Last week the Virginia Bankers’ Association had a futurist at their annual convention. Among other things, he predicted that the pandemic induced, government supported prolonged labor shortage will accelerate the pace in which society will replace low-level jobs with remote technology, automated intelligence, and robots. He gave an example of McDonald’s experimenting with centralized drive-thru ordering, with the employee that takes the order in some far away locale. And they were working to replace this with chat bots.
I thought of the implications.
I grew up without much. My first job was a paperboy until I was old enough to be a W2 employee. When that happened, I flipped burgers and washed dishes through high school. My first banking job was making microfiche on a Datagraphix 4590 for the local bank, which helped pay for college.
I then went into the Navy. There, along with my primary
technical job, I destroyed classified material in a kiln, waxed floors, cleaned
bathrooms. This added nothing to my knowledge and understanding of the banking
industry and its future.
But without it, would I be who I am today? Worse, would I
even have gotten the chance to climb that ladder if the bottom rungs were
removed?
We see these trends in entry level banking jobs. At first,
it was the ATM taking transactional work away from the teller. Which evolved to
cash recyclers automating cash handling. This has led to the decline of
traditional branch staffing from eight-to-ten FTEs per branch to four-to-five. And
the trend continues with the introduction of the ITM. Indeed, the problem with
branch staffing has gone from “how do we handle the transaction volume” to “how
do we cover the lobby hours?”
Many financial institutions are looking to auto-decision
small commercial loans. Replacing the work of the junior credit analyst with an
algorithm. Introductory investment management is going away from the junior
wealth manager and migrating to robo advising. In our challenging interest rate
and therefore net interest margin environment, banks are working hard to
automate as much support processes as possible to increase assets, loans, and
deposits per FTE.
These are all good things, in my opinion. As lower-level
work is automated, this leaves more challenging work for us humans. Which should
translate to better compensation for who’s left, and greater resources to serve
the bank’s other stakeholders.
But what of the bottom rungs? When we remove them, are we
building a system that provides advantage to those that can make the pivot, or have
the time and resources to be able to start at the third rung? I needed to be
that dishwasher, floor scrubber, and tape librarian. I could not afford to
support myself and my young family, go to college, and elevate up the ladder
had I not started at the bottom.
This can play into a bank’s higher purpose. To provide
economic mobility to those that can’t start on second base (some of whom
thought they hit a double). There must be purposeful employee development to
turn entry level employees into higher level and high performing employees of
the future. Even if you hire them to punch above their current weight.
Philip Kotler, former Marketing professor from Northwestern University, in describing "Firms of Endearment" from the 2014 book (second edition) of the same name, noted that one characteristic of a Firm of Endearment was that employees were paid more, trained longer, and stayed longer than at peer companies.
Initially, however, your struggle while they struggle is a journey worth taking
if you can build the workforce of your bank’s future from the ground up. While
leveling the playing field for those that by their circumstance must start
climbing the ladder from the bottom.
~ Jeff
And please consider reading the book: Squared Away-How Can Bankers Succeed as Economic First Responders.
Ten percent of author royalties go to K9sForWarriors.org, who work to bring down the suicide rate among our veterans.
Thank you!
