CUES research highlights top problems and priorities for employee development.
For the entirety of my tenure working with credit unions in North America, executives and board members have expressed concern about attracting and retaining talent. Concerns about competitive compensation, opportunities for professional growth and succession planning have long held sway on the minds of the leaders of the credit union system. Rightfully so. The ability to hire and retain the right people is key to the long-term sustainability of the cooperative financial system.
During the pandemic and recovery, the focus on talent intensified as we began hearing about “The Great Resignation” or “The Big Quit,” the trend of employees resigning from their jobs to find positions with greater flexibility, remote work opportunities and higher compensation, or to stay home with their families. COVID-19 allowed employees to rethink their work situations and encouraged them to prioritize what is most important to them in a job.
As CUES began its third annual HR and talent development survey of CEOs and HR executives in North American credit unions, we were interested in seeing whether the sentiment expressed by executives in other industries would be reflected in credit unions. What impact would COVID-19, remote work and a desire for increased flexibility in the workplace have on the credit union system, and how might CEOs and HR executives respond?
CUES retained Acuitim Marketing Research and Consulting to facilitate the survey. Our objectives for the survey were to better understand the most challenging aspects of talent development at credit unions and how the executive teams plan to address them. We also hoped to evaluate how effectively credit unions tie their strategic planning to addressing talent development needs and gauge whether the current workforce is aligned with credit unions’ current and future needs.
Changes in Remote Work
The impact of the pandemic on credit unions was evident in the data on credit unions employing remote workers. Seventy-five percent of responding credit unions are currently employing or are willing to employ full-time remote staff. This is a full reversal from pre-pandemic practices. In February 2020, 71% of credit unions did not employ remote full-time employees, but by the middle of March, many were forced by COVID-19 protocols to shift to a largely remote staff. In February 2021, the COVID-19 vaccine was still relatively new, the pandemic was still at its height, and 79% of credit unions were still permitting full-time remote work. The consistency in employment trends from 2021 to 2022 may indicate a long-term shift in mindset on remote work.
However, working remotely is not a boon for all employees. Older employees and employees with greater than 20 years of tenure at a CU are expressing decreased personal connections and subsequent lower engagement. CUs are struggling to increase engagement, often relying on increased numbers of staff meetings, adding more team projects and implementing new technology solutions like Microsoft Teams, Slack and others.
There may be diminishing returns with additional online meetings and technology adoption. Instead, consider what has been lost by staff going remote or hybrid. Casual interactions, social engagements and informal brainstorming are made more difficult in remote and hybrid workforces. Some can be regained with the proper implementation of technology tools, but too often, training is limited, and valuable features remain unused.
Ensure your entire staff is thoroughly trained on how to best use your technology tools to recapture aspects of an in-person work environment, but also budget appropriately to allow staff—especially those out of state or more than an hour’s drive away—to come together at least four times a year to plan, socialize and have a meal together. Remote and hybrid work are here to stay. Begin planning and budgeting for ways to make it palatable for all your staff.
Top 4 Challenges
In the 2022 survey, CUES asked executives to rate common HR and talent development challenges on a scale of 1 to 10, with 1 meaning “not a challenge” and 10 meaning “a major challenge.” The items rated most challenging included:
- attracting and retaining talent,
- developing future leaders,
- building sufficient bench strength, and
- building robust mentoring programs.
Over the three years of the CUES survey, executives have consistently named attracting and retaining talent, developing future leaders and building bench strength as their top challenges. The addition of building robust mentorship programs in 2022 is perhaps due to the new focus on remote staff.
Encouragingly, the latest survey has shown a greater focus on developing plans to build programs for each of these top challenges. Attracting and retaining talent remains the highest priority for CUs. In addition, 68% of responding CUs have plans in place or in action to attract and retain the talent they need to successfully execute their strategies.
This is a marked improvement over 2021, in which only 56% of respondents had plans to address the issue. Verbatim comments in survey responses provide additional insight into the reason for prioritizing attracting and retaining employees, namely that perpetually training new employees diverts resources from developing existing employees, which may lead to additional attrition.
“Poor retention leads to endless new employee training, which in turn affects resources to train existing employees.”
“Turnover was a major hindrance. We couldn’t focus on growing the staff we had because we were trying to ensure we were filling open positions and training those new hires.”
Similarly, 59% of responding credit unions have begun addressing the need for adequate bench strength, up from just 39% the prior year, and plans for developing future leaders increased from 34% to 44% in the past year. These significant gains in plans to address the most pressing challenges credit unions face in HR and talent development are encouraging and may indicate that credit union executives have been able to turn their attention from urgent matters of responding to issues of the pandemic to the long-term sustainability of their organizations.
Of those credit unions focusing on attracting and retaining, 76% are evaluating wages and benefits to address the challenge. While compensation is key to remaining competitive in the market, CUs should also focus on other factors as well, including career development and advancement opportunities. Fifty-three percent of responding CUs believe it is “somewhat easier” or “much easier” for an employee to advance in their careers by moving to another organization than it is to advance at their CU. Additionally, only 33% of respondents have a formal process in place to retain high-potential employees. A lack of roles is the leading hindrance to internal advancement, yet 33% of HR executives also mentioned inefficient processes and procedures as impeding advancement.
Identify and Develop Your High-Potential Employees
CUES recommends implementing a structured approach to identifying and developing high-potential employees. Begin with a formal assessment of employees using either a 360 review or leadership readiness tool, both of which are available through CUES Consulting . The process will provide quantitative and qualitative data to help your leadership team identify future leaders and ensure a fair and balanced approach that helps eliminate bias and subjective judgment calls.
Once these employees have been identified, adopt a development approach that expands beyond formal classroom training and promotion. We recommend an approach called “More. Over. Up.” Give your high potentials an opportunity to:
- take on more responsibility in their current role,
- lead cross-functional teams or cross-train in another department (over), and
- eventually earn promotion (up).
Consider financial incentives and public recognition for successful execution or leadership of projects. Also, ensure each employee development step is aligned with organizational goals by adopting individual development plans. A well-structured IDP will outline the employee’s strengths and areas of opportunity for growth, provide clear guidance on the employee’s learning goals for the near, mid, and long term, and tie those development opportunities to department and organizational goals. In brief, the IDP highlights employees’ current skill sets, shows where they should be in 24 to 36 months, and defines how their improvement will contribute to the credit union’s goals.
Download the CUES IDP guide and worksheet.
Download the full report, “Top Challenges for Credit Unions,” with a section on mentoring
Christopher Stevenson, CAE, CIE, is CUES’ SVP/chief learning officer. Contact him at email@example.com.