Fifth Third Bank: Putting People First
by Agatha Gilmore
In times of hardship, the natural response is to buckle down, retrench and strive to maintain the status quo. Today's stumbling economy presents no exception. While most financial institutions are focusing on the bottom line, Cincinnati-based Fifth Third Bank is taking a different approach: It's focusing on its people - all 22,000 of them.
After all, it's the people who are responsible for the organization' s competitive industry performance, and it's the people who make the difference when the economy turns around, said Brent Carter, vice president and director of talent management and workforce planning at Fifth Third. Carter has worked to ingrain a talent mindset into every aspect of the business, from managing succession to establishing strategic goals. By effectively humanizing the institution, he hopes to better prepare the organization for the future.
TM: Describe your company's approach to talent management.
Carter: We try to have an integrated approach so that we're not operating in silos. We have to make sure we have performance management linked with development linked with talent assessment processes, and then make sure that through all those efforts we're supporting and improving our business goals.
TM: What programs have you established to improve the performance of the entire workforce?
Carter: We've always tracked business at a branch level, but now we can track down to the employee level. If [employees] know their monthly goal is to get X number of deposits, loans, credit cards, et cetera, sold, they can check that on a day-to-day basis and find out where they stand.
[Additionally] , if we have certain expectations, we make sure people have the knowledge to get there. For instance, if they need Series 7 certification, we provide the training. Not only do we let people know what to expect in terms of their performance, but we provide support and a vehicle to do that.
We've also rolled out consistent goals across the board. We have 18 different affiliates, so instead of having 18 different sets of goals for retail, we drive that more centrally. We drive common goals out to everyone.
TM: How is performance management linked to the strategic objectives of your organization?
Carter: We make sure that any goals established in our system fall within one of the categories related to our strategic objectives. Either they're related to business results, employee engagement or customer experience, or they have to do with expense control. If anybody creates a goal in the performance management system, it has to fall within one of those four categories.
TM: How does your company work to change or create leadership and management behaviors that lead to optimal workforce performance?
Carter: The key part of that is setting the expectation. We've got a tiered competency model for executives, leaders, managers and individual contributors. Executives know, for instance, they are to drive for results; they are to champion change. Those are the common competencies that set the expectations. They're measured on those in our annual performance cycle. For more specific behaviors that drive performance, we have an annual talent review cycle. [Managers] know through that talent review process what their strengths are, what their development needs are, what they need to do to improve themselves as leaders in the company.
TM: How does your company develop organizational culture and employee attitudes to optimize workforce performance?
Carter: We have a culture of "what gets measured gets done." We measure almost anything. In fact, if we're launching a new [service], one of our first conversations is, what results are we expecting, and what are the metrics to measure those results? People know that; it's just part of our culture. As I said, we're tracking performance down to the individual contributor level, so we measure, we reward performance and we have friendly competition. Affiliates, banking centers and our commercial middle-market folks all know where they are stack-ranked compared to their peers.
TM: What processes or programs have you established to attract, recruit and retain top talent?
Carter: Instead of having recruiting organizations in 18 different affiliates, we've consolidated and regionalized, and now we have certain recruiters who are focused on just commercial or just retail talent. So they become very familiar with the type of skills and experience required.
[Also, when internal candidates] say they're not relocatable right now, we're still going to tap them on the shoulder and let them know they're being sought after, that their name was being considered for this position. It's a good retention strategy because people know they're still on the radar.
TM: How do you handle succession planning at your organization?
Carter: We try to promote from within to the extent we can. Over the past couple of years, we've swung the pendulum from hiring mostly externally for top positions to now 75 percent internal placement. We require 100 percent identification of immediate successors for all assessing managers - so the top 300 positions. We make sure the business continuity is there. If somebody's not actually ready now, we identify them and indicate some sort of readiness: two years, three to five years. In the past two years, our turnover has come down.
Also, in the past few years we've gone to a "talent pool" concept. We don't just look at that manager's successor; we look across the board to see if there are others who might fill that position. If you say [a potential successor] is not really on track for your position, [we'd ask], "Is there another position in the bank they would be ready for?" A lot of it is based on current position, readiness for this position that we're looking at them for, knowledge, how long they've been with the company and certainly the leadership competencies: Have they led large teams? Do they inspire followership? We really leverage that, so when the time comes where a position opens up, we'll have ready successors.
TM: What compensation and incentive practices do you use to help manage talent in your organization?
Carter: We have three types of pay compensation: There's merit pay, bonus pay - which we call variable compensation - and long-term incentive [compensation] that we pay in equity, either in restricted stock or stock appreciation rights. What was a little bit different this year, and turned out to be a real positive, is that as with other financial companies, our performance was very tough. The mortgage industry, the credit issues: It's hit us as hard as it has other banks. But compared to our peers, we've performed much better. This year's variable comp was based on our performance related to our peers.
So on paper, it looks like '07 was a tough year. It looks like variable comp is going to be low, [but] because we performed very well in relation to our peers, variable was much higher for people than they would've expected. That's a key factor in retention. People can say, "Gosh, yet another tough year. I'm tired of this. I'm going to go work for another company." But we rewarded for the effort people put forth.
TM: How have your workforce performance management activities contributed to your company's bottom line?
Carter: The way we measure performance directly impacts the bottom line. The other thing that we do, as most good profitable companies do, is take a look at those that are underperforming. If they're not performing according to plan, or especially if they're well below that, we'll go through the process of counseling, trying to improve their performance. But if that's not working, then they're not going to stay with the company. We don't hold on to people for a long time if they're not performing.
TM: What challenges impact talent management in your organization?
Carter: The economic picture is very tough. When [sales associates] can't get the business, profitability is down. Maybe their compensation isn't what they think it should be and stock price has been declining. Those are tough times for people. Sometimes that triggers thoughts about the "grass is greener on the other side." So from a talent perspective, it's a challenge in that we've lost some good people to other companies. When they go to those other companies, they find out the grass is pretty much the same color!
I think the other thing is, we have a good expense ratio, and we run pretty lean. There's not much fat to trim, especially in our staff divisions. It becomes tougher to pay attention and do those things that are necessary for talent, like development. People's time is spent focusing on the bottom line, doing what they need to do to generate income or keep expenses under control.
TM: What's next for your organization in terms of talent management and workforce performance development?
Carter: Instead of having talent activities or events, instead of [saying], now it's time for performance management, now it's time for total rewards or compensation, now it's time to do our employee engagement survey, we want talent focus to be year-round. It should be just part of a manager's job, a leader's job, to focus on talent: Am I optimizing the talent that I have? Am I developing them? Am I very clear on expectations? Am I clear on where their performance levels should be? Am I providing the feedback I need to?
Now is really the key time to focus on talent because when the economy breaks open and people are better off financially and they start spending money again, they start investing again, they start buying houses we're doing the foundational things now to be prepared for that launch. And I think a lot of companies maybe don't realize that. They're focused so much on the bottom line, they're not focusing on talent. I think we're going to be much better prepared when that bubble opens up.
[About the Author: Agatha Gilmore is an associate editor for Talent Management magazine.]
by Agatha Gilmore
In times of hardship, the natural response is to buckle down, retrench and strive to maintain the status quo. Today's stumbling economy presents no exception. While most financial institutions are focusing on the bottom line, Cincinnati-based Fifth Third Bank is taking a different approach: It's focusing on its people - all 22,000 of them.
After all, it's the people who are responsible for the organization' s competitive industry performance, and it's the people who make the difference when the economy turns around, said Brent Carter, vice president and director of talent management and workforce planning at Fifth Third. Carter has worked to ingrain a talent mindset into every aspect of the business, from managing succession to establishing strategic goals. By effectively humanizing the institution, he hopes to better prepare the organization for the future.
TM: Describe your company's approach to talent management.
Carter: We try to have an integrated approach so that we're not operating in silos. We have to make sure we have performance management linked with development linked with talent assessment processes, and then make sure that through all those efforts we're supporting and improving our business goals.
TM: What programs have you established to improve the performance of the entire workforce?
Carter: We've always tracked business at a branch level, but now we can track down to the employee level. If [employees] know their monthly goal is to get X number of deposits, loans, credit cards, et cetera, sold, they can check that on a day-to-day basis and find out where they stand.
[Additionally] , if we have certain expectations, we make sure people have the knowledge to get there. For instance, if they need Series 7 certification, we provide the training. Not only do we let people know what to expect in terms of their performance, but we provide support and a vehicle to do that.
We've also rolled out consistent goals across the board. We have 18 different affiliates, so instead of having 18 different sets of goals for retail, we drive that more centrally. We drive common goals out to everyone.
TM: How is performance management linked to the strategic objectives of your organization?
Carter: We make sure that any goals established in our system fall within one of the categories related to our strategic objectives. Either they're related to business results, employee engagement or customer experience, or they have to do with expense control. If anybody creates a goal in the performance management system, it has to fall within one of those four categories.
TM: How does your company work to change or create leadership and management behaviors that lead to optimal workforce performance?
Carter: The key part of that is setting the expectation. We've got a tiered competency model for executives, leaders, managers and individual contributors. Executives know, for instance, they are to drive for results; they are to champion change. Those are the common competencies that set the expectations. They're measured on those in our annual performance cycle. For more specific behaviors that drive performance, we have an annual talent review cycle. [Managers] know through that talent review process what their strengths are, what their development needs are, what they need to do to improve themselves as leaders in the company.
TM: How does your company develop organizational culture and employee attitudes to optimize workforce performance?
Carter: We have a culture of "what gets measured gets done." We measure almost anything. In fact, if we're launching a new [service], one of our first conversations is, what results are we expecting, and what are the metrics to measure those results? People know that; it's just part of our culture. As I said, we're tracking performance down to the individual contributor level, so we measure, we reward performance and we have friendly competition. Affiliates, banking centers and our commercial middle-market folks all know where they are stack-ranked compared to their peers.
TM: What processes or programs have you established to attract, recruit and retain top talent?
Carter: Instead of having recruiting organizations in 18 different affiliates, we've consolidated and regionalized, and now we have certain recruiters who are focused on just commercial or just retail talent. So they become very familiar with the type of skills and experience required.
[Also, when internal candidates] say they're not relocatable right now, we're still going to tap them on the shoulder and let them know they're being sought after, that their name was being considered for this position. It's a good retention strategy because people know they're still on the radar.
TM: How do you handle succession planning at your organization?
Carter: We try to promote from within to the extent we can. Over the past couple of years, we've swung the pendulum from hiring mostly externally for top positions to now 75 percent internal placement. We require 100 percent identification of immediate successors for all assessing managers - so the top 300 positions. We make sure the business continuity is there. If somebody's not actually ready now, we identify them and indicate some sort of readiness: two years, three to five years. In the past two years, our turnover has come down.
Also, in the past few years we've gone to a "talent pool" concept. We don't just look at that manager's successor; we look across the board to see if there are others who might fill that position. If you say [a potential successor] is not really on track for your position, [we'd ask], "Is there another position in the bank they would be ready for?" A lot of it is based on current position, readiness for this position that we're looking at them for, knowledge, how long they've been with the company and certainly the leadership competencies: Have they led large teams? Do they inspire followership? We really leverage that, so when the time comes where a position opens up, we'll have ready successors.
TM: What compensation and incentive practices do you use to help manage talent in your organization?
Carter: We have three types of pay compensation: There's merit pay, bonus pay - which we call variable compensation - and long-term incentive [compensation] that we pay in equity, either in restricted stock or stock appreciation rights. What was a little bit different this year, and turned out to be a real positive, is that as with other financial companies, our performance was very tough. The mortgage industry, the credit issues: It's hit us as hard as it has other banks. But compared to our peers, we've performed much better. This year's variable comp was based on our performance related to our peers.
So on paper, it looks like '07 was a tough year. It looks like variable comp is going to be low, [but] because we performed very well in relation to our peers, variable was much higher for people than they would've expected. That's a key factor in retention. People can say, "Gosh, yet another tough year. I'm tired of this. I'm going to go work for another company." But we rewarded for the effort people put forth.
TM: How have your workforce performance management activities contributed to your company's bottom line?
Carter: The way we measure performance directly impacts the bottom line. The other thing that we do, as most good profitable companies do, is take a look at those that are underperforming. If they're not performing according to plan, or especially if they're well below that, we'll go through the process of counseling, trying to improve their performance. But if that's not working, then they're not going to stay with the company. We don't hold on to people for a long time if they're not performing.
TM: What challenges impact talent management in your organization?
Carter: The economic picture is very tough. When [sales associates] can't get the business, profitability is down. Maybe their compensation isn't what they think it should be and stock price has been declining. Those are tough times for people. Sometimes that triggers thoughts about the "grass is greener on the other side." So from a talent perspective, it's a challenge in that we've lost some good people to other companies. When they go to those other companies, they find out the grass is pretty much the same color!
I think the other thing is, we have a good expense ratio, and we run pretty lean. There's not much fat to trim, especially in our staff divisions. It becomes tougher to pay attention and do those things that are necessary for talent, like development. People's time is spent focusing on the bottom line, doing what they need to do to generate income or keep expenses under control.
TM: What's next for your organization in terms of talent management and workforce performance development?
Carter: Instead of having talent activities or events, instead of [saying], now it's time for performance management, now it's time for total rewards or compensation, now it's time to do our employee engagement survey, we want talent focus to be year-round. It should be just part of a manager's job, a leader's job, to focus on talent: Am I optimizing the talent that I have? Am I developing them? Am I very clear on expectations? Am I clear on where their performance levels should be? Am I providing the feedback I need to?
Now is really the key time to focus on talent because when the economy breaks open and people are better off financially and they start spending money again, they start investing again, they start buying houses we're doing the foundational things now to be prepared for that launch. And I think a lot of companies maybe don't realize that. They're focused so much on the bottom line, they're not focusing on talent. I think we're going to be much better prepared when that bubble opens up.
[About the Author: Agatha Gilmore is an associate editor for Talent Management magazine.]