In 2022, McKinsey & Company found 40% of U.S. employees were planning to leave their jobs. While market-based compensation and benefits are a starting point to retain staff, McKinsey’s research found employees placed more emphasis on relational factors than on transactional factors.
The top reasons people quit: not feeling valued by the organization or by their individual managers, and not feeling a sense of belonging at work.
“Leadership needs to ensure that employees are connected to the credit union’s mission,” says Kristin Shultz, president/CEO at $600 million asset Spectra Credit Union in Alexandria, Va. “Knowing you’re doing good work helps create an emotional tie.”
Kent Lugrand, president/CEO at $1 billion asset InTouch Credit Union in Plano, Texas, believes CEOs “need to communicate the credit union’s vision in a way that allows the entire staff to see career and success opportunities for themselves within that vision.”
There also must be space to grow.
“The credit union needs to grow fast enough to allow for potential internal promotions, either in existing departments or new departments, as well as for other opportunities within the credit union,” Lugrand says. “Job descriptions that expand duties or allow for delegated responsibilities can facilitate career planning.”
Having multiple internal options creates a well-rounded environment, he adds, as does creating a learning and growing environment in which employees can thrive.
Flexible work arrangements can drive retention. According to the National Bureau of Economic Research, hybrid work models reduce attrition by more than one-third and improve measures of job satisfaction.
At Spectra, remote work is specific to certain positions, and department teams decide the rotation of hybrid work, Shultz says. This gives staff control over the workflow.
Spectra also empowers and engages staff by sharing results of its annual employee survey. An employee task force takes a deeper dive into results to suggest improvements and identify problems.
“They look for root causes,” Shultz says. “Most of the time, they can identify the ‘why’ and can come up with solutions.”
Employee engagement is encouraged via a “fun” committee that’s responsible for organizing and managing holiday parties and other events. The credit union also formed an employee resource group for young professionals.
The credit union’s dress code is two words long: Dress appropriately. “We want you to be you,” Shultz notes.
A lack of trust can cause staff to leave, as can a lack of accountability. “If co-workers are seen as getting away with something, that can affect retention,” Shultz says.
CEOs need to establish and communicate minimums. “Every employee is not a superstar,” Lugrand says. “There must be minimum standards for every team.”
He believes that employees’ relationships with their direct managers play a key role in turnover and retention.
An internal leadership training program can help new leaders succeed. Lugrand also stresses that leaders must have “the ability to listen—beyond hearing—to judge and address situations before they become full-blown problems.”
Open communication, with honest and timely feedback, can build a “can’t leave” culture, Lugrand says.
Hiring staff who are a good fit for the credit union also improves retention.
Pay and benefits are no longer the only factors in choosing where to work, according to the 2023 Net Positive Employee Barometer Report. Employers’ values (88%), commitment to the environment (73%), and social equality (75%) are other key criteria people consider when deciding where to work.
Founded as the Naval Research Laboratory Credit Union, Spectra rebranded to emphasize its vision of diversity and inclusion. Its diverse employee base—60% of staff are people of color—reflects the credit union’s commitment to be a financial cooperative where everyone is welcome.
Shultz believes that a “can’t leave” culture is largely based on common sense.
“Treat people with respect for their viewpoints and their needs,” she says. “Keeping employees happy is easier when you’re doing the right thing for the right reasons.”