Special Report: Recruitment, Retention & Training

As baby boomers retire in droves, many credit unions are finding the prospect of hiring from within daunting with too many ‘specialists’ in the C suite. It’s just one of the big challenges CUs are facing when it comes to recruiting, retaining and training employees.Credit Union Journal asked human resources experts around the nation to share the top trends, challenges and opportunities credit unions need to address right now.

Rebecca Coakley

Rebecca Coakley, director of human resources, The Partnership Federal Credit Union in Arlington, Va., $147 millionCoakley said though smaller credit unions faces a number or challenges in recruiting and retention, these issues can be overcome.“We compete in our market with larger, for-profit companies [that] have more dollars to put into recruitment, and because of their size, are more familiar to job seekers,” she noted. “We counter-act this by telling The Partnership FCU’s story of being a not-for-profit financial cooperative whose core purpose is to serve those who advance and promote the interests of the public. As soon as employees come onboard, we share our vision and teach employees how to provide value through partnership with our members in the communities that we serve.”Still, at smaller organizations, it can be difficult for employees to see how their skill sets fit into the organization’s strategic vision, according to Coakley.”At The Partnership FCU, our core values are directly tied to each employee’s job description,” she said. “Additionally, employees are recognized each month for exceptional performance based on our core values.” It is also challenging to provide remote and telework opportunities at a small CU. “We need our employees to have face time with each other and our members,” Coakley noted. “Though this is a challenge, we are flexible and look for ways that our employees can work remotely to best serve their needs and the needs of our members.” The credit union plans to expand its social media presence to increase its visibility to potential employees. “We believe in providing value through partnership and are always exploring ways to help tell our story and showcase our credit union as a ‘great place to work’ to potential employees.”

Michelle Dearholt

Michelle Dearholt , chief performance officer, Nusenda Credit Union, Albuquerque, N.M., $1.7 billionDearholt’s biggest hiring challenges relate to “attracting leaders who have the ability to lead multiple departments versus a specialized focus.” This kind of versatility, “increases business perspective and collaboration within an organization and puts leadership at the forefront of their oversight,” according to Dearholt.Another major challenge is “balancing the needs of the organization [with] the perks and wants of current or potential employees” whether that be skill, environment or communication preferences. “Ensuring we stay true to our credit union principles while becoming an employer of choice requires swift review and action of what our workforce needs to stay engaged,” she noted. But Dearholt also finds many opportunities to improve recruitment and retention, including retention programs and succession planning for senior roles that provide not just a monetary incentive, but the commitment to preparation and development opportunities towards future roles. She also seeks to “connect learning and development to the participant’s and organization’s value system,” which is especially important in developing leadership competencies in younger generations.Another area of potential growth: dedicating time and resources in leadership development “that’s more comprehensive and less of a micro-learning approach.”Some of the principal trends she sees include: the use of “strong leaders” as teachers in employee development initiatives such as workshops, brown bag lunches etc. “to reflect and reinforce cultural expectations of an organization.” In addition, credit unions are generating programs that promote a broader organizational understanding and retention through the use of comprehensive onboarding programs that in addition to technical training, including post-hire assessments. Some CUs are starting to hire employees for their “character” more than their skills. “We can train a willing person, the reverse doesn’t usually work well,” she said.Dearholt also referred to the practice called “department shadows.” “[That is] where an employee goes to a different department from which they work to experience their day and work responsibilities, i.e teller to records,” she explained. “We call it the ‘Take your co-worker to work’ program,” adding that it helps to “improve collaboration and understanding of various roles and ultimately everyone's impact to the organization as a whole.”
Sharie Flanagan, SVP of human resources at ENT Credit Union, Colorado Springs, Colo., $4.4 billionRelocation and the resulting impact on trailing spouses/partners; salary/incentive pay; and workforce diversity are Flanagan’s top HR challenges.The top opportunities, she noted, comprise: internal advancement and educational and professional growth. Lastly, the top trends she perceives are: the changing workforce and rise of millennials; the implementation of leadership development and succession planning; and the emergence of creative benefits and perks packages.

Jackie Henderson

Jackie Henderson, VP of human resources, Rivermark Community Credit Union, Beaverton, Ore., $720 millionHenderson, who is also a member of the Credit Union National Association’s HR & Organizational Development Executive Committee, said the top five challenges are: high turnover in member-facing positions; recruiting in her current market (which currently has a relatively low unemployment rate); communication across organizations during a period of rapid growth; providing professional development opportunities for branch staff; and succession issues in management- and executive-level positions, i.e. building “bench strength.”The top five opportunities are: leveraging the CU’s “Total Rewards” strategy; establishing differentiation from peers; continuing to build the CU’s unique culture; developing flexible schedules for “Generation Y” and “Generation Z” employees; and building a new management development training programs.Henderson noted the top trends she is seeing in the area of employment issues are: increased use of social media in recruiting; enabling and maintaining a workforce in remote locations (tele-commuting); “gamification” in training; and keeping flexible work agreements along with helping workers to balance work and life priorities.

David Hilton

David M. Hilton, president of D. Hilton Associates, Inc., The Woodlands, TexasHilton pointed to a growing need to replace retiring executives in the credit union industry, especially in the larger institutions.“There have been 65 retirements of CEOs in the [$500-million-plus asset] category in 2014 and 2015 and it looks like there will be more in 2016,” he said. “C-suite executives are not getting any younger.”Hilton further said that most C-suite executives are “specialists” as opposed to “generalists” and, consequently, do not necessarily make the best CEOs.In addition, retirement packages at many credit unions make it difficult for top executives to be moved. He pointed out that more than 56% of all CEOs at credit unions of between $400 million and $600 million in asset size have supplemental executive retirement plans (SERPs); while 65% of all CEOs at credit unions between than $600-million and $1 billion in assets have SERPs; and 77% of all CEOs at credit unions above $1 billion in assets have SERPs. Also, he cited, between 20% and 30% of all C-suite executives at credit unions over $600 million in asset size have some kind of SERP as well. “It’s hard for them to make a job change,” Hilton commented.Hilton further warned that credit unions need to look past their CEO and to their second in command executives for retention purposes. “If they don’t take care of their number twos, they could leave for another job,” he said. “They need retention (i.e, SERP’S) if the board wants them to stay.” And this appears to be something credit unions are responding to. Indeed, Hilton cited that of the last 65 replacements at the CEO position at credit unions with more than $1 billion in assets, 59 have been number twos (c-suite executives from their own credit union or c-suite executives from other credit unions).In a recent “SERP Survey” released by Hilton Associates, Hilton wrote: “CEO succession planning is one of the most significant challenges facing the credit union industry today. An aging workforce and the shortage of available CEO talent are issues that weigh heavily on the minds of most credit union boards of directors.”Thus, succession planning, he asserted, will “remain a top priority for the financial services industry, especially since the baby boomer generation’s retirements have yet to peak.”By understanding how the environment of the industry has changed, Hilton added, a credit union board can be prepared for the departure of their CEO by “being familiar with their options—whether that is selecting an internal candidate or recruiting from outside the organization.”

Sarah McGovern

Sarah McGovern, manager of learning and development, Veridian Credit Union, Waterloo, Iowa, $3 billionMcGovern pointed to three key elements of hiring and retention: salary, training and social media.“It’s important that our salaries stay competitive in each market,” McGovern said. “[But] this can be a challenge, especially when we are looking for a unique skill-set and as we move into larger markets.”As for training, McGovern noted that recruiting an external candidate for an executive position means they are new to a credit union’s culture, vision and values. “This requires more training compared to someone who is hired internally,” she noted. “Providing that amount of in-depth training can be a challenge.”Finally, social media now plays a bigger role than ever, according to McGovern.“Activity on professional networking sites like LinkedIn is a trend that offers recruiters both challenges and opportunities,” she said. “Executives are marketing their skill-set online, even while they’re not actively looking for a new position. While this creates challenges for retaining executives, it also offers opportunities for recruiting them. Ultimately, it makes us better. It’s added motivation for us to ensure we offer a great culture and competitive benefits package.”

David Ossam

David Ossam, SVP of human resources/general counsel, Hanscom Federal Credit Union, Hanscom Air Force Base, Mass., $1.1 billion“It has truly become a ‘buyer’s market’ and credit unions are under increasing pressure to enhance executive benefits and compensation,” Ossam said when asked about the challenges currently facing HR departments at credit unions. “[As such] it is taking longer to fill positions, especially those that require specialized knowledge or skill.” In addition, Ossam said increasing wages and salaries and regulatory uncertainty regarding changes in overtime are making it increasingly difficult for executives to manage their departmental profit and loss reports.But he also sees opportunities in recruiting. “[By] viewing them as more stable and less focused on quarterly returns, executives are increasingly viewing credit unions as desirable places to work,” Ossam said. “Executives are more willing to hire individuals who are talented and have good skills. That a candidate possesses credit union or, even financial services experience, is dimming in importance.”Among the top trends Ossam currently sees are an increasing awareness of data breach and other security issues. “No longer can executives view them as solely within the domain of the information technology department,” he commented.Other trends include: a greater focus on safety, especially as it relates to active shooters and violence in the workplace. Also, greater competition for members, deposits and loans, coupled with significant regulatory changes -- many of which are coming from the Consumer Financial Protection Bureau -- are “increasing stress levels and making work-life balance more of an issue for many executives.” Finally, he noted that credit unions are more willing to bring back former workers. “Where once people who left were often viewed as ‘pariahs,’ executives seem to be more willing to try and re-hire former employees,” according to Ossam.

Willard Ross

Willard Ross, SVP, chief strategy and talent officer, Coastal FCU, Raleigh, N.C., $2.6 billionRoss said retention is a big challenge because of the high number of CEO and executive retirements at credit unions. He also said many executives are “very specialized in their knowledge and skills,” meaning they’re not well prepared for the CEO or other senior level roles. In addition, it is hard to find capable external candidates for executive positions.On the other hand, Ross sees a number of intriguing opportunities that CUs should perform, including the identification and development of “high-potential” employees; improving ways to select talented, and capable employees; and a need to develop managers into “highly effective people managers.”Among the top trends: programs to provide executives with opportunities to broaden their knowledge and skills. “For example, swapping roles at the senior level,” he said. Other trends include a highly-structured “stay interview” program; along with SERPs and other executive benefits that reduce retention risk.

Robyn Whalen

Robyn Whalen, VP of human resources and administration, 1st Financial Federal Credit Union, Wentzville, Mo.From Whalen’s vantage point, one of the biggest HR challenges is finding the right candidates for the right jobs.“In our experience, when we post an executive-level position, we tend to receive a lot of candidates that have too much experience, and many that want too much salary, compared to what we posted and what we have to offer,” she stated. “We have also had trouble finding qualified candidates locally.”But Whalen also said there are also opportunities aplenty. “A couple things we think we do well with regard to recruiting and retaining executive-level employees is our competitive benefit package, including a rich PTO [paid time off-personal time off] policy and opportunity for tuition reimbursement and support for continuing education.”As for trends, she noted that “in the past couple years we have seen an increase in non-local applicants. It seems candidates are more willing to re-locate for the right position.” As an example, she cited that their most recent executive hire (which has yet to be formally announced) is relocating from the East Coast and from a credit union about one half the size of 1st Financial. “It is a lateral title move, but the greater asset size and different market will prove to be an appropriate-level step and challenge for him, and he a good fit for us,” she added.