Many bank staff are finding sales performance targets unrealistic and stress inducing, according to a new paper produced by the union representing banking workers.
In a paper titled: Women and work in the New Zealand banking industry: Targets and debt following the crisis, strategic adviser for the FIRST Union Edward Miller said many of the union's 4000 members (out of 50,000 workers in the finance and insurance industry) had relayed the "rapid increase" of performance targets in the past 5-10 years.
"They have reached a point where they are commonly considered unrealistic by staff," he said.
"The pressure on staff has become stress-inducing, as not reaching targets can result in performance management plans, disciplinary hearings, and ultimately dismissal.
"Not reaching these targets has become the primary cause of employment insecurity in the banking sector, as continuity of employment become less assured."
Yesterday the union said the big bank chief executives were making "massive salaries" on the back of a "terror regime" in operation at the banks.
Kirk Hope the chief executive of the banking industry body NZ Bankers’ Association said in response that the union’s claims "undermine the great work that frontline staff do in engaging with customers".
"Banks rate more highly than any other service industry when it comes to customer satisfaction. A Consumer NZ survey in August found overall customer satisfaction of 89% for the nine retail banks included in the survey. These high ratings are based on good front line staff working well with their customers.
"Rather than selling unwanted financial products, front line bank staff are encouraged to have conversations with customers about their individual circumstances and needs, and whether there are suitable bank products that can meet those needs.
"During the global financial crisis, banks in the UK, for example, which had heavy sales-based cultures, ended up failing and being bailed out by the taxpayer. Thousands of bank workers lost their jobs. That’s not what happened in New Zealand. Instead our strong and stable banking sector continued to support New Zealand households, and businesses and their own employees over the global financial crisis.
"Banks make a huge and ongoing contribution to the economy, spending $6 billion every year just running their businesses here. That includes employing 26,000 people and paying businesses in New Zealand that supply goods and services to the banks," Hope said.
Miller's paper, presented at a seminar in Auckland today, examined gender inequity in the post global financial crisis banking environment.
The paper said that FIRST Union undertakes quarterly forums for its three major banks (ANZ, BNZ and Westpac) detailing the concerns of members in their branches.
Prior to the forums union organisers and delegates meet with workers to discuss issues, and a wide cross-section of these viewpoints are canvassed.
"The results were startling. While there are some differences, workers’ concerns displayed a remarkable uniformity, with the main issue in all banks being the targets workers had to achieve. Respondents characterised the targets as ‘strict’ ‘unrealistic’ or ‘unachievable’. Pressure to achieve these was variously described ‘huge’, ‘150%’, and some staff noted they were doing unpaid overtime to reach targets."
Miller said that some respondents linked the stress of failure to job insecurity, with one respondent commenting ‘I’m actually concerned that I won’t have a job in Dec’.
"Stress was ‘de-motivating’ ‘demoralising’ and affected self-esteem. Some respondents also linked stress to sickness, panic attacks and depression.
"Many noted how the stress was undermining relationships – between bank staff, with management, and with customers. A worker commented that ‘Staff are being treated like machines’. Another noted that workplace morale was ‘shocking’, commenting ‘If you asked me if I had a friend here I would say “Hell no”.’ Some staff noted they hadn’t filled in identifying details for fear of information getting to management. Respondents felt they were not satisfying the customers’ interests and that selling was not ‘need-based’, noting that customers were being ‘harassed’, ‘creating a bad image’ and a feeling ‘that the bank does not care."
The paper also included results of a subsequent online survey conducted of female bank workers, to which 55 responded, although the union said more wanted to take part but were concerned about being censured by managers.
Of those responding 84.3% said they did not feel sales targets were realistic, while only 34% said they had targets that they regularly reached.
"Respondents were also asked about whether ever they felt stress over targets. 22% responded that they ‘sometimes’ feel stress over targets, 30% ‘often’, and a remarkable 46% responded that they feel stressed over targets ‘all the time’. One respondent noted the high incidence of anti-depressant usage amongst staff," Miller said.
"A third (33.33%) of all respondents with targets said that they had been disciplined as a result of not reaching targets, with 12.96% being disciplined more than once. A further 48.15% said that while they had not been disciplined, they still felt under scrutiny over their targets. 43.4% of respondents said their employer had publicly embarrassed or demeaned workers for not reaching targets (37.74% answered ‘Yes, occasionally or sometimes’ and 5.66% ‘all the time’), and a further 22.64% said that while they hadn’t been embarrassed or demeaned they ‘had reason to believe they might’."
In his paper Miller raised the possibility that current working conditions for banking staff might have ramifications for future financial stability.
"In New Zealand wealth inequality has hardly been discussed in the context of financial instability," he said.
Growing rate of borrowing
"As a result, post-crisis financial reforms have failed to slow the rate of borrowing in New Zealand, and household-debt to income ratios are again trending upwards.
"On the back of this trend, New Zealand’s foreign owned banking system has returned to profitability, and the New Zealand industry is increasingly forming part of the low-cost solution to an Pacific-wide banking complex. Downward pressure on wages across the board fuels the expansion of that complex while imperilling financial stability.
"The majority women workforce sits at the heart of this interaction, and as this study shows, clearly feel uncomfortable with it.
"Over four-fifth of surveyed workers with targets felt they were unrealistic, the vast majority experienced some degree of stress, and a third of workers had been disciplined for failure to reach targets."
Miller said the voices of these staff were "critical" and indicated that the ability of these banks’ clientele to take on more debt is waning.
Miller's report referred to an IMF working paper produced earlier this year. He said recent stress tests concluded that the banking system could withstand shocks to either mortgage or corporate lending, but that linked and sizeable combined shocks could have a much greater impact.
"This must serve as a wake-up call, and we propose that enhancing stability must start at the most basic level – the conditions of workers themselves.
"The voices of these workers must be seen as 'canaries in the mine' for financial stability."
Miller said that at the point that workers'' sales targets seem unrealistic and stress becomes a widespread everyday occurrence "the drive to maintain and improve profitability has clearly gone too far".
"And, now that the reliance of the Australian economy on resource exports is looking increasingly precarious we cannot rely on our Australian-owned banking system to be immune from global shocks. To avoid the next crisis, we must listen to the voices of those who would be affected by it, before it is too late."
Story was updated to include comments from the NZ Bankers' Association