data
analysis. This is done to get descriptive information and to shed light on the information and
its interpretation.
d. The relationship and trustworthiness of my selected design- The method is useful instead
of quantitative analysis as it seeks out information directly from the sources and tries to find
out the actual grievances. Numbers can be manipulative but interpretation of the information
received from the sample provides better results.
e. Ethical issues and how it can be accounted for- One ethical issue I can think of is
intentional lies or unintentional misinformation provided by the people in the sample. Since
the sample size is large, this can be accounted for as part of lies and misinformation will be
diluted.

REFERENCES
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Springer, G. J. (2011). A study of job motivation, satisfaction, and performance among bank
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Lavanya, T., & Kalliath, N. M. (2015). Work motivation and leadership styles in relation to
organizational citizenship behavior. Annamalai International Journal Of Business
Studies & Research, Special Issue. 11-18. Retrieved from
http://www.annamalaiuniversity.ac.in
FDIC community banking study (2012). In Federal Deposit Insurance Corporation. Retrieved
https://fdic.gov/regulations/resources/cbi/report/CBSI-1.pdf

George, E., & Zakkariya, K. A. (2015). Job related stress and job satisfaction: a comparative
study among bank employees. Journal of Management Development, 34, 316-329.
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Oladapo, V. (2014). The impact of talent management on retention. Journal of Business
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Duda, J., & Žůrková, L. (2013). Costs of employee turnover. Acta Universitatis Agriculturae
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Eriksen, B. H. (2013). Should they stay or should they go? Sorting versus human capital loss
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Saha, S. K. (2014). Social change research the relationship between appreciative inquiry and
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