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ROI Analysis Teller Incentive Programs

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Get a look at just how impactful not having an incentive program can be to your institution when you attend this webinar brought to you by FMSI. Uncover insights for optimizing your teller productivity plus strategies for getting the most out of a teller incentive program.

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ROI Analysis Teller Incentive Programs

  1. 1. Top 6 Steps to Increase Incentive PayWorkforce Utilization and Branch CultureWith Special Guests From IH Mississippi Valley CU With Special Guests From Scott Credit Union & Century National Bank
  2. 2. • Welcome and Introductions• Current State of the Retail Branch Network• What Are Teller Productivity Incentives?• FMSI Incentive Program Study• A Closer Look – Scott Credit Union• A Closer Look – Century National Bank• Review Steps to Take for A Successful Incentive Program• Open discussion Including Q&A Session
  3. 3. • Gordon A. Williams IV, FMSI EVP Business Development• Steve Stryker, Scott Credit Union Chief Operating Officer• Christina Hahs, Scott Credit Union Branch Operations Mgr• Terri Sidwell, Century National Bank AVP/ Group Leader• W. Michael Scott, FMSI President/CEO• Chad Davis, FMSI VP of Marketing
  4. 4. Industry Branch Teller Transactions (thousands) - 41.9% Decrease
  5. 5. Industry Teller Productivity - 15.2% Decrease
  6. 6. Cost Per Transaction Trend - 100% Increase
  7. 7. Teller productivity incentives are variable compensationprograms utilized by institutions to drive desirable behavioron the teller line.• Productivity goals based on branch transaction volumes• Can be for individual and team• Common to tie service and accuracy metrics to payouts
  8. 8. Individual and Team Payouts
  9. 9. Transaction per Hour ComparisonTransactions per hour (TPH) is the total monetary transactionvolume as reported by the core processor divided by totalnumber of processing hours.
  10. 10. Labor Cost per Transaction Comparison is the average laborprocessing expense, per transaction on the teller line.
  11. 11. The following incentive plan implementation trend chart is froman actual FMSI client. We have removed the name of theinstitution for privacy reasons.
  12. 12. Consider how incentive programs impact your branch culture.• Improve employee morale• Stronger teamwork• Focus reduces errors• Better account holder service
  13. 13. Incentives allow high performers to shine• Engaged employees have stronger sales• Pay closer attention to management’s direction• Job enrichment• Less turnover
  14. 14. $850 million in assets, has 15 locations in Illinois.• Steve Stryker - Chief Operating Officer• Christina Hahs - Branch Operations Manager Client since January 2008
  15. 15. Rolled out incentive plan nine months after TMS started• Created unity and support in the branches• Increased productivity and efficiency• Seasoned teller adoption
  16. 16. Details of Their Incentive Plan
  17. 17. By the Numbers• Top performing tellers earn $200 extra per month in incentive dollars.• Payout a total of $2,000 per month on average (institution wide).
  18. 18. By the NumbersDecember 2011 Productivity Numbers:• TPH 17.4 (#49 out of 104 on FMSI Monthly Ranking Report)• Labor Cost Per Transaction $0.88 (#47 out of 104 rankings on FMSI Monthly Ranking Report)
  19. 19. Best Practices• Continually reinforce the new scheduling approach to your front-line staff.• During your periodic institution employee meetings, recognize your top performing tellers.• Promote to tellers that they have the potential to increase their hourly pay by $1.
  20. 20. $670 million in assets, has 14 locations in Ohio.• Recording from Terri Sidwell, AVP/ Group Leader at Century National Bank Client since October 2005
  21. 21. Encourages tellers to process transactions more quickly,accurately, and efficiently• Provides clear cut goals• Gives our tellers something to be proud of• Promote a team environment• Keeps our workforce optimization initiative top of mind
  22. 22. The Details of our Incentive Plan Individual Payouts Team Payouts
  23. 23. The Details of our Incentive Plan (cont.)• Must have a workforce utilization above 75%• Tellers must have a balanced cash drawer within $50 (net difference).• Employees who prepare the schedules receive a $50 bonus• Tellers who participate in the floater teller program earn $10 per day.
  24. 24. By the Numbers• Tellers typically earn $40-$50 extra per month in incentive dollars.• On average, Century’s Incentive Plan pays out $1,500- $1,900 per month(institution wide).• 75% of tellers earn some sort of incentive every month.
  25. 25. Establish an ongoing workforce optimization culture anddevelop the reports and enhanced scheduling to support it.
  26. 26. Run the workforce optimization initiative for six months to ayear to solidly establish the culture and program
  27. 27. • Will you use an individual, team, or combined approach?• Establish the payout details and make sure to include managers and supervisors in these stages to get their buy in.
  28. 28. Have a roll-out meeting and clearly communicate thedetails of the program to your branch managers whocan then disseminate this information to their team.
  29. 29. Have ongoing reviews to ensure the program isproducing desired results. Make adjustments asappropriate.
  30. 30. With the power of four basic management principles:• Feedback• Accountability• Recognition• RewardAn incentive plan empowers your institution to drive away anyline management resistance towards a successful workforceoptimization program.
  31. 31. FMSI clients utilizing incentive programs have greater rates ofreturn than those that do not (159% ROI as an example).
  32. 32. • It is now more important than ever for bank and credit union management to pay closer attention to their staffing levels.• Labor cost savings associated with a focused and dedicated workforce optimization program for teller-lines has become too great to ignore.• Utilize comparative performance data/benchmarking of other FIs to see how you compare. Average Labor Cost per Transaction – Consisting of Nationwide Financial Institutions of All Sizes
  33. 33. Financial institutions that implement an initiative thathelps them validate and manage teller labor costs –will achieve great indefinite cost savings.
  34. 34. FMSI has assisted over 600 financial institutions nationwidein optimizing their branch networks through applying Actionablebusiness intelligence from the analysis of transaction data.– Learn more at www.fmsi.com, or call 770.619.3443

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