I have recently spoken with a credit union professional experiencing a turnover rate at their credit union that boggles the mind. In a shop of twenty employees, they have gone through a full twenty employees in the last eighteen months, and twenty-five employees in the last two years. That is a turn-over rate of 100% in eighteen months, and 125% in twenty-four months! This is an alarm bell ringing extremely loudly to senior management that something is seriously wrong. Clearly, something is terribly amiss at this organization.
Whatever their current hiring practices are, they are simply failing. (Or maybe they have no plan or methodology for hiring.) Or perhaps current corporate culture is so bad that everyone is out the door as soon as they have something better lined up. Mostly likely it is a combination of both poor hiring practices and poor internal culture, policy, and attitudes.
I think this particular credit union does not recognize the TREMENDOUS cost of this turn-over. It’s really a triple-whammy that ultimately has a huge negative impact in at least three areas — a negative financial impact to the bottom line, a negative impact to their customer/members, and a continuing negative impact to the employees that remain.
There are at least two ways this turnover is hurting the company’s financials. One: The cost of constantly training new people. Two: In a service business where personal relationships are extremely important, it’s impossible for customer/members to develop a relationship with someone who is gone one or two months later. This leads to less business with current customer/members. Or in some cases, losing the business altogether.
When corporate culture is this bad, the impact on productivity and morale with the remaining employees becomes extremely difficult to turn around. But it has to start somewhere, and that’s with the top… the CEO and senior management has to address this issue and start fixing it… otherwise the downward spiral will continue.
In this case, the cliché is true: The definition of insanity is to do the same thing over and over again and expect different results.
From what I understand, this particular credit union has lost their way… lost their identity. They used to serve a single employer, and now that that company has been downsized, they have expanded to a community charter, but have no differentiation within their community, nor a clear plan to build relationships with their community. They are in dire need of redefining their identity, purpose, and brand. I wish them the best of luck!