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A BANK STAFFING PLAN: A TELLING SITUATION
Abstract No. 002-0019
Joseph G. Ormsby, Stephen F. Austin State University, Box 9070 SFA Station, Nacogdoches,
TX 75962, [email protected], (936) 468-4103, FAX (936) 468-1600
Joyce M. Hoffman, Stephen F. Austin State University, Box 9070 SFA Station, Nacogdoches,
TX 75962, [email protected], (936) 468-4103, FAX (936) 468-1600
.
Do not consider for special issues
__X__
Consider for IJOPM only
_____
Consider for IJPE only
_____
Consider for both IJOPM and IJPE _____
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A BANK STAFFING PLAN: A TELLING SITUATION
Joseph G. Ormsby, Stephen F. Austin State University
Joyce M. Hoffman, Stephen F. Austin State University
Abstract
The national economy has forced many financial institutions into bankruptcy, others have
significantly downsized while others have merged to avoid bankruptcy. These changes in
financial institution leadership create problems in day to day operations, the focus of this paper.
A small rural bank has been recently acquired by a large financial institution requiring a different
teller staffing arrangement.
This paper investigates customer demand patterns in order to
construct a cost efficient work schedule for tellers who are involved in several different types of
bank transactions throughout the day.
Introduction
Bank X is located in a small rural Texas town and Bank Y is located in a large metropolis
located in a different state. Bank Y has purchased banks in various southern states in an effort to
increase its market share. Bank X has been acquired by Bank Y but an inherent problem with the
acquisition is that Bank X uses a different teller staffing arrangement that currently exists in Bank Y.
Both banks have been in business independent of each other for 101 years and each has been
effective in delivering customer oriented services using different staffing arrangements. The
merged bank has to develop a staffing plan that will be effective for each bank as they strive to
achieve their customer service objectives. A bank typically has various customer service centers.
Customer service representatives sit in the main lobby of the bank and assist customers with dayto-day questions concerning loans, checking accounts, and ATM (automated teller machine)
cards. Tellers also perform duties in the lobby of the bank and have secondary responsibilities
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that could be characterized as customer service. It is very important to have a friendly, selfinitiating, and responsive teller staff to greet people because time is of the essence. While the
teller staff needs to be courteous, they must also maintain a level of efficiency that is conducive
to profitability for the bank. Studies have shown that customer should not have to wait longer
than five minutes for a teller transaction. Additionally, a teller transaction should be completed
within three minutes. Consequently, the balancing act between customer service and efficiency is
very difficult to maintain. In the banking industry, a bank's non-interest expense items are
deemed very important. These expense items include marketing plans and operations that make
the bank efficient. The bank's biggest non-interest expense items are its employees’ salaries and
benefits. A bank is much like a manufacturing plant in that it carries a lot of overhead to handle a
large volume of transactions. At the same time, a bank is similar to a retail store where customer
service and pricing are very important. Therefore, a teller staffing plan must handle customer
volume, effectively evaluate staffing and scheduling, and utilize hours in the day.
Generally, lobby tellers are responsible for the following transactions: night deposits, ATM
processing, ATM envelopes, large commercial walk-in customers, drawer balancing, and
vault/shipments. Additionally, one employee is positioned as a supervisor over the other tellers.
A second area of responsibility for tellers is the motor bank. These tellers assist with drive-thru
customers, and their duties include balancing and handling transactions. With this general
information in mind, Bank X must prepare an analysis illustrating the total time required for
bank tellers to complete transactions, current cost of Bank X's present staffing arrangement,
along with a cost efficient work schedule for the tellers working in the lobby and the motor bank
Ideally, a staffing plan should improve customer service, increase productivity, and improve
flexibility. This research study investigated the customer demand at Bank X in order to construct a cost
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efficient work schedule for tellers involved in different bank transactions throughout the day. As the
result of the research a cost benefit analysis was performed to determine the efficacy of the new staffing
plan. Constraints facing Bank X are the number of transactions completed by each teller, the
time it takes to complete a transaction, the wait time per customer, as well as staff vacations and
sick leave.
Profile of Teller Transactions
Lobby Transactions include customer transactions, such as deposits or withdrawals from an
account, processed by tellers at their workstations and processed through the bank's system. The
volume is measured by total number of transactions processed by the branch and time of day the
transaction took place.
Large Commercial Transactions include commercial customers who bring large cash deposits to the
branch during business hours and wait while there transactions are processed in the lobby. The volume is
measured by the average number of commercial customers with transactions requiring an average
processing time of fifteen minutes per bag.
Night deposits are considered non-customer transactions because they are not face-to-face
processes. Volume is measured by the average number of bags processed with two minutes
allotted per bag.
ATM Processing includes the daily time required to balance one or more ATM machines and to
replenish the supply of cash in the machine. Volume is determined by the number of minutes
needed for balancing and replenishing cash, based on the number of ATMs serviced. Average
time considered is eighteen minutes per ATM machine.
Balancing: includes the time required for tellers to balance cash drawers at the end of a business
day. Industry average for this task is six minutes per person.
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Vault Activity involves the time required to balance the vault each day plus the time required to
prepare and verify cash shipments during the week. Volume is concentrated in the number of
minutes needed for balancing and verifying the cash shipments concerning the average dollars
shipped. Industry benchmark for this activity is 12 minutes per transaction.
Supervision: includes the time that a teller uses to be the administrative authority and perform
supervisory functions. Since teller positions vary during the week, time allotted for this
responsibility should range from four to ten hours per week.
Current Staffing and Workload
Currently, there are twelve full time tellers who each work a total time of 40 hours per week.
Benefits and the hourly rate for a full time teller average $12 per hour. Under ATM processing,
the bank has been notified that two tellers, accompanied by a security guard, should go to each
machine, collect deposits, and replenish cash supply. Also, each teller was responsible for
balancing their own drawer and checking it against the vault teller's calculations. Additionally,
balancing occurred on the workers own time and was not considered in the staffing plan. Tables
1 and 2 below show a daily summary of transactions for Monday-Thursday and Friday. These
data were collected over a one year time span and represent average daily work-loads for
Monday – Thursday and Friday. Friday was separated from the weekly volume report because it
is considered the busiest day of the week.
Table 1 – Volume Summary for Monday-Thursday
ACTIVITIES
Lobby transactions
Large Commercial
8
AM
12
0
9
AM
32
1
10
AM
26
1
11AM
12 PM
36
0
38
2
1
PM
25
1
2
PM
23
0
3
PM
24
1
4
PM
0
0
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5
PM
0
1
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Night Deposit
ATM Processing
Vault
21
3
3
0
2
0
2
0
0
0
2
0
0
0
2
0
3
3
3
0
2
2
PM
47
1
3
PM
44
1
4
PM
42
0
5
PM
32
1
0
4
0
5
3
5
0
3
Table 2 – Volume Summary for Friday
ACTIVITIES
Lobby transactions
Large Commercial
Night Deposit
ATM Processing
Vault
8
AM
15
0
31
3
5
9
AM
38
1
10
AM
42
1
11AM
12 PM
48
1
52
1
1
PM
47
1
0
4
0
4
0
5
3
4
0
5
Required and Available Staffing Hours
Lobby transaction standard is 3 minutes per transaction and an average of 5 minutes of wait time
for a total of 8 min/transaction. By multiplying the number of transactions by the time standard
resulted in the daily amount of time required for lobby transactions.
Large Commercial Transaction standard is 15 minutes per bag. By multiplying the time standard
by the number of Large Commercial transactions resulted in the time required for large
commercial transactions.
Night Deposits require 2 minutes per bag. Multiplying the time standard gives the number of
minutes to complete night deposits and these calculations are presented for both MondayThursday and Friday.
M-TH: 2 minutes x 21 night deposit bags = 42 minutes
Friday: 2 minutes x 31 night deposit bags = 62 minutes
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ATM Processing requires 18 minutes. If 3 machines are processed each time then the total
amount of time required is 3 x 18min/machine or 54 minutes. Since two tellers will be used for
these transactions a total of 108 minutes of the teller time will be required.
Vault Transactions require 12 minutes each.
The number of minutes required for vault
transactions was found by multiplying the number of vault transactions by the time standard.
The weekly time requirements for the days M-TH are given below in Table 3 and the total time
required for Friday is given in Table 4.
Table 3 – Time (min) Required for Monday-Thursday
ACTIVITIES
Lobby transactions
Large Commercial
Night Deposits
ATM Processing
Vault
Total:
8
AM
96
0
42
108
36
282
9AM 10
AM
256
208
15
15
0
24
295
0
24
247
11
AM
288
0
0
0
288
12 PM 1
PM
304
200
30
15
0
24
358
0
0
215
2
PM
184
0
3
PM
192
15
4
PM
0
0
5
PM
0
15
0
24
208
0
36
243
108
36
144
0
24
39
2
PM
376
15
3
PM
352
15
4
PM
336
0
5
PM
256
15
0
48
439
0
60
427
108
60
504
0
36
307
TOTAL
1728
105
42
216
228
2319
Table 4 – Time Required for Friday
ACTIVITIES
Lobby transactions
Large Commercial
Night Deposits
ATM Processing
Vault
Total:
8
AM
120
0
62
108
60
350
9AM 10
AM
304
336
15
15
0
48
367
0
48
399
11
AM
384
15
0
60
459
12 PM 1
PM
416
376
15
15
108
48
587
0
60
451
TOTAL
Available time for a teller can be calculated in the following manner. From bank records, it was
found that the bank works approximately 52 weeks per year. Each teller works 8 hours a day 5
days a week. Each teller has a total of one week paid vacation per year and the bank celebrates
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3256
120
62
324
528
4290
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10 national holidays and each worker has 12 personal days off a year with no more than 3
personal days off on Fridays. Additionally, each teller gets one hour off for lunch each day.
The number of Monday-Thursdays in a year’s time is calculated by the following expression:
(52 weeks/yr x 4 days/wk) - 10 holidays = 198 days. This calculation assumes that most
holidays will occur on Monday – Thursday.
Similarly, the number of Fridays in a year’s time is calculated by the following expression:
(52 weeks/yr x 1 day/wk) = 52 Fridays
The total amount of required time for Monday-Thursday for a year and Fridays for a year are
shown in the following expressions:
198 days x 2, 319 min = 459, 162 min/yr. Teller time (mins) required for M-TH in a year
52 days x 4, 290 min = 223, 080 min/yr. Teller time (mins) required for Friday’s in a year
Available time for one teller on Monday-Thursday is found by the following calculation:
[198 days (see above) – (4 days paid vacation/yr) –9 personal days] x 7.0 hrs/day x 60 min/hr =
[185] x 7.0 hrs/day x 60 min/hr = 77,700 min/yr available time for M-TH for one teller
Likewise, available time for one teller on Fridays is found by the following calculation:
[52 days (see above) – (1 day paid vacation/yr) – 3 personal days] x 7.0 hrs/day x 60 min/hr =
[48] x 7.0 hrs/day x 60 min/hr = 20,160 min/yr available time for Fridays for one teller.
The number of tellers required for M-TH is found by dividing the required hours by the available
hours per teller and rounding up. The calculation for M-TH is 459,162/77,700 = 5.909 rounded
to 6 tellers. The Bank should use six tellers during the day on Monday through Thursday.
Similarly, the number of tellers for Friday is found by the formula 223,080/20,160 = 11.06
rounded to 12. The Bank should use 12 tellers on Friday. A rough check on the calculations is
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to visually inspect the number of required hours on Friday versus any other day of the week.
Notice that the amount of required time is almost twice the amount of time required on Monday
through Thursday.
The cost savings for M-TH is found from the following formula assuming 12 workers currently
work each day.
[(12 tellers/day) x (32 hrs/wk) x ($12/ hr)] – [(6 tellers/day) x (32 hrs/wk) x ($12/hr)] =
[$4,608] – [$2,304] = $2,304 cost savings.
The cost savings for Friday’s will be zero ($0) since the number of tellers required will remain at
12.
Conclusion
This research study demonstrated how a small rural bank modified its teller staffing plans and
significantly reduced it personnel costs without effectively diminishing customer service. If we
take the weekly savings of $2,304 and multiply it by 52 weeks we find that the new staffing plan
will save the organization $119,808 per year. There were some obvious caveats for this research
study. First, the researchers did not assume there would be any required days for teller sickness
beyond the 12 personal days, and that would not necessarily be accurate if one considers a
catastrophic illness for a worker.
However, this must be tempered by the fact that if a
catastrophic illness affected a worker, then the bank would obviously have to hire a temporary
worker to fill in until the stricken worker returned to the bank. Additionally, it was assumed that
the banks legal holidays did not fall on Friday, which is feasible for most of the time. However,
when a legal holiday falls on Friday, it may be necessary to adjust down the number of
employees required on Fridays.
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