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An Immeasurable Return
Bankers struggling to hang onto talent could take a cue from Lowe’s.
During a recent quarterly earnings call, Lowe’s CEO and Chair Marvin Ellison said the home improvement chain awarded $55 million in bonuses to its hourly, frontline employees to offset the impact of inflation. “These associates have the most important jobs in our company,” he said. “We deeply appreciate everything they do to serve our customers.”
Bonuses not linked to performance aren’t a novel concept, and Lowe’s is hardly alone in its endeavor. San Antonio-based USAA, with $118 billion of assets, also announced in August that it would help soften the blow of inflation by awarding a one-time $1,000 bonus to employees making less than $100,000 annually. Several school districts across the country have also said they are paying retention bonuses to keep teachers and support staff.
Earlier this year, $37 billion BankUnited in Miami Lakes, Florida, announced that it spent $6.8 million in the fourth quarter 2021 to give each of its employees a bonus of $5,000. This was “in recognition of their hard work and efforts in the challenging environment we have faced over the past two years,” according to the bank’s earnings release.
This move differed from the kind of performance-driven bonuses the company had typically awarded, CEO Rajinder Singh said in its January earnings call. Everyone, from tellers earning entry-level pay to heads of business lines, received this $5,000 bonus, he said, describing the move as “a very wise, long-term investment in our people.”
Bankers have identified branch staff and entry-level jobs as some of the toughest roles to fill over the past year, according to Bank Director’s 2022 Compensation Survey. That shouldn’t come as a surprise to anyone who’s worked a stint in customer service: the work can be challenging and thankless, and sometimes customers treat those workers like their own (metaphorical) punching bag.
Many banks paid bonuses to those employees during the early days of the pandemic. With front-line workers once again facing rough economic waters, executives may want to think about whether bonuses could help engender a sense of loyalty to the organization. Singh saw this at BankUnited.
“I cannot tell you the amount of goodwill that the company earned through this $7 million investment,” Singh said. “This will provide a return, which is hard to measure, over many, many years to come. Our people will remember this. It just changed the dialogue in the company.”
• Laura Alix, director of research for Bank Director
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