How To Retain Employees As U.S. Economy Improves
As credit unions eye an improving economy and what it means to ALM and their own bottom lines, they shouldn't forget the challenge it can present in another area-recruiting and retaining employees.
Yvonne Evers, president and CEO of Middleton, Wis.-based HRValue Group, which is owned by a consortium of state leagues and CUNA Mutual, told NAFCU's annual conference that many credit unions have gotten used to a tight job market where employees have been content to stay with their employer. But that could change.
"This is a good trend, but it will bring challenges for employers as workers seize new job opportunities to achieve their career goals," said Evers.
Citing statistics from CUNA & Affiliates' 2002 Complete Staff Survey Report, Evers said turnover at credit unions among front-line staff decreased from 38% in 1999 (just prior to the recession), to 28% in 2002.
For management employees, the turnover rate decreased from 12% to 8% during the same period. Overall, credit union employee turnover decreased from 24% in 1999, to 17% in 2002.
Management turnover historically has been low, but Evers expects it to increase. "Vacancies often are filled from within, but with a large number of CEO retirements expected in the next five years, more managers will move among credit unions. Plus, we'll see an influx of newcomers from other areas of the financial services industry."
Credit unions not currently experiencing problematic turnover rates might be tempted to remain content, but that would be a mistake, she said. "An improving economy produces a lag effect with employment. New jobs aren't created until after a recovery takes hold, so people will stay put until new job opportunities arise."
Credit unions already experiencing high staff turnover should be very concerned. "If your credit union has problems retaining staff, you really have an issue to deal with, because the situation is going to get worse," said Evers.
The economy and unemployment are key drivers in determining how easy an employee can switch jobs. Although credit unions have little influence on these factors, they can greatly influence an employee's desire to move. Creating a good work environment attracts good employees and makes them want to stay, she added.
The key to effective recruitment is patience, Evers said. "Don't hastily hire someone just to fill a vacancy. Training costs money, so take time to hire the right person."
Offering competitive wages and benefits are very important, but so are having a well-defined job description, and a solid orientation and training plan. Evers suggested additional recruitment strategies such as implementing employee referral and sign-on bonuses, accelerated pay increases, paying above market, and allowing new employees early eligibility for vacations and participation in benefit programs, such as 401(k)s.
Credit unions can better retain good employees by giving them meaningful work, setting high standards and providing a clear sense of purpose and direction. It's also important to acknowledge a proper work/life balance. "You have to balance the 'worth-its' for employees. That means they must feel their rewards justify their hard work for your credit union," said Evers.
Other important keys to retaining employees include: having fair and equitable policies, encouraging professional development, poviding feedback and recognition of employees, treating employees fairly.