Economic Upturn Could Mean Employees Leaving To Pursue New Options
An improving economy would be welcome news to many, but it would also renew hiring challenges for credit unions trying to attract and retain good employees, according to one expert.
Yvonne Evers, president and CEO of Middleton, Wis.-based HRValue Group, noted during CUNA's Future Forum that, "During the recent down economy, employee recruitment and retention hasn't been a problem for credit unions. But as the economy improves, businesses will shift to a hiring mode, which will create more turnover and greater competition for credit unions trying to hire and keep good employees."
Citing statistics from CUNA's 2003 Environmental Scan, Evers said turnover at credit unions dropped from 38% in 1999 to 28% in 2002.
She issued a sharp warning to credit unions that have not seen a decrease in their turnover rate during the economic downturn. "That should signal that something needs to be addressed. When times improve and companies start hiring again, these credit unions could see a significant increase in employee turnover." Credit unions need to act now and not wait to bolster their recruitment and retention efforts, she added.
Evers suggested various recruitment strategies such as implementing employee referral and sign-on bonuses, accelerated pay increases and allowing new employees early eligibility for vacations and participation in benefit programs, such as 401(k)s.
To retain good employees, Evers said knowing what your employees want is key. She had session participants rank 10 job aspects they thought employees valued from most to least important and then compared results from a WorldatWork research study. Surprisingly, the three items supervisors thought employees would rank as least important were actually ranked highest by employees. They were:
* Full appreciation of work being done.
* Feeling of being in on things.
* Help on personal problems.
Supervisors thought employees would be most concerned about job security and high wages. While important, employees ranked these items fourth and fifth, respectively.
Evers suggested credit unions try and improve compensation by establishing levels within jobs to allow for advancement; bonuses for project completion and job retention; variable pay scales; and paid sabbaticals.
Other emerging human resource trends Evers said credit unions need to be cognizant of and prepare for include:
* Rising Employee Benefits and Health Care Costs. Health care costs will continue to escalate, fueled in part by an aging population. Many companies are passing costs on to employees through higher premiums and co-pays. Credit unions, however, have historically paid a larger portion of employee health care compared to other companies, and that trend continues.
* CEO Succession Planning. CUNA's 2003 Environmental Scan indicates almost half of credit union CEOs will retire by 2013, yet only half of these credit unions have a formal succession plan or a senior management employee qualified to take over.
"Credit unions need to plan for this transition, because the retirement of a beloved CEO who has been there for 20 years or more can have a huge impact throughout the organization," Evers said. Several state departments of financial institutions that oversee CUs are now requiring formal succession plans.
* Changing Dress Codes. The dress code pendulum appears to be swinging away from casual dress, though it appears unlikely it will return all the way to the days of formal business attire, Evers said.
HRValue Group, LLC is itiative owned by a consortium of state leagues and CUNA Mutual Group. It specializes in helping credit unions establish human resources programs that "protect their investment in qualified staff," the company said.