Evaluating workforce efficiency: Improving the essential asset - human resources through benchmarking
In the rapidly evolving world of finance, banks and credit unions are increasingly turning to talent-focused benchmarking as a strategic tool to enhance operational efficiency and inform hiring practices. This approach involves evaluating an organization's workforce capabilities, leadership development, and recruitment processes against industry standards or best-in-class practices.
Key applications of talent-focused benchmarking include improving operational efficiency and informing hiring practices. In terms of operational efficiency, banks are leveraging workforce analytics to manage performance, anticipate attrition, and boost employee engagement. Insights from benchmarking can highlight where reskilling or upskilling is needed, ensuring that employees are prepared for evolving roles in digital transformation, product design, and data management.
Benchmarking also guides decisions about process automation, freeing up resources for value-added activities and ultimately improving operational efficiency. By comparing internal practices with industry benchmarks, banks can better align workforce roles with emerging needs, tailor training, and offer clear career progression—key drivers of employee retention and productivity.
In terms of hiring practices, executive recruiters for financial services use behavioral interviews, cultural assessments, and reference checks to ensure candidates are a strong fit not just on paper, but in practice. This is informed by benchmarking data on what makes for effective leadership in the sector. Benchmarking can also help institutions assess how they perform on diversity, equity, and inclusion metrics compared to peers, informing recruitment strategies that attract a wider pool of candidates.
Talent benchmarking helps identify the leadership skills most aligned with the organization’s mission and values, supporting more targeted and effective hiring. Furthermore, it aids in succession planning by identifying critical roles and leadership competencies, preparing internal talent, and—when necessary—informing external searches to fill gaps.
Additional benefits of talent-focused benchmarking include enhancing regulatory compliance and risk management, ensuring banks and credit unions stay ahead of regulatory expectations and industry shifts. By attracting and developing the right talent, financial institutions can accelerate progress for customers and communities, improving overall service and operational outcomes.
UCU in Los Angeles, for instance, uses benchmarking to compare its staff-to-product ratio with that of market peers to identify areas of improvement and motivation. UCU found it more accurate to measure the numbers of employees in its various units against product volumes in a determined market.
Similarly, HRCU credit union in Rochester, New Hampshire, uses benchmarking to compare operational metrics like ROA, operating expenses, fee income, salary and benefits, and staffing levels with industry averages. HRCU has set a goal for a net operating expense ratio of 75% and has reduced it from 83.72% to 75.59% through efficiency measures like automating internal reports and establishing minimal viable staffing levels.
In conclusion, by systematically applying talent-focused benchmarking, banks and credit unions ensure they are not only efficient and competitive but also future-ready in attracting, developing, and retaining the best talent. This approach answers questions about talent management costs, talent acquisition costs, effectiveness of talent acquisition, retention rates, geographic concentration of talent, and various HR-related metrics, ultimately elevating data's usefulness in improving a bank or credit union's internal operations.
- The integration of talent-focused benchmarking in business strategy can lead to more efficient operations, allowing banks to manage performance, anticipate attrition, and increase employee engagement.
- Workforce analytics, a product of benchmarking, helps identify areas where reskilling or upskilling is necessary to prepare employees for digital transformation, product design, and data management.
- Benchmarking facilitates informed decisions about process automation, freeing resources for value-added activities and ultimately improving operational efficiency.
- In terms of hiring practices, financial institutions use benchmarking data to ensure candidates are a good fit culturally and in terms of leadership skills, with the aim of recruiting sustainably and productively.
- By assessing diversity, equity, and inclusion metrics compared to peers, institutions can devise recruitment strategies that attract a wider range of candidates, fostering a more inclusive culture.
- Identifying the leadership skills most aligned with an organization's mission and values through benchmarking supports targeted and effective hiring and succession planning.
- Apart from operational benefits, talent benchmarking also enhances regulatory compliance and risk management, helping financial institutions stay ahead of industry shifts and regulatory expectations.
- Witnessing the effectiveness of talent-focused benchmarking, institutions like UCU and HRCU compare their staff-to-product ratios and operational metrics with industry averages, using this data to improve efficiency, reduce costs, and stay competitive in the market.
