Low unemployment and increased salaries are making attracting and retaining talent more difficult.
When advancement opportunities are not available, credit unions are offering more in-depth training and face time with senior management.
CU QUICK FACTS
Directions Credit Union
Data as of 03.31.19
HQ: Toledo, OH
12-MO SHARE GROWTH: 16.2%
12-MO LOAN GROWTH: 17.7%
With the unemployment rate hitting a 50-year low of 3.6%, credit unions across the nation are competing like never before in a highly fluid job market. A 2018 Gallup poll found that 51% of U.S. workers were looking for or applying for a new job, and with several top-tier banks raising their minimum wages to $15 per hour, wage pressures are growing.
Average turnover rates for banks and credit unions peaked at 19.7% in 2018, according to BalancedComp s annual salary and incentive survey. Average pay increase projections for 2019 reflect the fastest market rate movement we have seen in eight years and definite proof that the typical 3% labor budget is not going to be adequate to stay competitive.
The community-focused mission of credit unions does a lot to increase loyalty among employees, but these days, employee retention, training and development, and succession planning are front-burner issues for many HR executives.
The reality is we re not the Googles and Amazons of the world, says Kathy Martin, senior vice president of development and support at Directions Credit Union ($880.7M, Toledo, OH). Employees, particularly younger employees, are looking for fast advancement, but there s not always constant movement upward. We re focused on investing in employees, giving them more depth in what they re doing for the credit union, and getting them in front of senior management.
CU QUICK FACTS
Data as of 03.31.19
HQ: Liberty Lake, WA
12-MO SHARE GROWTH: 8.9%
12-MO LOAN GROWTH: 18.2%
Employee training and leadership development programs go hand in hand with succession planning. They help ensure a steady pool of future leaders. Whereas most succession activities are directed by the board and focused on the CEO, credit unions such as STCU ($3.1B, Liberty Lake, WA) have broadened standards to include other senior leaders.
The succession plan started with a focus on the CEO, but it has now extended to any senior leadership team member or key contributor in the organization, says Laura Wood, vice president of human resources and organizational development at STCU.
Building an effective retention program involves an end-to-end approach to training, from new hire onboarding to development of senior-level competencies.
Directions provides a multi-tier program that includes:
- A three-week new hire training program that introduces the credit union s value statement, purpose, and products and includes a mock teller line to train new tellers on how to perform transactions and work with members.
- A branch ambassador that mentors and coaches new hires.
- Online development training and continuing education for which employees can earn pay raises, additional vacation, or even an associate s, bachelor s, or master s degree from the credit union s Star University.
- A career pathing program that prepares employees to move to a new role. Employees can train for new roles in advance of a job opening, which puts them in a better position when a role does become available.
- Monetary rewards such as a $50 gift card for receiving or renewing financial counselling certification.
- A three-year, three-tiered leadership development program that covers basic leadership skills, long-term strategic planning, and high-level leadership competencies, all of which prepares participants to serve as a senior leader in the future.
We believe heavily in education, says Martin, whose credit union employees 330 people across 23 branches in Ohio and southern Michigan.
New Leaders. Existing Staff.
Training and development programs naturally feed into succession planning, where the first step focuses on evaluating internal candidates.
Our preparation starts with identifying high-potential candidates who have the ability to work at the next leader level or above within two years, says Wood, who recently helped revamp the STCU board s succession planning and standards.
When a vacancy occurs at the president/CEO level, the board s human resources committee assesses STCU s current and five-year strategic challenges to determine the skills and attributes needed for the next chief executive. Focusing on key competencies, career experiences, and qualifications, the board reviews and updates the job description.
STCU s plan also calls for an ongoing executive leadership development program that includes an annual status report from the president/CEO to the committee. The status report provides an evaluation of potential leaders according to a nine-box grid that separates high-potential candidates from moderate- to lower-performing ones based on factors such as past performance reviews, key project achievements, and success with development assignments.
We typically give these high-potential candidates opportunities to accelerate development of additional leader competencies, Wood says. This can include assigning a mentor, creating development assignments, joining external boards and committees, or identifying continuing education programs and degrees.
Right Skills. Right Attributes. Right Hire.
When a vacancy occurs at the executive level, STCU focuses on key competencies, career experiences, and qualifications to determine the skills and attributes needed for the new hire and updates the job description.
Setting vision and strategy
Problem solving / Decision making
Building and maintaining relationships
Business/Personal Affiliation Accomplishments
Senior Management/Financial Services
Master s Degree
Credit Union Financial Business Model
Information Management Concepts
Source: STCU Succession Plan Policy and Standards