Teller Staffing and Scheduling: Getting The Best Return

By Rob Keene
Senior Consultant

The goal in teller workforce management is always to achieve the highest possible quality of service at the lowest possible cost. Getting the best return requires the implementation of certain workforce management practices: (1) determine transaction processing standards; (2) forecast; (3) schedule and enforce schedule adherence; and (4) optimize productivity.

Transaction processing standards determine the length of time tellers should need to meet customer demand. A basic rule in workforce management is that you can only control what you can measure and the degree of control is directly related to the quality of the measurement system. Every teller transaction has three phases—“start,” where the customer is greeted and the transaction type is determined; “change,” where the majority of the transaction is performed; and “stop,” where the final steps occur and the customer goes on their way.

Many banks take these steps lightly, accepting industry standards as their own or developing proprietary standards through observation. Fallacy lies in both methods, as industry standards do not represent the reality of individual banks and observed standards reflect only what is happening rather than what should be happening. It’s better to use engineered standards that measure the precise practices of the organization and the time that should be allotted to complete the steps. Engineered standards frequently improve measures by as much as 30%, bringing reality back into the equation. In one conservative estimate, engineered standards were shown to reduce staffing cost by 12%–15%.

Forecasting teller transactions can be easily accomplished by using historical data and examining arrival patterns. The arrival pattern of transactions does not vary significantly from day to day, and plotting the number of transactions by time of day will usually reveal a common pattern. Weekday and weekend patterns should be analyzed separately. Once established, patterns can be used to consistently distribute your forecasted volumes throughout the teller operation hours so that breaks and non-teller work can be scheduled at times when there is excess capacity.

Scheduling tellers requires some additional tools, typically Erlang-based calculations that accurately determine the number of tellers you need at each interval of the day based on your forecast and service variables (such as service level target, the time you expect the average transaction to take, and the level of adherence to the schedule being achieved). Schedule adherence must be emphasized and measured to ensure that service does not deteriorate. The most accurate schedule will yield terrible service levels if the tellers are not in their places doing transactions at the scheduled time.

Productivity, defined as the time tellers are occupied with transactions, is one of the most misunderstood variables in workforce management and one of the most costly if mismanaged. Organizations that understand the significant cost associated with achievement of little or no customer wait time are those that understand how to manage productivity effectively. For example, transactions completed at an 80% service level (80% of transactions begun within a targeted wait time) will cost almost 11% less than transactions completed at a 95% service level. The difference in transaction cost is due to the additional staff needed to ensure that transactions are begun within the targeted wait time 15% more often. Keep in mind that in this example, meeting a higher service level causes teller productivity to drop significantly: it is important to realize the tradeoffs between too-high and too-low productivity levels. Generally, if tellers are occupied more than 70% of the time by transactions, service levels suffer. If occupied less than 60% of the time, cost is too high. A productivity rate in the low- to mid-60% range—where customers have to wait a short time but only occasionally—is ideal.

The value proposition of effective teller staffing is better service at lower cost. Banks that develop and use proprietary teller transaction processing standards generate accurate volume forecasts from historical data, schedule their tellers, make sure their tellers follow the schedule, and have a realistic sense of the service level they wish to achieve. In return, they experience shorter wait times, faster transactions, and lower teller transaction cost.