In the shadow of global recession, banks are fundamentally reexamining their primary source
of comparative advantage: their people. Amid increased regulatory scrutiny and growing
operating costs, banks face mounting pressure to demonstrate returns on talent investments—
and deep uncertainty about whether current investments are working.
In early 2009, the American Bankers Association and the Corporate Executive Board invited a
sample of more than 3,500 bank CEOs to participate in a survey about talent management
practices at their institutions. The survey asked respondents questions on the following talent-
– Current Talent Management Practices
– Retention and Succession Planning
– Developing High Performers
– Assessing Talent Gaps
– Future Talent Management Priorities
The research reveals that although bank CEOs are increasing their talent focus, talent
programs fail to yield consistent results. The report finds that:
– A wide range of talent management practices are only partly in place at most banks
– Banks depend heavily on internal talent and lack succession planning capabilities
– Banks are under developing high-performing talent, creating severe threats to retention of
key personnel and longer-term profitability
– A majority of banks are unable to assess training needs and outputs, and run the risk of
making continued investments in underperforming programs.
The Survey Results
• The results of ABA’s Talent Management Survey paint a somewhat concerning picture on the
state of how banks manage one of their most important assets – their people - within the banking
• The issue requires creative leadership skills and a dedicated executive level commitment if we as
an industry are going to solve these challenges and position ourselves for success
• We define talent management as including the following 11 activities:
– Culture and values
– Workforce planning
– On boarding new hires
– Training and development
– Employee Engagement
– High performer development
– Rewards and recognition
– Succession planning
– Talent record-keeping/reporting and analysis
Talent Management in Crisis: Cross Industry Trends
The economic downturn has dramatically affected employee outcomes in three ways:
• Declining Employee Productivity. Overall employee performance is suffering due to declining
employee engagement , and declining employee morale coincides with serious drops in employee
effort and productivity. Over the past 4 years, the number of employees exhibiting high levels of
discretionary effort has declined by 53%, leading to productivity losses.
• More Disengaged Employees. Low performing employees are less likely to quit now than they
ever have been before , and the rise in disengaged employees places even greater pressure on
managers. This trend has created even more complex people challenges for managers who often
have limited experience in re-engaging uncommitted staff
• Increased Risk That High Potentials Will Leave. High potential employees – future leaders – are
indicating increased risk of turnover , while the tolls of disengaged and low-producing employees
are increasing, High potential employees are now more inclined to quit., and 25% of high potential
employees plan to leave their current job over the next twelve months.
Bank Specific Talent Challenges
• Difficulty Executing Effective Talent Strategies. With serious talent challenges present across all
industries, it’s not surprising to find CEOs re-evaluating their talent management practices. The
ABA/CEB research finds that CEOs recognize the importance of talent to their enterprises, but
suffer from dry talent pipelines and uncertain payoffs from current training and development
• Building a Talent Pipeline is Essential. An important link between talent management and high
potential employee development focuses on the identification of key positions within the
organization and building the talent pipeline to fill those roles. “The most effective talent
strategies first identify those jobs in the organization that are key to the ongoing business strategy,
ensuring that staff are ready for the jobs they are slated to fill”, reports a recent study on
leadership practices conducted by the Chief Learning Officer.
Implications for the Banking Industry
• Increased Retention Risk. Banks underemphasize the importance of high performer development
and under invest in high-performer programs.
To mitigate against high-performer attrition, banks must formulate clear development plans
and career paths for their best talent.
• Uncertain Training ROI. Banks routinely emphasize the importance of training and development
yet fail to measure training needs or outcomes.
To generate demonstrable returns on training investments, banks must focus programs on
applied learning, which increases employee engagement and productivity levels.
Three tactics critical to training success are:
– Emphasize learners’ ability to apply the skills learned through training
– Communicate the payoffs of training to employees
– Engage managers in employee training to make learning application effective
TOP TALENT CHALLENGES FACING BANKS
1. A wide range of talent management practices are only “partly in place”
at most banks.
2. Banks depend heavily on internal talent and lack succession planning
3. Banks are under-developing high-performing talent, creating severe threats
to retention of key personnel and longer-term productivity.
4. A majority of banks are unable to assess employee training needs and
outputs and run the risk of making continued investments in
American Bankers Association/The Corporate Executive Board Company
1. A wide range of talent management practices
are only “partly in place” at most banks.
CEO Assessment of Importance of
Talent Management Practices
• op 3 rankings:
- Culture and
- Training and
CEO Assessment of Existing
Talent Management Practices
The Issue is in Execution:
CEOs indicate that the practices
listed below rank among the top
three in terms of importance, but are
only ‘somewhat to mostly’ in place:
• ulture and Values
• raining and Development
• mployee Engagement
CEO Assessment of Talent Management Practices
“Importance” Versus Ability to Put These “In Place”
2. Banks depend heavily on internal talent and
lack succession planning capabilities.
Banks Fill 60% of Positions Internally
High Performers are Important – they exert 21%
more effort than average employees
who your high
Do you recognize
High Performer Risk - One in four expect to leave within
HiPo’s contribute more to
your organization, but 25%
are considering leaving
within 12 months.
How do you retain them?
Banks have limited ability to rely on talent pipelines.
Is a critical
3. Banks are under-developing high-performing
talent, creating severe threats to retention of
key personnel and longer-term productivity.
High performers exert 21%
more effort than average employees
Without significant ability, aspiration and engagement,
employees will not excel in their next jobs.
Banks underemphasize high performer development
and under-invest in high-performer programs.
to your HIPO’s?
Have you provided
an individual written
How actionable is
To mitigate against high-performer attrition, banks should
formulate clear development plans and career paths for top talent.
4. A majority of banks are unable to assess
employee training needs and outputs and run
the risk of making continued investments in
A majority of banks are unable to assess training needs and the
impact of training on performance
Focus training programs on applied learning, which
increases employee engagement and productivity levels.
Visibly supporting employee development can increase
performance by 20%.
Call to Action
1. Invest in high potential employees to increase output levels,
develop a leadership pipeline and retain these key performers.
a. Help high potential employees build professional, information-rich relationships
with managers, peers, and direct reports.
b. Build customized and achievable development plans that are coupled with visible
2. Focus training programs on applied learning to engage employees
and increase their productivity levels.
a. Emphasize learners’ ability to apply the teaching more than emphasizing skill building.
b. Communicate the payoff s of training to employees.
c. Engage managers in employee training to make learning application effective.
For further information on survey findings please contact:
Jim Edrington or Maryann Johnson
(202) 663-5490 (202) 63-5199