How Fleet Bank fought employee flight

In the late 1990s, Fleet Bank was facing high and rising employee turnover, particularly in its retail operations. Overall turnover had reached 25% annually, and among some groups, such as tellers and customer service reps, turnover was as high as 40%. Using a new methodology developed by Mercer Human Resource Consulting, Fleet set out to determine why so many employees were leaving and what could be done to retain them. It began examining data from HR, finance, operations, and sales about employee behavior and the factors that influence it in different locations and labor markets, departments or work groups, in positions with different pay and benefits, and under different supervisors. Fleet's analysis showed that people were leaving not so much for better pay--their personal testimony notwithstanding--but for broader experience, which they thought would enhance their marketability. Additionally, the analysis revealed a link between the turnover problem and the company's busy history of mergers and acquisitions. Fleet's mergers and acquisitions. frequently meant that it had to consolidate operations. That consolidation resulted in layoffs, which provoked higher levels of voluntary turnover, perhaps because remaining employees began worrying about their job security. While the obvious solution to the turnover problem might have been to compensate the remaining employees--say, with higher pay--the more effective and less costly solution, Fleet discovered, was to focus on employees' career opportunities within the company. Those who moved up the hierarchy, or who even made lateral moves, stayed longer. By offering better internal opportunities for career development, the bank was able to stanch much of the hemorrhaging in personnel. Its solutions required only modest investments, which in the end saved the company millions of dollars.