Originally posted on CU Insight on January 15, 2014
Well, now that I’ve got your attention……
Over the past few months, the credit union industry has lost some very talented, passionate, and knowledgeable young professionals to other industries and even worse than that, to our banking competitors. I happen to know several of these folks and am a bit alarmed at the rate of turnover lately. These are powerhouses of talent, creativity, determination, and know-how.
I reached out to a few of these former credit union-ers individually because I was hoping that they would share their reasoning for leaving the industry with me. Luckily, they were and I wanted to share the information with you. I will not be sharing any names of individuals or credit unions for the sake of their privacy.
I already wrote about one of these individuals in a blog post a few months ago. You may remember if but in case you don’t, the post was called, “Is Marketing An Experiment?” It addressed the issue that for some reason, in some credit unions, the marketing function is seen as expendable. You can probably guess how I feel about that.
Let’s get back to the recent talent attrition. I wasn’t surprised with what I heard as to the reasons people were leaving the industry. Here are the ones that were mentioned the most:
1. They felt stifled at their credit unions. Despite their best efforts to try new things, the “powers-that-be” never let them shake things up and bring a fresh perspective to their marketing/business development efforts. This, despite being promised in their job interviews and on several occasions afterward that their input was valued and that they would be given at least some creative license. SUGGESTION: If you really want to retain the most creative and innovative people, then it’s best not to stifle their creativity and innovation. Of course, not everything is going to be a “yes,” but if everything’s a “no,” you will lose that talent.
2. They had reached a “plateau” at their credit unions in terms of advancement and, management didn’t seem to be concerned about keeping them on board. They weren’t even given opportunities for professional development. SUGGESTION: The best companies in the world want to hold onto their best people for as long as possible. So they sometimes create new opportunities and assign more responsibilities. If they can’t or won’t do something like this, they are at least honest with the employees (and themselves) and acknowledge that perhaps they aren’t growing because maybe they’re not listening to the people that they’ve hired to help change the situation!! Obviously, not everyone can be promoted but here’s the rub: not everyone wants that. Sometimes, what they want is more professional development, to serve as a mentor to other employees, or to simply have their efforts acknowledged in some fashion. They want to know that they are making a positive impact on the organization.
3. They aren’t being paid enough by the credit union. They haven’t received even a cost-of-living raise in years but the credit union is making money. At their current salary, they can’t achieve some of their personal or family financial goals. REALITY CHECK: In order to attract top-notch talent, you’ll have to pay them well. You have the reward the best people. You don’t have to withhold bonuses or raises for the cream of the crop because you can’t give every employee a raise. You do not ever have to give everyone a bonus or a raise (especially if you have employees that stink.) I say this all the time and people come back to me with “well, they work for credit unions so they should expect to be paid less” or “if they’re really passionate about credit unions, they would stay despite the money thing.” The problem with that logic is that credit union employees still have to pay their mortgages, raise their children, and save for their retirements and those things cost more than they did in decades past.
Hopefully, everyone is getting the idea that this particular trend is dangerous for credit unions. In order to survive and thrive, credit unions need to attract young professionals. We’re not doing a very good job of doing so. Credit unions need to accept that our business model must change because the marketplace has already changed. We cannot hang our hats on “we’ve never done that before” or “we’re not comfortable with changing” and expect to survive. The marketplace won’t tolerate it and credit unions run the risk of becoming irrelevant if they do not take steps to adapt to the “new order” as it relates to financial institutions.
Incidentally, more than half of the people that I talked to were lost to community banks. They, i.e., community banks are our biggest competition. What does that tell us? Are we paying attention?
So what happens now? Do we look for ways to change the way we operate? Do we take the necessary steps to adapt to the new scope of the marketplace? Do we aggressively seek to hire the young professionals of today and groom them to be the leaders of tomorrow?
Or do we continue to insist and remind our best people that “we’ve never done it that way before and we aren’t comfortable with changing anything?”