Restructuring woes felt by employees

This is a real-life scenario for many Canadian bankers, according to those polled in Investment Executive’s third annual Bankers’ Report Card. Employees say they get nothing in return for their long hours — except maybe stressed out. And stress is forcing a growing numbers of bankers to take time off work. “It’s all work-related,” says a Canadian Imperial Bank of Commerce banker. “I know three people off on stress leave. The stress levels are astronomical.”

In the banking environment of the 21st century, stress is an constant visitor. Mergers and merger talks, major restructurings and branch closings — 200 branches from the Big Five closed in 1999 and another 500 will close in the next few months — are taking their toll. Employees are working extra hard to make up for those who have been laid off or quit. Those still employed are wondering if they will continue to be employed. Stress is rampant. Bankers may be doing their best to cope, but it’s not easy.

CIBC is one bank in the forefront of change. It is undergoing major restructuring, including revamping its internal staffing structure.

Just a few years ago, the branch manager had authority over the entire branch. But now, CIBC says, the nature of banking has changed and the branch manager wears too many hats to handle the job effectively. So CIBC has divided its branches into three departments — convenience channel, high-value retail and high-value small business — each with its own manager. The departments run separately, although they all operate out of common branches.

It’s taking CIBC time to redefine the roles of its employees. “[The major restructuring] knocked us on our butt,” says one CIBC employee. “The clients and the employees got lost in the shuffle.”

Some senior CIBC employees were offered packages that included two years’ severance pay, benefits and pension. Those who remain are now dealing with the shifting environment.

CIBC says the restructuring was needed to become more competitive in the market. “It really is a great restructuring program but people don’t take well to change,” says Glenda Smith, CIBC client service manager for independent business for the Northern Lakes District in Ontario. “People who are long-term have the toughest time. Managers are saying, ‘Get down to business, get your job done.’ Employees are not dealing well with the new request.”

While Smith has worked for CIBC for 18 years and not taken stress leave, she says, employees who have been with the bank for more than 15 years are more likely to apply for medical leave because of stress.

In Timmins and the surrounding area, where Smith works, some vacant positions remain unfilled for months. “No qualified people apply to come here. Who from Toronto, Ottawa or London wants to pack up their families and come north with the same sales targets?” she asks. She describes the area as “isolated” and offering little chance of advancement.

The employees who are there are forced to fill the gaps left by missing staff. Some employees are working as many as 60 hours a week picking up the slack. Branches are short-staffed and Smith says there is little chance of hiring new people.

“CIBC won’t help in terms of adding people. The end result is the bank isn’t going to give us any more money in that area,” she says.

The expectations are higher now. The new leaders are compliance- and sales-oriented, explains Smith. Employees are being pushed to the maximum as sales targets have become more aggressive. “We’re numbers-driven, we’re revenue-driven and that’s the sad part of it. It’s the nature of the business,” one banker says.

Add to this the employees’ requirement to answer the telephone, meet and greet customers, process day-to-day banking transactions and work with clients who have scheduled appointments. The multi-tasked employee is all tasked out. “Somebody needs to say, ‘Whoa, you have a life as well’,” says a banker.

And so employees approach their bosses with doctor’s notes suggesting they need time off because of workplace stress.

CIBC hires outside counsellors to work with distressed employees and supervisors in a program called Return to Work. The program helps answer questions about employee issues at CIBC and what can be done to get them back to work. “The facilitators help employees come to grips with what’s happening [at CIBC],” Smith says.

What is happening remains to be played out. In Finance Minister Paul Martin’s June 13 financial services legislation he calls for increased competition in the industry. This means credit unions can restructure and gain national presence; new banks can be formed under certain conditions; foreign bank branches will be allowed to expand; and the potential for bank mergers will be greater. The proposed legislation says consumers will be “guaranteed a process to adjust to branch closures.”

And branch closures there will be. According to one Bank of Nova Scotia employee, 20 to 30 of that bank’s branches will close by the end of the year. “All of the banks are under enormous pressure to cut costs,” says the banker.

There have been systematic branch closures in the past couple of years, since Scotiabank acquired both Montreal Trust and National Trust. Employees have been shuffled around as branches moved and closed. Many employees from the bank and trust companies left during the mergers. Some of the remaining branches still run on leaner staff.

But stress as it relates to job losses is lower at Scotiabank because of the bank’s “no layoff” policy. Vacancies in Scotiabank’s lean-running branches will soon get some of the surplus from branches slated for closure.

Shelley Jourard, Scotiabank’s senior manager of public affairs in Toronto, says that the employment security policy states that an employee with the bank will not lose his or her job due to technological changes or other cost-cutting programs. But these programs do not include branch closures. Jourard says the method of staffing at Scotiabank is the real reason layoffs have been kept at bay. “When the economy is booming, we don’t tend to increase staff. So if the economy is down, we don’t need to lay off people,” she says.

But that doesn’t mean it’s stress-free at the bank. Banks are moving into a sales environment and, as one Scotiabank employee describes it, “It is ‘sell or die’.”