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How Fleet Bank fought employee flight (Harvard Business Review article)


Written by: Haig Nalbantian, Anne Szostak

 

                  

 

April 2004

Harvard Business Review

 

How Fleet Bank Fought Employee Flight 

 

 Download article PDF

 

About the authors

 

Haig R. Nalbantian, an economist, is a principal of Mercer Human Resource
Consulting and a coauthor of Play to
Your Strengths: Managing Your Internal Labor Markets for Lasting Competitive Advantage
(McGraw-Hill,
2004).

 

Anne Szostak is the executive
vice president and the corporate direc-
tor of human esources and diversity of
FleetBoston Financial.

 

 More about "Play to Your Strengths"

 

 Contact the authors by e-mail

We are pleased to share with you a downloadable PDF of the April 2004 Harvard Business Review article – 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. Fleet's analysis showed that people were leaving not so much for better pay 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. Although 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. Its solutions required only modest investments that, in the end, saved the company millions of dollars.