With the recession waning, your most valued employees could get lured away.
As the economy gradually improves and hiring plans slowly rebound, credit unions are trying to envision what life after the recession might look like.
One strategy many credit unions are embracing is to become much more intentional about retaining top talent and employees with essential skills.
Credit unions also are rethinking their front-line staffing strategies to meet members’ changing preferences.
Historically, staff turnover among credit unions has been low compared with other industries, says Beth Soltis, CUNA’s senior research analyst. Currently, the overall turnover rate for 2012 is 10% among credit unions with more than $1 million in assets, according to CUNA’s 2012-2013 Credit Union Turnover and Staffing Survey. The rate was about 15% before the recession.
Even at credit unions, however, Soltis says turnover is likely to increase as more employers accelerate their hiring plans in 2013. “Studies show many employees are waiting for more job opportunities to become available to seek other employment,” she says.
The turnover rate among senior managers is expected to increase.
“Executives are in high demand right now,” says Soltis. “With a current lack of management expertise in the job market, it’s taking a long time to fill executive positions. This is leading some companies to actively lure qualified executives away from their competitors instead of conducting extensive searches for qualified candidates.”
So, if hiring gains momentum, credit unions could lose key employees, putting them at a competitive disadvantage.
Staff turnover at Allegacy Federal Credit Union, Winston-Salem, N.C., has steadily declined in recent years.
“We hire people who fit our culture well, and the result has been a continuous decrease in turnover,” says W.K. (Ike) Keener Jr., president/CEO.
Allegacy Federal, with $966 million in assets, uses Profiles XT—a culture-assessment tool from Profiles International. The tool measures and analyzes a candidate’s behavior traits to ensure they align with the credit union team.
Since we started using this tool in 2009, our turnover rate dropped from 24% to 14%,” says Keener. “It’s down to about 8% in 2012—well below the national level reported in CUNA’s recent turnover study.”
Credit unions with strong cultures that support employees are in a good position to retain staff and help the organization thrive.
“At Allegacy Federal, we take a holistic approach by taking care of our employees’ minds, bodies, and spirits,” Keener says. “Our training and education are designed to help employees feel comfortable in their environment and believe in their ability to succeed.”
Not only does Allegacy Federal provide training and education to improve employees’ job performance, it helps employees manage their own financial lives through its nonprofit entity, The Center for Smart Financial Choices.
And to improve employees’ health and well-being, staff can join the Allegacy AllHealth Wellness Program, which offers a wellness coach, workshops, free gym membership, and health and wellness discounts.
Keener says the credit union’s philosophy of people helping people plays a strong philanthropic role in its community as well. More than a decade ago, credit union employees began raising awareness about the importance of breast cancer screening after three employees were diagnosed with the disease.
They rallied together to support organizations such as Cancer Services and the NC Triad Affiliate of Susan G. Komen, donating more than $1 million to fight breast cancer and raise awareness.
Ventura (Calif.) County Credit Union has also seen a decline in turnover, according to Joseph Schroeder, president/CEO of the $625 million credit union. The credit union’s turnover rate was 33% in 2006, 20% in 2008, and 16% in 2009.
“In 2010, which was my first full year at the credit union, our turnover rate was at 14% and last year we had a record low of 13%,” Schroeder says.
In 2007, the credit union’s human resource department instituted applicant testing to measure candidates’ customer service skills. The tests revealed employees scoring high in empathy, trust, tact, and flexibility not only provided excellent member service, but also fit extremely well into the credit union’s corporate culture.
This year, however, Ventura County expects turnover to rise to 17%.
“From exit interviews, we know about 43% of employees who left the credit union did so because they moved out of the area for personal reasons, like going back to school,” notes Schroeder. “About 26% left for other positions, and 17% were asked to leave.”
Whether it’s replacing employees who leave or filling new positions, Ventura County looks for the necessary job skills and three other factors when hiring or promoting employees: initiative, adaptability, and constant improvement within an employee’s position.
Ventura County also looks for “team players” (“Top competencies companies seek in new employees”).
“The employees who can really hurt your organization aren’t the ones who quit and leave; they’re the ones who quit and stay,” says Schroeder. “If you’re going to continue to work here, we need you to work hard, work smart, and pull in the same direction. I’m willing to let the loner superstars go in favor of those who can roll up their sleeves and be part of a team.”
NEXT: Hiring trends
2. Credit Union Staff Benefits Survey
3. Credit Union Turnover and Staffing Survey
Credit unions continue to shore up their workforces with part-time employees. Overall, part-time positions accounted for 21% of credit union staff in 2011—a five percentage point increase from 2010, according to CUNA’s survey. Soltis expects this trend to continue until the economy starts to grow.
Another trend unlikely to change until the economic recovery gains traction is the number of new credit union positions—especially for front-line staff. In 2006, 7% of credit union employees were hired to fill new front-line positions. This percentage has gradually decreased to only 2% in 2011 and 2012.
Many credit unions are, however, redefining duties for current front-line staff. Technology has changed the way credit unions and members conduct financial transactions, often decreasing the need for as much face time.
“But members, struggling to pay off debt and insecure about their financial futures, are coming into the lobby looking for help with more than the typical transaction,” says Soltis.
To meet these needs, some credit unions are expanding the teller role to more closely resemble that of the member services representative or to address members’ needs at a single point of contact. About one-third of credit unions have these positions, sometimes called “universal employees,” according to CUNA’s 2012-2013 Complete Credit Union Staff Salary Survey.
Not all credit unions, however, are holding back on creating new positions and hiring. Allegacy Federal has 323 full-time-equivalent employees and is actively recruiting more. It recently created two new positions—chief strategy officer and chief experience officer—each with various functions including marketing, human resources, learning and development, project management, and business development.
The credit union also has strengthened staffing in its lending department.
“We’ve been outpacing our peers by 4% to 5% in loan growth during the past year,” says Keener, “requiring us to take an in-depth look at the types of staffing levels we need to adequately serve members. For example, we now have three groups of employees within our lending department—representing consumer, real estate, and business lending.”
Before the end of next year, Ventura County also plans to add 20 more positions to its current staff of 139 full-time employees in business services, information technology, and marketing.
And the credit union is well aware of the need to keep up with changing skill sets.
“The marketing workforce has had to adapt and change the most,” says Schroeder. “Gone are the days of simply producing good copy and creative materials. Today’s marketing execs need advanced analytical skills.”
Today’s marketers, Schroeder says, also must create social media, mobile banking, and e-marketing strategies. “Bank of America, for example, has more than 100 marketers dedicated exclusively to social media,” he notes.
Harvard University Employees Credit Union, Cambridge, Mass., with $400 million in assets, takes a unique approach to hiring front-line staff, drawing from a wide variety of professions including theater, art, and hospitality.
“We hire for personality,” says Eugene Foley, president/CEO. “It’s not always easy to describe the type of personality we’re looking for, but we know it when we see it. We adopted this hiring strategy about two years ago. We can train them about the features of our products and services, but we can’t change their personalities.”
Foley, who started as a teller at Harvard University Employees 30 years ago, came from the old-school model where teller experience was the primary qualification for getting hired and promoted. “I love to see our employees advance in their careers,” he says.
The credit union uses career paths to motivate employees.
“You have to have a career path,” he says. “That’s how most of our employees at management and supervisory levels got there.”
The recession didn’t stop the credit union from hiring steadily during the past three years. It added seven new full-time positions this year, giving it a total of 75 full-time employees.
“We are among the fastest growing credit unions in our state,” he says. (The credit union’s field of membership includes Harvard students, faculty, staff, alumni, teaching-hospital employees, and other affiliations.) Some member growth has come in the wake of the financial meltdown, when many consumers switched from banks to credit unions. But five years ago, Harvard University Employees took calculated steps to grow beyond auto loans and direct lending.
One focus area is credit cards because it has a large field of membership to draw from: 20,000 graduate students in 13 schools, plus 240,000 Harvard alumni in the U.S. and 360,000 worldwide.
Another priority is to provide as much self-service to members as possible. Foley says members’ use of remote delivery channels is high. During the past few years, the credit union hasn’t had much turnover, but a stronger online presence has redeployed more positions from the front lines to the back office.
“There used to be three mortgage originators onsite, but now that 70% of mortgage applications are done online, one person fills that position,” explains Foley. “This year we expect $100 million in mortgage applications to be filled out online.”
The credit union also has dedicated one full-time employee to social media.
“We’ve made it easy for members to reach us when they need to,” says Foley. “It has obviously made a difference because I can’t remember the last time I heard from a disgruntled member.”