Society staff levels resist the recession

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The Independent Online
BUILDING society employees are riding out the recession largely unscathed, despite tumbling profits and the collapse of new mortgage business.

The recent decision by the Britannia building society to close 10 branches and axe 150 jobs has led to fears that a big shake-out of staff might be on the way.

However, figures tucked away in the latest annual report of the Building Societies Commission reveal that in the past two years societies have significantly boosted the number of people they employ.

Societies took on an extra 2,743 employees last year to raise staff levels to 63,997 - 5 per cent up on 1990 - while the number of part-time staff held steady at around 15,000.

Staff numbers are now higher than in the boom year of 1988, even though the number of new advances has dropped from more than 2 million to around 1.5 million.

Adrian Coles, a spokesman for the Building Societies Association, said he thought more staff were needed for the higher levels of training, personnel management and treasury operations now required of societies. 'And higher arrears and repossessions also require more staff.'

But Tim Melville Ross, chief executive of Nationwide building society, said he found the increase 'baffling'. He said he would have expected increased staff demands from such areas to be met from continuing rationalisation elsewhere, adding that this had been the case at Nationwide.

Mergers have cut the number of societies by almost half in the past 10 years, to 110, and up to one in five are likely to disappear by 2000, according to a poll commissioned by Mortgage Finance Gazette.

The number of branches is also falling, moving from a peak of 6,962 in 1987 to 5,921 in 1991. But it appears that many staff involved in branch closures have been relocated rather than made redundant.

Staff costs are also rising. With only four exceptions - Halifax, National & Provincial, Birmingham Midshires and Coventry - management expenses at the top 20 societies outstripped inflation in 1991.

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