How credit unions can respond to the Great Resignation and set labor standards that will benefit everyone for years to come
Credit unions have not been immune from the effects of the pandemic-induced Great Resignation; employees have quit their jobs in higher-than-usual numbers, and positions have remained unfilled much longer than is typical.
You may have heard stories of employers getting no applicants for their open positions—or experienced it yourself. Or perhaps you’ve heard about interviewees who stood up the recruiting panel. Even worse are what CUES member Kent Lugrand, president/CEO of $1 billion InTouch Credit Union in Plano, Texas, calls “ghost employees”—new hires who accept a position and then don’t bother to show up for their first day.
Credit unions offer some of the work perks employees are asking for today, such as a mission-driven culture and employee-centric benefits. But it is important to take a new tack when it comes to communicating those perks to potential employees and mentoring them through the application and hiring process.
The Great Resignation by the Numbers
The pandemic caused many people to reevaluate their priorities, which caused a record number of people to leave their jobs. In 2021, 47.8 million people voluntarily left their jobs, an increase of 12 million over the previous year and the highest report of voluntary resignations since the Bureau of Labor Statistics started tracking that number in 2001.
Financial services fared better than many sectors of the economy, but analysis from the economic policy center showed that quits outpace hires in our industry too.
Why did so many employees quit? Employee well-being company Limeade surveyed people who quit their jobs, and they found that burnout was the top reason (40% of respondents), with organizational changes (34%), lack of flexibility (20%), discrimination (20%) and not feeling valued (20%) also cited. Limeade also found that a whopping 28% of the people who quit had been so unhappy that they left without first lining up a replacement job. And many older workers chose to retire, as stock market growth and rising home equity gave them a sense of financial security.
With all these workers quitting, businesses have a lot of jobs to fill, leading to a shift in the balance of power between employers and employees. BLS data shows that for every 10 open positions, there are only six unemployed people to fill those jobs. To help attract employees, businesses in all sectors are raising wages and offering signing bonuses. Payroll processor ADP’s research arm found that existing employee wages rose 5.9% in 2021, and job switchers saw increases of 8%.
What This Means for Credit Unions
Although there seems to be a general feeling of doom and gloom among hiring professionals across industries, there is good news. First, quits seem to be declining as 2022 progresses, according to the monthly reports from the BLS. Wage growth also seems to be leveling out, making it easier to predict staffing costs as the year continues. And credit unions are in an industry sector that has seen lower turnover across the board.
As credit unions work to overcome the Great Resignation and rebuild their talent pipeline, there are three main areas to focus on: pre-application, onboarding and retention.
The most important change for credit unions to make in their talent acquisition strategy is to move from a passive strategy to an active one. According to Jason Walker, chief people officer of Thrive HR Consulting, “People are not seeking you out anymore. You have to go out and find the people you want in your organization.” To do that, he suggests using LinkedIn to find people to invite to apply, hosting online and in-person events (where it makes sense and fits local requirements) and increasing referral bonuses for current employees.
Chary Krout, co-owner and partner at employee engagement firm Cultivate, suggests that credit unions look outside the industry. “A lot of times,” she says, “organizations, boards and executive teams are looking for a specific skill set. And they recognize those skill sets may not be found in the credit union space.” Instead, recruiters need to search other areas of financial services and even other industries to find the right people.
New college graduates might also be a great option, Walker notes, even if you wouldn’t have hired at that experience level in the past. The added training needed may be offset by the ability to get someone motivated into the position quickly.
An active strategy is necessary for onboarding new hires as well.
Credit unions will need to keep a one-on-one relationship with new hires from the time they make the offer until the hire shows up on their first day, says Walker. “You need to do an immense amount of hand-holding in that two-week period—from when they give notice at their old job to when they start—to make sure they show up.” Have the branch or department manager call ahead of the start date to get to know the new hire and send a welcome basket or other type of gift. Make sure they know their peers will be ready to welcome them and that a lunch has been set up for that first day. The crucial element here is to keep the connection warm, because your new employee may be reviewing other offers while they are waiting to start at your credit union.
Once you get your new employee in the door, you may want to change up your typical onboarding process. For example, Molly Lehrsch, co-owner and partner at Cultivate, points out that employees coming from a different industry may need some help getting acclimated to the jargon and the industry. What is NCUA? What is the league? What key publications are available in our industry? (CUES members can download the “Welcome to Credit Union Leadership” for their hires who are new to the industry.)
For employees coming from inside the industry, helping connect them with the contact at the league they’re likely to work with the most or introducing them to the local young credit union professionals group could help foster feelings of belonging right away. Just take 20 minutes to figure out what will help your new person feel comfortable in your credit union, Lehrsch suggests. “It’s not a one-size-fits-all approach.”
Although the immediate crisis of being unable to fill open positions may be taking the bulk of HR’s and the board’s attention right now, retention is the more important piece. A recent study by Glassdoor reports that the average cost of hiring a new employee is $4,000. And that only includes the hard costs. That number doesn’t take into account the soft costs of an open position, including lost productivity and stress on the other workers.
Many employees who have moved to new companies are feeling regret. Job posting site The Muse surveyed its audience and found that 72% experienced “shift shock,” a realization that the new company or job isn’t what they expected. And 41% said they’d leave that new job in just a few months.
With these results, it seems much more cost-effective to do the work to keep employees happy in the first place. But what do employees want?
Fair pay is important. InTouch CU does salary surveys every year to ensure parity in their local market. “I never want it to be where my employee can walk across the street to another institution, do the same job and get paid substantially more,” Lugrand says.
Benefits are also critical. Health insurance, retirement contributions and paid time off for illness and vacation remain important, but Lehrsch says credit unions also need to look at other benefits that fit the employee they are going after. For example, a young professional may not “care about 100% paid medical but would really benefit from a college debt repayment program,” she notes. The key is to explore benefits from the lens of your employees.
Walker echoes this approach. Some companies are providing sign-on bonuses in cryptocurrency, because many younger millennials believe in the power of crypto, he reports. Others are offering pet insurance as a benefit because it’s valuable to so many job-seeking pet owners. Offering a flexible benefit package that includes perks you may not have expected a decade ago will help boost retention as well as success in hiring.
What do employees value more than a robust benefits package? Work-life balance, according to a 2022 LinkedIn Talent Solutions report. Sixty-three percent of respondents said work-life balance was their top priority when choosing a new job. Flexible work arrangements, including the option of at least part-time remote work is an important component of work-life balance for credit unions who want to attract and retain top talent. After COVID-19 forced credit unions and other businesses to figure out how to work remotely, many employees haven’t wanted to come back to the office full-time. Whether it’s an issue of childcare or personal preference, 68% of workers would prefer to work from home three to five days per week.
Although it can seem challenging to implement remote work for some positions in the credit union, there is technology that can ensure contact center staff, for example, can work remotely—and securely—at least part of the time. Interactive teller machines can allow front-line staff to perform many functions for members without actually being physically in the branch that member is visiting, says Lugrand. Creative job-sharing could also let front-line staff work part-time physically in the branch and part time remotely in the contact center. With internet access and VPNs to ensure security, the experience can be the same for members while providing a highly desired employee benefit.
Finally, employees want to be part of a company that makes a difference. Lugrand announced a few changes and initiatives at InTouch CU recently that helped his employees feel more connected to their community. The first was additional paid time off that employees can use to volunteer at a charity or organization they’re passionate about. The second was a donation to local food banks. The credit union surveyed employees, he says, asking “If the credit union could only support one charity to make a difference, what would it be?” And 90% of the employees ranked “food insecurity” as one of their top issues to address. As a result, InTouch CU now donates a portion of every loan payment and every debit card swipe to local food banks and charities that help feed the community.
Making the Change
As credit unions adapt to the new normal of hiring and onboarding, the challenges can seem overwhelming. Assess where your biggest pain points are—whether it’s in finding appropriate applicants, getting new hires to commit or retaining great staff—and decide which changes you need to make first to solve the immediate issue of shifting from the Great Resignation into the Great Regeneration. Then, with the right talent in place, you can move on to the next elements of your post-pandemic strategy. cues icon
Former credit union staffer Jennifer Roland Cadiente is a writer based in Oregon who focuses on technology and financial institutions.