How do human resource strategies help Wells Fargo?
In this part of the series, we’ll look at human resource level strategies. These strategies are usually the most neglected part of any analysis. Human resources relate to the employees’ interaction with the bank. Employees implement strategies. They take any organization towards its goals. This is even more true in a highly services-centric organization like a bank.
This also helps the bank in one of its most significant competitive advantages—cross-selling. In the above chart, the top part indicates the average number of years that different categories of employees have stayed with the bank. Most of the customers forge strong relationships with these employees. They stay with the bank longer. This means customers buy more products with the bank. More products mean more revenues for Wells Fargo—the bottom part of the graph.
Wells Fargo (WFC) believes that people are a competitive advantage source. Wells Fargo wants to position itself as a great place to work. It wants to be an employer of choice. It’s a company that really cares about its employees. Wells Fargo is a place where teamwork is valued and rewarded. It knows the value that a diverse work force can bring. Wells Fargo encourages innovation—new and better ways of serving customers.
Integrating sound human resource practices lies at the core of Wells Fargo’s strategy. Wells Fargo is the only big bank that considers this part important enough to make it available.
The data on human resources and its relation to strategy for other large banks—like JP Morgan (JPM), Bank of America (BAC), and Citigroup (C)—isn’t widely available. These banks are all part of the Financial Select Sector SPDR (XLF).
In analysis, important parts—like a company’s human resource practices—are sometimes overlooked. In the long run, these details matter the most.
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