Cutting Back-Office Staff the Right Way

avatar

The Problem: Mortgage processing (origination and servicing), credit card approvals, insurance claims processing and government program management are operating groups that are in serious need of re-engineering. These groups are overstaffed, underperform, lack basic controls and oversight, and management is often clueless about what is happening in the department and why. Sure, it’s easy to blame the line manager who works in the trenches and is closest to the work, but since the entire system is broken, it’s clear that change has to come from the top.

What Not to Do: The news is filled with stories about banks and other financial services organizations laying off hundreds and sometimes thousands of employees, and migrating back-office work to India or other offshore locations without first fixing the underlying issues. This is what should not be done. Throwing low-cost resources at a serious problem and then looking the other way has repeatedly failed and will continue to fail. This approach typically further undermines the performance of the back-office function and diminishes service quality, negatively affecting the customer experience.

The Answer: The right approach is to analyze the operating area and all aspects of each work effort/product in order to break it down into its lowest level tasks. The idea is to perform a workflow analysis of each process, and to understand all tasks and output. Once this is accomplished, goals should be established and key performance indicators (KPIs) identified to measure each task. At the same time, a formal control and oversight tool should be implemented to track every activity and task performed in the department – even if it happens in a home office or other remote location. What this means is that cleaning up back-office messes requires significant investments in workflow automation, work allocation, quality control, performance management and workforce management systems and applications. These new solutions need to be supported by back-office process automation experts with proven vertical expertise.

It really is possible to make major staff reductions while improving quality and customer satisfaction. But this can only be accomplished with the right tools and expertise to get the job done. The answer is not to throw labor-intensive back-office processes over the transom to some offshore location and hope that things magically get better.