FORT LAUDERDALE. Fla. -
That's a message that Dr. Jim Likens, dean of Western CUNA School, a CU executive development program held annually at Pomona College, said to attendees of the NASCUS 2007 State System Summit.
"The service sector is rising," he said. "The best jobs in today's United States' economy are ones in the service sector."
These service jobs include anything from attorneys to physicians to McDonald's employees, Likens said. In addition, 39.4% of U.S. workers work for the government, he said, adding that CUs should ensure their fields of membership include these workers.
Likens, whose topic on the agenda was "Challenges to the Credit Union Balance Sheet," also shared with the 200-plus attendees the actual and predicted ROAs for credit unions throughout the past five years. The predicted ROA went down from 1.14 from 2002 to .65 in 2007. It's too early to know the actual 2007 ROA, but the actual 2006 ROA was .82. Likens said that CEOs were able to hit the target ROA by slowing the growth of assets, by offering low rates on deposits. This worked, he said, resulting in growth for banks, but not for CUs. "We've got some growth issues," Likens said. "In 2006, more credit unions lost members than gained members." Likens said that its mainly the smaller credit unions that are taking these hits, but that "even some of the larger credit unions are not growing."
"I do not want the message you take away to be that small credit unions are doomed," he said. "I think we will have small credit unions, just not as many of them. A good field of membership is crucial."
One way for credit unions to remain strong is to be relevant to young people, Likens said. But, he said that there are not as many young people in the population as there used to be, and that perhaps the most important way to gain new members is through marketing. He compared successful advertisement campaigns for products such as Frosted Flakes, Energizer Batteries and Coca-Cola-with messages consumers remember such as the now-famous Energizer battery-to less-successful campaigns of credit unions that shout out numbers or interest rates.
Likens said that HR is now becoming extremely important to helping plan marketing campaigns, due to the growth of the labor forces slowing down, also noting that there is increased longevity in the workforce, causing the age of the workforce to be going up.
"Some of us are going to live a long time," Likens said. "We're also experiencing declining U.S. birthrates. We are living longer and having fewer children. This is worldwide. We're going to have a lot of seniors and not so many kids. And the workers have to support both the seniors and the kids. Some of us are going to have to work longer."
Likens said that one other answer to the industry is the merger of credit unions. He said there are three different types of mergers among credit unions.
"One-someone acquires someone else," he said. "Two-someone pretends they are acquiring someone else. Three-a real marriage."
"I think there should be more mergers," he said.
But only if the circumstances are right, Likens added, such as when a CEO of one credit union is about to step down anyway.
"Otherwise, it becomes political," he said. "Who gets to be the CEO?"
