How to Shift From L&D as a Cost Center to a Profit Center
For most financial institutions, L&D is a necessary cost and not much more beyond that. Everything related to it, such as onboarding and new tech rollouts, seems to require large amounts of money or time. Here’s a bag of money for compliance training! Here’s a hefty payment for an online instructor on the latest features!
Rare is the executive who thinks of L&D as a place where more money can be made or, at least, saved.
A shift in approach to L&D, however, can make a positive difference to your financial institution’s bottom line. It’s a matter of mindset and revisiting those leaky and rusty programs and processes for ideas of where to save money.
Onboarding bottlenecks are thieves of both time and money
Every time a new teller or representative is hired, that person participates in an onboarding process. However, the type of onboarding process makes a huge difference. Are you making the poor new employee sit through a video that makes the window in the washing machine look exciting? Are you asking this new person to seemingly endlessly scroll through a folder of lackluster PDFs?
The issue and financial hit that takes place is often due to an old-fashioned, almost archaic, way of approaching onboarding. Speed-to-competency is then more like a crawl-to-competency.
“Within one hour of a traditional lecture or training video, people forget 50% of the information,” according to research by Dr. Kohn. “Within 24 hours, they forget 70%, and within a week, 90% is gone.”
When the new-hire is shadowing another employee or slogging through a behemoth of a manual, that costs FIs (financial institutions) and credit companies a significant amount of money.
Gamified micro-learning gives you your time back
Moving away from those “dinosaur” forms of onboarding can shorten the time for a new hire to achieve enough know-how to get to work and drastically lower the operational cost per hire.
People tend to learn in bite-size pieces, and with gamified micro-learning, they get to stay engaged at a reasonable clip without any operational cost. Your staff will be able to master complex financial concepts in just a few minutes a day rather than one long, draining week or longer.
How Financial Institutions Can Cut L&D Costs
-
Adopt gamified simulations for your FI. Reduces time in training and costs of physical environment.
-
Move toward micro-learning. Less time in paying for instructor-led training and wasted time in long sessions
-
Use adaptive learning. No wasted time training employees on what they already know and help expand their knowledge
-
Use AI tools for creating scripts and quizzes to help with instruction. Cut back on the cost and time of design time.
Lack of formal training drains your budget
“The average worker spends up to 19% of their workweek just searching for the information they need to do their job,” ”
When FIs and credit unions approach training as something to be done hastily or passively, the financial price tag of training doesn’t stop with the first attempt. If the training is done fast, you’ll have to cough up money for the next pass.
For example, staff members may cram for a compliance quiz … then promptly forget everything after they take the quiz. The hidden cost is paying for additional retraining. Or the lack of confidence in these frontline staff members means they take longer to find answers, aren’t sure of what they come up with, and end up costing time and money.
Plus, you risk frontline staff being so annoyed with having to retrain that they will walk out the door. Turnover is a very real problem in the financial sector.
Digital adoption means frontline staff make tech part of their everyday
Frontline staff, who have been taught through an LXP, such as LemonadeLXP, have real-world experience in handling whatever the workday throws at them. They can navigate tricky situations with demanding customers, quickly give the right answers to complex questions, and provide intentional and exceptional customer service.
Compliance can be so boring that it can cost you (literally)
The inescapable fact of the finance industry is that compliance regulations must be followed. And so, banks will get it done but usually in a feet-dragging, uninspired ploughing through materials. The cost for this approach means retraining employees who fail and the actual cost of regulatory penalties.
Game-based simulations keep staff focused
Gamified learning environments deliver 11% higher conceptual knowledge, 14% higher procedural knowledge, and a 9% increase in retention compared to traditional methods, according to research from the University of Colorado, Denver.
According to Data Intelo research, “the average corporate employee requires 40+ hours of annual retraining to maintain skill currency in technology, finance, and healthcare sectors, creating massive demand for efficient, engaging learning delivery mechanisms.
“Gamification reduces training completion times by 23-35% compared to traditional e-learning formats while improving knowledge retention by 28-42%.”
That is a direct measurable return for learning investments, especially for banks.
Turnover costs are like vampires
Losing a frontline staffer will drain your L&D department. According to the Crowe LLP Bank Compensation and Benefits Survey, the annual turnover rate for frontline staffers is between 28% to 55%.
With that high turnover, the cost for training the replacements can add up quickly. And that’s after the cost of hiring folks to replace the old ones.
However, this issue is fixable. At least, you can lessen the amount of turnovers your financial center has.
Greater staff engagement is a balm on the turnover wound
Everyone likes to play, and training that feels like play is one way to keep your frontline staff engaged.
“78% of employees say that gamification in the workplace makes them more productive, and 83% feel more motivated,” according to a TalentLMS corporate survey. “When employees feel competent, their imposter syndrome drops and their longevity increases.”
The Squeeze
Stop viewing L&D as a place where money just pours out in wasteful spending and annoying have-to-do’s. When you consider the places where you are spending unnecessarily, you can begin forming a plan for tackling the wasted time and boosting your ROI spending. Sound unachievable? It’s not. Book a demo now to see how LemonadeLXP can help you turn your L&D center into a profit center for your bank or financial institute.
