How to Reduce High Turnover Rate Through Better Onboarding in the Financial Industry
That vacant chair is a drain on your operational efficiency. And you’re doing everything possible to get the position filled quickly. You’ve blocked off hours on your work calendar (time that you could’ve spent on deeper work), spent money on ads, and let this staffing issue take up some mental space as well. All that work is worth it … but only if you can keep the right people at your company.
Unfortunately, however, high turnover rates abound in the financial space both for new employees and even seasoned ones. All that hard work in finding the right person might have been wasted if you have to go through the whole process again soon.
Sound like a familiar problem?
“20% of turnover happens within the first 45 days”
The Real Cost of a Vacant Chair
The first challenge for financial institutions is to keep the new staff members for the entire onboarding process. After all, 20% of turnover happens within the first 45 days, according to a Harvard Business Review’s study. That means people are bailing out before they even finish onboarding!
Even if the new employee stays with you for a year, that’s not guarantee of workplace longevity: 30% of the total U.S. workforce changes jobs every 12 months, according to a recent Landbase 2026 article.
“Not a problem,” you may think. “I’ll just hire a new person, one who will stay.” For a COO or a CAO, this goes beyond a staffing headache. It directly affects operational efficiency and risk mitigation.
Then you’ll have to dig deep into your company pockets: “According to SHRM, replacing an employee typically costs between six to nine months of that person’s salary.” If you have a seasoned employee, you also lose that person’s institutional knowledge and risk burning out the team members left behind who have to pick up the slack until the vacant chair is filled.
What That Vacant Chair Costs You
-
6 to 9 months of the employee’s salary
-
Valuable time finding a new employee
-
Risk burning out existing employees with added workload
-
Peace of mind for yourself and your team
The Psychology of Attrition: Why People Quit Their Jobs
Why is the financial workforce so volatile? Could it be because of pay? Not necessarily. Yes, pay and benefits matter (no one’s working for free!). However, what’s primarily driving attrition is burnout.
Burnout
“More than half of US employees (55%) are currently experiencing burnout, with fully remote workers reporting the highest rates at 61%,” according to Worktime.
“Burnout costs employers $3,000 to $20,683 per employee per year, with 89% of that cost coming from presenteeism, not absenteeism, [according to] the American Journal of Preventive Medicine.”
Understaffing
That burnout is often the result of understaffing. After all, if so many people are leaving, their tasks and responsibilities will then fall upon the workers who stay. Unfair? Absolutely. This churn creates a bitter cycle that leads to the burnout of workers left behind … who then leave … who then burn out the people left behind …
In other words, this churn can become a frustrating cycle. “Among [employees] who experience burnout due to staff shortages, 84% said the impact is covering the workload for unfilled positions,” according to Eagle Hill Consulting.
What can be done to stop the revolving door of employees?
Ditch the Dinosaur: Why Traditional Training Fails
When employees feel empowered, confident in their abilities and knowledge, they tend to stay put and do better work. “Businesses with high engagement are 23% more profitable and 14% more productive,” according to one Gallup employment engagement study.
That empowerment means employees need to be trained easily and in ways that ditch the “dinosaur” LMS.
Your legacy LMS bores people
The old way of learning doesn’t work anymore. (If it ever worked well.) Employees forget 70% of training within 24 hours and 90% within a week without reinforcement, according to the principles of the Ebbinghaus forgetting curve.
Despite the availability of dynamic tools, most financial institutions stay in the days of the dinosaur. They rely on passive content consumption rather than active, practice-based learning. So much training ends up being as dull as the latest “Jurassic Park” movie.
If you’ve ever had to sit through a legacy training video or read through a fat binder of yellowing pages to learn something, you probably remembered very little of what was taught. Despite all the visual and dynamic content available, however, most financial institutions stay in the days of the dinosaur with their LMSes.
Does this look familiar?
Drowning in information overload
Another challenge from using a dinosaur of an LMS is that employees get cognitive overload. In other words, there’s too much information shared without enough time to process the information. (Remember cramming for a test at university?)
When financial institutions use a legacy LMS for onboarding, the new hire struggles to retain the deluge of info. They get anxious and overwhelmed quickly (all while also feeling bored). And when banks undergo a core conversion or a new software rollout, existing staff members can feel like they’re drowning in information.
Instead of creating “digital advisors,” these outdated tools create “order takers,” who lack confidence.
The Need for a Better Learning Management System
What’s a financial institution to do? You still need to train your employees on:
data security protocols
systems
regulatory compliance
product and program knowledge
mobile banking
troubleshooting
proper device management
customer service
sales
managing irate customers
fraud detection
The solution is to ditch the dinosaur and use a more vibrant, engaging learning framework. But first, you need to know what you’ll teach and at what intervals.
120-Day Strategic Onboarding Framework
Let’s tackle the onboarding process in achievable, engaging steps for the employee. This solution is a framework that prioritizes “no downtime training” and AI-powered knowledge access.
Here’s a look at one approach.
Preparation (Day that offer was made to Day 1)
Reduce new hire anxiety by early cultural immersion and technical readiness. For example, the hiring manager can send a welcome email to the new hire before the person shows up. Or the team members can send little introductions of themselves to the new hire. Technical readiness means you can send the new hire some tips and tricks of the tech that they will use at work.Phase 1 (Days 1-30)
Focus on building confidence over mere competence. You want the new hire to learn but also feel they can put into action what they have learned. With Lemonade’s LLXP Learn, for example, you can combine gamification and micro-learning to drive 84% voluntary participation from day one.Phase 2 (Days 31-60)
Introduce “just-in-time learning” and realistic simulations using BankerCoach to roleplay real-world customer interactions. Turn those order takers into digital advisors through scalable AI.Phase 3 (Days 61-90)
Move your new hire to full productivity and conversations about their career path at your financial institution.Phase 4 (90+ days)
This phase should provide ongoing enablement. You’ll want the new hire to adopt a spirit of continuous learning (without feeling overwhelmed).
LemonadeLXP can help you onboard and train your staff easily. LLXP Learn helps institutions combine gamification with videos to boost engagement (and retain that information). Also, use LemonadeLXP’s Insight AI to provide instant cited answers in the flow of work to reduce staff stress. You can automatically generate and update training materials from your internal docs.
How to Measure Whether Your New Onboarding Is Working
“Confidence is the leading indicator of retention, acting as a proactive measure of future employee or customer loyalty,” according to the Eagle Hill Consulting Employee Retention Index 2026.
You can see the positive effects of your new, more dynamic onboarding process by the slowing down of the revolving door.
Proof of Retention
To see how a solid framework and LemonadeLXP help, check out these success stories:
BNC National Bank: Turning staff into "Lemonade junkies" and creating a "learning organization" in under six months.
WyHy Credit Union: Cutting time-to-competency by 50%.
The Final Squeeze
Though the revolving door of employees might seem standard to the financial industry, you don’t have to accept it for your institution. By using a strategic framework and LemonadeLXP’s modern, active products, you can put an end to the revolving door issue. Book a demo now to find out how.
