While dating back to 1852, credit unions really came into their own in the wake of the Great Depression. At a time when the nation was still trying to recover economically, credit unions and their focus on operating in the best interests of their members, rather than those of shareholders, caught on.
That same dynamic explains, in large part, why credit unions have fared so well since 2008′s Great Recession. The so-called "credit union difference" – member-owned, democratically-run earnings returned to members through higher interest rates, lower loan rates, etc. – has helped credit union membership rise more than 15% over the past eight years.
Today, almost 110 million Americans – nearly 45% of the country's economically active population – are credit union members. Total credit union assets are up by more than a third over that same period, while assets per credit union have nearly doubled.
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The news, however, has not all been good. Since the Great Recession, the total number of credit unions nationally has decreased amid numerous mergers and acquisitions. In addition, the entire financial services industry, including credit unions, has found it increasingly difficult to attract and retain good employees.
A recent report by PwC shows that millennials – the 54 million adult Americans between 18 and 34 who make up a third of the U.S. workforce – see the financial services industry as a stepping stone to other career options, but little more. Only 10% of millennials in the industry plan to stay in their current jobs long-term, compared to an average of 18% across all industries. Forty-two percent are open to job offers from other companies while 28% are actively looking for their next job.
That may explain why almost half of CEOs in the financial industry report they are unable to find talent with the right skills, while a quarter have canceled or delayed key strategic initiatives because they didn't have the right talent available. If credit union executives are going to take full advantage of continued consumer interest in credit unions, it's clearly going to be critical for them to better understand what makes millennials tick.
Personally, I believe millennials have gotten a bad rap. While more senior workers complain that millennials whine about doing more menial work, are too focused on salary and career advancement, and refuse to comply with authority, I believe credit unions need to focus instead on how those "negatives" can be properly understood and leveraged.
First, it's essential for credit unions to understand that millennials don't work for you, they work with you. Millennials are often criticized for asking too many questions, challenging accepted processes and for their so-called arrogance in not simply accepting "the way things are done here." In reality, millennials simply want a say in what's happening on the job. By capturing their energy and channeling it to transform processes, credit unions could turn millennials into a great source of innovation and improvement.
Take, for example, the way in which credit unions traditionally communicate with their employees. Most rely on procedure manuals, signage posted around the branch or mass emails – none of which will work with millennials. Millennials want to click through six options, not read six chapters of a manual. They want to check out an app, watch a 30-second video and then react with emojis, not lengthy memos.
Embracing such changes can go a long way toward connecting with, retaining and engaging millennial employees, but credit unions shouldn't stop there. They must also recognize that millennials want to constantly grow. They want to tackle new challenges and new opportunities. As a result, leadership teams must be prepared to give employees responsibilities that they will regard as meaningful and contribute to their own personal growth.
To that end, credit unions should engage employees in processes that make the organization more productive or in areas where they are experiencing difficulties. Create assignments that challenge them and play to their individual strengths and areas of interest. Seek their input to improve a specific job or process and then actually make changes per their recommendations. Even if work assignments are relatively simple, emphasize how their contribution is making a difference, not just to the credit union's growth but to its overall pursuit of excellence.
Credit unions should also use technology to empower millennials. Typically, millennials hate to waste their time doing the little things that many senior employees take for granted – filling out expense reimbursement forms, attending in-person training sessions and so on. Investing in technology that more effectively accomplishes these tasks will not only reduce the administrative time these activities require (and the potential for human error), they will also appeal to tech-savvy millennials.
By enabling millennials and encouraging them to identify and drive business improvements and innovation, credit unions can make millennial employees more productive. Even more importantly, they can establish a relationship with millennials that takes advantage of their capacity for change and builds a level of loyalty that will significantly impact employee growth and retention, and their overall business performance.
Ivan Seselj is CEO of Promapp Solutions. He can be reached at 415-549-9430 or [email protected].
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