Commentary: TSB's striking example of clumsiness

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The Independent Online
The looming prospect of strike action tomorrow throughout the TSB branch network over threatened job losses reflects just how badly the bank has handled a challenge facing the entire banking industry.

TSB is not the only bank to be cutting jobs in the face of recession and the need to modernise. Far from it. Where it is unique is in having contrived to alienate a sober and non-militant workforce to the point where the UK is facing its most serious banking strike in years.

Modernisation of British banking is not in itself a cause for concern. Too many gloomy, old-fashioned banking halls that deter good service still crowd the high streets. Such changes are necessary if UK banks are to stay competitive on their home turf now that the single market is open for business.

This process has a cost. Bifu, the banking, insurance and finance union, estimates that 75,000 jobs have been lost in the banking sector since 1990 and a further 25,000 are under immediate threat.

All of the main clearing banks and many of the big building societies are gradually automating more of their functions, which in practice means replacing people with technology. The process started in the 1980s, when bank lending business was robust, and spread to most banks this decade. Because the financial services industry was expanding more rapidly than any other sector during the late 1980s boom, the impact of new technology in banking acted as a brake on the rapid creation of bank jobs.

But the recession has combined with continued bank automation to accelerate staff cuts.

The problem is the way some banks are managing the change. Technology inevitably means jobs will go, but many banks have successfully handled thousands of job losses without compulsory redundancies or union uproar.

Cutting jobs is always unpleasant, but it is compulsory redundancies that make the unions see red. TSB faces strike action because, in its plan to slash 1,000 jobs over four weeks, it will not rule out compulsory redundancies.

NatWest has earned the nickname 'NatWorst' from Bifu because the union calculates that it sacked around 1,000 employees in mid-1992.

Noel Howell, of Bifu, is not sticking a rosette on any bank for its handling of job losses, but not all banks have inspired the union's wrath either. Good long-term planning and management of job losses through early retirement, voluntary redundancy programmes and retraining are the most humane way to deal with a necessary stage in the evolution of British banks.

Anything else smacks of desperation or plain bad management.