30 October 2014

Gary Wright

Gary Wright - BISS Research

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Banking yoyo

19 March 2009  |  1872 views  |  1

Over the last few months we have all been aware of a number of different banks sacking people to reduce overheads but as they are actually unable to do without many of them, I have found that in a number of cases they have then rehired the same people on temporary contracts but at an increased cost. The "lucky staff" as some might say, are of course amazed to receive generous redundancy packages only to be directed to apply for the exact same role in a temporary capacity.

The reason given for redundancy is of course cost cutting but having paid for the privilege of getting the individual off their fixed costs they have substantially increased their variable costs. From the shareholders point of view the banks costs have increased although the fixed headcount is reduced.

What is the point of banks going through this process of imaging cost reductions through redundancy of people that they simply can not afford to lose? This is yet another instance of Banks treating their investors and customers and staff with disdain. I hope that the yoyo policy I have unearthed is not industry wide but I would not put my money on it! The banks appear to be living in another world being hardly contrite in their role in the financial crisis and seemingly oblivious to the mood of the consumer.

The banks need to rebuild the confidence of their customers and this has to be a long term objective and will not be achieved overnight. Good business practice and a highly ethical approach to carrying out their customer services must be allied to a willingness to accept their faults and their role in causing the current financial crisis. Blindness by banks to not accept what they did wrong does not auger well for a swift return to normality. Certainly massaging supposedly cost cutting which is in fact raising costs is not a good start and indicates that banks are still living in cloud cuckoo land!      

Comments: (1)

A Finextra member | 20 March, 2009, 17:12

Gary,

Take a look at the (U.K. Daily Telegraph) Alex cartoon from May 7th 2008.....

....seems he's also figured this out - to his (of course!) benefit.

Go to: http://www.telegraph.co.uk/finance/alex/?cartoon=2789535&cc=3520369 - Enjoy!

Kevin.

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name

Gary Wright

job title

Analyst

company name

BISS Research

member since

2007

location

London

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CEO of B.I.S.S. Research, founder of the BISS Independent Accreditation for all systems and servi...

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