Although labor is typically the largest line item in an operating budget, most banks lack good methods for measuring, deploying and optimizing human capital.
That's not the case at Royal Bank of Canada, though. Since 1996, when the $362 billion institution installed workforce management software from GMT in its branch operations, it has been able to pinpoint precisely where and when tellers were needed.
Eighteen months ago, Royal Bank of Canada moved from GMT's original DOS-based system to it's Windows-based Planet product. The new application will help increase the bank's ability to schedule as effectively as possible.
"We needed to make sure we were being equitable across the field and putting people at the right place, at the right time for the right reasons," said Dick Johnson, senior manager of operations and resource optimization at Toronto-based Royal Bank of Canada.
Four of Johnson's team members, called resource optimization associates, are responsible for scheduling almost 20,000 employees at more than 1,350 Royal Bank of Canada branches.
"We work in partnership with the branches," said Johnson. "But being central helps us to standardize and makes sure the uniformity of policies and practices is implemented into each branch."
GMT's Planet comprises four basic modules: forecasting, staffing, scheduling and reporting. Transactional data is collected from the branches in 15-minute intervals, allowing Johnson's staff to model how many employees are needed, based on average service and transaction times.
"We're counting customers and saying how many employees do we need to serve those customers well, and when do we need them," said Johnson.
Armed with this information, the team builds the best-optimized schedule for each branch once a year. New information downloaded monthly is used to identify branches that have significantly changed. "All we have to do is get good data reporting," said Johnson. "If things don't change, then we can assume the schedules are still adequate. As soon as we see our volumes change in any particular unit, our reporting is calibrated so it identifies the branches which are over certain tolerances, and we jump on those real quick."
However, most branches are fairly steady in transactional levels. So instead of managing 1,350 branches, the team can manage the exceptions.
"That's why we've been able to improve our efficiency," said Johnson. "We know with the Planet application we can quickly turn around a schedule, so we don't have to plan weeks or months ahead of time."
Feedback-via customer surveys, area management and the bank branches themselves-is also used to fine-tune employee scheduling. "By knowing how the schedules are impacting our units and ensuring that we are always getting feedback on our success and the precision of our schedules, we can better refine the schedules," said Johnson.
The bank has further fine-tuned its operations through scenario testing, in which system parameters are varied and the effects on wait and service times calculated. As the team becomes more proficient with the system and the data becomes more accurate, the level of scenario testing has increased.
"We've been doing a lot of what-ifs," said Johnson. "It helps us get a lot more precise than we used to be able to with the former application. We couldn't do that with the old stuff."
Costs for the Planet product range from $400 to $1,000 per branch. Return-on-investment is in the form of increased staff efficiency, plus improved allocation of resources in the field.
"When we looked at the return on the investment for the cost of the software, we knew our productivity would increase at least two-fold," said Johnson. "From a corporate standpoint, the return on investment was one to 30."
One of the biggest benefits has been the ability to provide consistent service levels throughout the branch system.
"That is the important thing," said Johnson. "We are realizing that if we improve the level of service to our people in the transaction segment of our banks, we will retain more very valuable customers. The number one complaint of customers is generally the bank teller lineup."
He continued, "If you do it consistently and maintain a feedback mechanism to tell you whether or not you're still doing it right, then you're doing your best service to your customer and ultimately, it's win-win."
INSTITUTION: Royal Bank of Canada
ASSETS: $362 billion
BUSINESS CHALLENGE: Optimize allocation of branch tellers and provide consistent levels of service.
SOLUTION: Planet from GMT
KEY QUOTE: "We're counting customers and saying how many employees do we need to serve those customers well, and when do we need them."