Banks have made progress in reducing employee turnover over the past three years, according to data from the Crowe 2021 Bank Compensation and Benefits Survey.
The public accounting, consulting and technology firm compiled data from 437 banks and credit unions and includes information on benefits, incentives, director compensation and human resource practices, as well as bank salary and bonus benchmarks for 271 job positions.
Over the past two years, the average turnover rate for both nonofficer and officer positions has reduced significantly. The turnover rate for officer positions has been reduced from 7.3% in 2017, to 3.3% in 2021.
Although the turnover rate for nonofficers is higher than officers, it dropped from 23.6% in 2019 to 16.2% in 2021, the lowest it has been in four years.
Timothy Reimink, managing director at Crowe, said: "The data shows that banks have been making great progress in reducing turnover, even during a time when many industries are seeing severe attrition in their workforce.
"Banks are investing in their people and have taken steps to improve retention and their recruiting efforts by offering better benefits, more flexibility and higher raises."
Among those surveyed in 2021, 62.4% of financial service organizations have a pay-for-performance program which leading practices suggest is the best pay strategy to increase employee morale.
According to the data collected in this year's survey, there was a 5.5% pay increase for employees who exceed expectations, which is the highest increase for top performers in 10 years.
More banks are retaining and recruiting top talent by acknowledging the importance of work-life balance.
Mark Waltztoni, managing director specializing in employee benefit plans at Crowe, said: "Fewer banks are requiring extended tenure to qualify for three or more weeks of paid time off and are shifting towards increasingly generous PTO plans for new hires, especially at the officer level.”
The survey found that 30% of banks granted three or more weeks of PTO to officers as part of their hire-on benefits.
Other key finding showed survey respondents had a more confident outlook on the economy and performance of their organization, with only 11% anticipating smaller-than-normal raises compared to 44% in last year’s survey.
Meanwhile 75% of banks reported that they allowed some employees to work remotely at least one day per week. Reimink said it will be interesting to monitor the effect these changes will have on recruitment and retention in the next several years.