According to 2006 BAI Retail Delivery Conference presenter Gerald Baker, chief operating officer of Memphis-based First Horizon Corporation, employees should be first on the list of stakeholders.

Baker observed that banks traditionally put their shareholders’ interests first, followed by that of customers, communities and, lastly, employees.  But the interests of each of those groups could be served better if the order is reversed, Baker stated.  His presentation was entitled “Employee Value=Company Value.”

“If you put your employees first, you can better serve your customers and the communities in which you have markets. And in the end, you will increase the profitability of your customers and satisfy your shareholders,” Baker said.

Baker said First Horizon research in 1992 showed that the bank’s most profitable branches were those where the employees had the longest tenure. Those branches also had the highest customer retention, he said.

Further surveys conducted by First Horizon showed that when customers were asked what they valued most in a bank, 34% cited the bank’s employees and 32% the bank’s image, both of which are related to employee quality. Only 12% said products were most important, with 11% citing convenience and 11% prices.

“It’s hard to compete in banking on price and brand, but you can compete on the quality of the advice and service you give to your customers. And if your employees are satisfied in their jobs, they keep the customers satisfied,” Baker said.

One way to help keep employees satisfied is to provide flexible working hours, as long as those can fit within the requirements of the job, Baker said. “Balancing the needs of the family and the job is a major concern for most of our employees and we try to help them handle that balance,” he said.

Other measures to boost employee satisfaction include proper training and keeping decision-making close to the community level, which helps make employees feel that what they are doing is important, Baker said. First Horizon, in fact, encourages employees to become involved in community events, he added. The bank will match employee financial contributions to local organizations and it tries to give employees time off to attend community activities, whenever possible.

First Horizon conducts quarterly employee surveys where it attempts to measure employee satisfaction and take corrective action if necessary, Baker said. As evidence that its efforts have paid off, Baker noted that the company has been named one of the best places to work by leading magazines such as Fortune, Forbes and Working Mother.