Tradition, stability and dependability are hallmarks along the Ohio/Pennsylvania border, an area best known as the home to America’s steel industry. From these sturdy roots, FirstMerit Corp. has grown steadfast, proud, and strong. In business since 1845, the financial service company has emerged as one of the area’s leading retail bank networks, operating in 24 Ohio and Pennsylvania counties, overseeing $10.2 billion in assets, and offering a wide range of services from omnipresent ATM machines to Internet banking.
Like most banks, FirstMerit understood that in order to remain viable in the intensely competitive financial services market, the company needed to become larger. Consequently in the late 1990s, the bank embarked on an aggressive acquisition strategy and ended up doubling in size. The changes enhanced the financial services company’s competitive position but also raised questions about the efficiency of its new operation. Common business processes and performance metrics had to be put into place, so the bank could accurately identify both its accomplishments and blind spots.
A key area of emphasis was teller staffing – the frontlines of customer service and mainstays in the banking industry. Just about every customer purchase (nine of ten) is completed in a branch office and 95 percent of customers walk into one each month. Recognizing the importance of their branch networks, banks spend more than $124 billion on teller staffing each year.
Like many banks, FirstMerit wanted to maximize the return on this most significant investment. To do so, the company needed tools that accurately captured meta data, such as how much money it was investing in its teller network, as well as granular data, such as the performance of regions, branches or individual employees. The bank also wanted to differentiate itself from competitors by revamping its compensation structure and putting incentives in place so that more productive employees earned more money.
In 2004, the financial services company began researching workforce optimization systems and evaluated two systems, Demos and GMT Planet. The company selected GMT Planet, a highly-acclaimed workforce optimization system that provides companies with right staffing levels, for several reasons: (1) GMT offers superior feature functionality including a simple browser interface; (2) the GMT team was clearly passionate about its solution; (3) GMT brought solid business partners to the table to assist with implementation; and (4) GMT offered a lower total cost of ownership (TCO).
With GMT, FirstMerit could now enhance customer service and increase sales revenue while controlling payroll expenses. The majority of the bank’s 160+ branches are currently using GMT’s auto-scheduling directly, while staffing for the remaining branches is centrally determined utilizing the GMT system.
GMT Planet also gave additional firepower to FirstMerit’s Business Consulting Service (BCS) group, a small group of specialists responsible for finding ways to ensure that the company’s workforce was operating as efficiently as possible. “GMT Planet is a superb tool which facilitated millions of dollars in costs savings while helping to maintain or improve customer satisfaction. We have had so much success with the GMT system that we are now driving adoption deeper into the organization,” said Larry Shoff, executive vice president and chief technology officer at FirstMerit.
By using GMT Planet to manage teller staffing requirements, FirstMerit modeled a 5.46% reduction in authorized teller staffing and a 6.33% modeled reduction in platform staff for 2005; but it actually enjoyed a higher 7.62% reduction in full-time equivalent (FTE) tellers paid staffing and 6.55% reduction in platform FTE pay in 2005. Following additional refinements to the GMT staffing model, the company expects that its teller staffing savings will increase substantially in 2006 and 2007.
The company also decided to transform its pay system from a set salary to a performance-based compensation system. Since the late 1990’s and more so in 2004- 05, many departments within the bank structured all or a portion of employee compensation on a series of measurements. For teller staff, this would include items such as attendance (specifically, being present on peak days), work accuracy, customer service and closed referrals (changed from a set amount per quarter to five per month). With the new plan, tellers can make as much as $3,200 more per year on top of their base salaries.
All of these changes and improvements have led to a $2.297 million savings in salaries and benefits so far. The firm’s new time and attendance system, which was also implemented in the branches, contributed $1.9 million more in enterprise-wide salary and benefits savings. Further, employee turnover also has decreased, with rising morale as measured by a recent employee survey. The changes also resulted in improved customer service: the company achieved a $1.175 million improvement (27% increase in closed referrals) in teller-generated new business, and its customer service satisfaction ratings increased from 4.75 to 4.80.
FirstMerit’s success has been so great that at the end of 2005 the company expanded its use of GMT Planet to the company’s call center which has 75 agents. The GMT software provides an easy to use, real-time staff performance dashboard so managers and employees can monitor workforce performance in real time. Consequently, the financial services organization has seen a 7% improvement in service level (calls answered in 30 seconds or less) and a continued linear improvement in service level over the last nine months. The end result is that workforce optimization has become a key differentiator for the bank and significantly strengthened its top-tier market position.
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