Employee turn-over in the credit union movement

When we set out to develop this web site which has blossomed into the community we call EverythingCU.com, I didn’t really know what the picture of credit unions in North America was like. It sure has been interesting finding out over the last 7 years. I’ve seen all sizes… from $7 million in assets to $1 billion in assets, from a couple thousand members to a couple hundred thousand members. One of the most gratifying discoveries is connecting with hundreds of the world’s finest people: credit union professionals. You are among the finest professionals, with such high integrity, honesty, compassion, zest, industriousness, schwerve, and humanity.

There were many things that I didn’t anticipate in this amazing journey of CU discovery. One of the most startling ones is the rate of turn over of employees in many CU shops. Of course there are many people that seem permanently entrenched in their position or in their credit union. It’s wonderful that many CU presidents started out as tellers. But for so many… it seems here today, gone tomorrow. Why is that? Why is there a message of valuing people that often seems to stop at the teller window? Of course, there are CUs that are the opposite of this propensity; CUs that are amazing places to work. What is the dividing line between shops that can’t retain good people for seemingly a nano-second, and others that have employees knocking on the door to be hired?

The reason I write this is that in maintaining the EverythingCU community, we daily have to make updates to which CU a person works for. In addition, at the number one client of our Online Switch Kit, one that has seen 22,000 people check out the switch kit, there are no people remaining who were responsible for the re-branding/marketing campaign that seemed to be a huge success just a couple of years ago. Where did this team go? What happened at that CU? It shall remain a mystery I guess.

I have one main idea about why this is happening. And that is inadequate hiring practices. Many CUs are simply looking for people who meet a basic qualification checklist. But if that’s all they do, they are missing the most important part of the hiring equation. And that is this: Explaining what the credit union movement is, how their credit union fits into the movement, and how the employee will fit into the credit union. (These three items courtesy of EverythingCU.com COO, and employee/strategy expert, Matt Taggart). Basically, I think CUs are not evaluating, nor sharing the knowledge of, cultural compatibility with the organization. And making bad hiring decisions because of it.

But that’s just my idea. I am very much looking forward to reading why you think there is such a high turnover in the credit union movement.

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14 Responses to “Employee turn-over in the credit union movement”

  1. Christopher Says:

    Do you (or anyone reading) know how this turnover rate compares to banks? That would be interesting.

  2. Morriss Partee Says:

    Great question, Chris. I have no idea, and hope others will share if they have knowledge. Of course my perspective on turn-over may be skewed because EverythingCU.com has 5500 members representing several thousand credit unions. So the fact that we see some changes nearly every day may make the turn-over rate seem high to us when in fact it’s not as bad as it seems.

  3. terrell Says:

    I have a few thoughts on this. One is that there is high turnover in every industry. People don’t like to stay at one job for a long time, even if that job is a good one. A friend of mine who recently worked with a recruiter was told that being at one place of employment for over 5 years can look bad on a resume if you aren’t able to show you moved up the ladder. Most CUs aren’t large enough for people to move up very far.

    Also, CUs aren’t known for paying that competitively. In larger cities, it’s harder to survive on a not-for-profit salary.

    Lastly, because of the high turnover, people are hired quickly. If we are short 5 tellers, we aren’t going to draw out the interview process for weeks to find the perfect fit. I am TOTALLY guessing here since I don’t work in HR. But it seems like employees don’t become educated about the movement until after they are hired and it may or may not even matter to them.

  4. Andy Says:

    Terrell is pretty much right on the money I think.

    A teller position is an entry level position and people don’t like to stay there for very long if there isn’t a good chance at moving up. Most of our member service, loan, and operations people have been here for a long long time and aren’t going anywhere fast. You pretty much have to wait for somebody to get fired (very rare) or retire (even rarer) to get that opportunity to move up. Most tellers either get tired of waiting or are college kids looking for a quick gig. From what I’ve seen, only a few people here at Maine State CU really care what the credit union movement is. They come here every day because it’s their job. They’d be just as happy doing the same thing at a bank.

  5. Jeffry Pilcher Says:

    Americans are ramblers.

  6. Andy Says:

    Perhaps some sort of “movement training” should be implemented? That way at least new employees would have a sense of what the movement is…whether or not they care is their own prerogative.

  7. Morriss Partee Says:

    Andy and Terrell… I hear you about the tellers. But here is the message I am getting from your statements: Essentially, HR has this stance: “we’re too busy hiring tellers to take the time to hire tellers who would want to stay here.” And then they wonder why tellers aren’t staying, and the CU culture is down the tubes, and members are leaving the CU because there is no personal service. You can’t deliver good service when there are always new faces on the teller line. This creates a self-perpetuating cycle of teller turnover and members defection. And then marketing is tasked with bringing new people in.

    To clarify though, we have virtually no tellers as members of the EverythingCU.com community. EverythingCU.com is composed primarily of VPs of Marketing, Marketing Managers, Marketing Specialists, Business Development people, and other CU executives. We see a constant stream of turnover in the executive ranks of CUs. That can’t be healthy for the movement.

    And to Jeffry’s point: Many people leave the CU movement entirely. But probably nearly as many people leave one CU to go to another CU.

  8. Andy Says:

    See, you’ve got a much broader view of the movement from your spot. All I see are tellers moving in and out of the credit union, but all management staff has stayed nearly static for the 3 years I’ve been here. Obviously, thats not a particularly large block of time, but I’m the only teller who is still here from when I started early in ’05.

    I think its very important to find people who are going to stay in the movement, get to know our members, and offer them the service we strive to. I do think its a bit in the nature of the position for there to be a pretty large turnover on the teller line though. It’s not exactly a “respected” position (even though it ought to be, tellers are the face of the movement and should be a huge priority) and that fact pushes many tellers away from the position. Its unfortunate that the faces of our institution constantly change, it definitely detracts from the personal service we ought to be giving.

  9. CU Communicator Says:

    Morriss: I think part of the issue that plays a role here is that the “typical” credit union is not that large to begin with, so there are limited opportunities to work your way up the ladder. It’s just a guess on my part, but I’d venture to say that the majority of credit unions in the US have less than 50 full-time employees.

    Viewed from that perspective, it’s not hard to understand why MSRs would look for other opportunities after getting their feet wet. So it’s not necessarily anything that credit unions are doing wrong, but a reflection of market forces in a mobile workforce.

  10. Linda Bourgeois Says:

    Tellers are a critical component of the credit union team. They are your welcoming committee as well as your first line of defense. I do agree that they may begin their employment at a credit union without much in-depth knowledge of credit unions; however it is our responsibility to educate them. All employees want to be treated with respect, know that they are valued and compensated accordingly through salary and benefits.

  11. Morriss Partee Says:

    @Jeff – Indeed, the majority of CUs have less than 50 employees. But size is not reason enough for this situation, because there are chances to grow as the institution grows. The most important part, from my point of view, is a natural fit between employee and organization.

    @Linda – Great answer. It’s relatively easy to give some basic information to prospective employees as to what a CU is. Good employers will evaluate not only on the job skills of the interviewee, but on how interested the employee is in the mission of the organization. Is the reception to the info enthusiastic or lukewarm?

  12. Mike Says:

    Great comments and excellent subject. As a vendor to both banks and CUs I sense a frustration level in many of the marketers that I’ve met. Many of them, including many of your community members I would suspect, are anxious to move past the advertising/PR that has been such a staple for years and get involved in more strategic marketing. Unfortunately, it seems that there are still a significant number of institutions are completely averse to marketing doing anything other than putting up nice posters, having cool trash-n-trinkets, etc. The institutions, and senior management, still tend to look at marketing as a sideline, rather than a key part of the strategic process. When budgets are cut, one of the first cuts is always in marketing. I would think that progressive marketers are looking for opportunities to get into organizations that ARE progressive and will support them becoming more strategic. Just my 2 cents’ worth….

  13. Tony Mannor Says:

    Wow, such a cool dialog!

    From my perspective (as a serial employer and emloyee) there are three issues here.

    #1 is the short term mindset of the HR department. I like to call this the “Warm Body Syndrome”. You see this a lot in retail where as long as there is a warm body at the cash register stomping on buttons, everything is running smoothly. The problem with this is that you are constantly training and filling slots. You build no relationship with your customers or members this way.

    #2 is poor management. If the employees feel unappreciated or like they don’t count in the big scheme – fir the management. This takes so little effort that it is sad. I have worked for the “Hard Ass” type bosses that yell at you and treat you like a pawn. What happens is the employees end up sabotaging the business (intentionally or unintentionally). I have also had managers who seemed to really care. Managers who were so great that when you thought about calling in “Sick” you felt so guilty that you would go in anyway. I think entranchment of management is not a good thing. Now I am burning people who pay me but it is true. It is great to say “Our CEO started as a teller” but if that CEO is running the credit union “Like it has always been run” then they are doing nothing but dropping anchor on your credit union journey.

    #3 Drop the “Drama Queens”. I have seen (as an employee and employer) one person come into a great and productive team and turn the place upside down. I have a business where the people who worked for me would confess when they did something wrong. They woul go above and beyond the job. I would get phone calls from customers about how great the coffee shop was and the customers would actually bring christmas presents to the workers. I hire one girl who would “half ass” her job. People would complain to me but because I woudlnt give up on anyone – I tried to work with them and mentor them. What happened was everyone became miserable. Quality of work dropped, sales dropped and so on. So, to build your super team of employees, you have to not hire the drama queens and fire them as soon as they raise their ugly heads. They really will “Spoil the whole bunch” and increase your turnover.

    Just some thoughts 🙂

  14. Suzanne Says:

    Most of the problems that have been discussed can be classified into human resource issues. It must start at the top with more than adequate HR training. No matter what movement or business people are in, they must have a good understanding about people and how they work. Unfortunately some do not see the value in that.

    I did read at one point in a CU publication that the typical cost of employee turnover in this industry is about $50,000 per person. Of course, there are variables to this. But if you include the time lost in training of that person, the lost income of he/she isn’t replaced right away, the cost of rehiring, the cost of retraining, the affect it might have on employee morale and many other fun-to-dos, that is not an unrealistic figure.

    Internal PR/Marketing is so important today to keep staff motivated as well as on board. I have experienced it making a tremendous difference if it is performed correctly.

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