Credit Unions CAN Win the War for Talent

The term “war for talent” was coined by a McKinsey & Company consulting team who documented and described the “increasingly competitive landscape for recruiting and retaining talented employees.” The original study was sparked by the go-go 1990s and the associated new economy. The McKinsey consulting team then published a book on the same topic in 2001 after the dot-com bust predicting “because of enduring economic and social forces, the war for talent will persist for the next two decades.” Now we are in the midst of that second decade and the war is still raging, especially for credit unions. Until the robots take all of our jobs, one can predict the war to continue well into the 21st century, especially for knowledge/specialty industries like consumer finance.

Thanks to cutting-edge research at Filene’s Center of Excellence for the War for Talent at the University of Texas-Austin, in addition to field-based innovation projects, Filene Research Institute is helping illuminate the way for credit unions to wage this critical battle. Below are a few insights that can potentially help your credit union win the war for talent.

Use Your Physical Workspace as a Differentiator

In an upcoming research project, University of Texas professor Sekou Bermiss will explore “Workplace Design as a Strategic Recruitment Tool.” Bermiss claims as professionals in the modern workforce spend less time in the office due to widespread adoption of telecommuting and other off-site working arrangements, one might expect that the physical workspace becomes less significant. But in fact, it is just the opposite: Time spent in the office becomes even more important. For this reason, physical working environment (PWE) design should be a central strategic concern for credit unions.

Past research looking at the relationship between PWE and the workforce has largely investigated how workspace factors impact employee productivity and satisfaction. In this report, we have shifted the focus slightly to think about how PWE can shape the ability for a credit union to attract new employees. Focusing on one specific characteristic, workplace flexibility, we find a positive association between PWE and candidate attraction.

In the organizational attraction context, employees encountering the physical working environment of a credit union with evidence of flexibility in choice of work spaces may perceive that physical working environment to be of higher quality compared with those with limited choices in work spaces.

Tune Up Your Recruiting Tactics

Bermiss also worked with Filene on the study, “How Employee Attraction Impacts Employee Retention,” which examines specific forces that might enable credit unions to attract higher-quality applicants. The study examined one credit union’s historical applicant pool data to tease out correlations with the credit union’s employee retention experience.

While the results of this study were specific to this one credit union (you’ll have to read the report!), a key insight was credit unions can glean valuable information from tracking their own HR data, such as turnover rates for specific groups within their organizations. This data can provide meaningful insights suggestive of possible larger human capital issues within the organization.

Tap Your Alumni Networks

A novel idea raised at a research meeting held at the University of Texas-Austin identified former employees (or alumni) as effective recruitment resources. Alumni groups are commonly practiced; LinkedIn, for example, hosts over 118,000 alumni groups, very few of which are officially linked to an organization, which means users are creating them voluntarily. Alumni networks can offer many benefits to credit unions, including hiring assistance, sourcing useful information/talent, referring members and serving as brand ambassadors.

Develop Your Innovation Competency

Outside of research, Filene has learned a great deal about talent development through our field work. Our best-known initiative is the Filene i³ program. This unique program identifies high potential credit union executives, provides professional development training on emerging skills such as new product development, agile methodologies and strategic doing, and then sets them loose on a variety of consumer, industry and/or macro problems in consumer finance.

After 14 waves of i³’ers we’ve noticed a significant proportion – more than 30% – of program alumni go on to become credit union CEOs (and a few go on to start their own businesses, too). While we have to be careful about cause vs. correlation, we have heard from Filene i³ alumni (there’s that word again!) that developing competencies in “innovation” has helped differentiate themselves as leading talent in their credit union and industry. Now would be a good time to mention that we are recruiting our 15th wave of i³’ers, so if you are interested in developing your innovation competency, now is the time.

Nurture Your Young Professionals

Another Filene project, The Cooperative Trust, has taught us a great deal about the war for talent. The “Trust” is best known for its collection of conference crashes whereby young professionals can attend (or “crash”) a variety of industry meetings at no charge thanks to a host of industry sponsors. The crash events enable professionals early in their career to gain exposure to the industry’s influential players, critical issues and future needs.

This may not sound like a ground-breaking concept for individuals later in their career, but the exposure crash events provide to young professionals is transformational. Don’t take my word on it, listen to what Antoinette Morton, an accounting manager at Educational Systems Federal Credit Union, had to say about her recent experience at one such event: “The best word to describe the entire experience is: Transformational. When I arrived at my first crasher session on Saturday, I had no idea what to expect. I knew we were there to learn about advocacy and to network, but the experience went beyond those expectations. I gained knowledge about the credit union industry. I learned more about being a leader and my role in the credit union movement. By the end of the week, I also had a deepened sense of purpose.”

That’s powerful stuff for “just attending a conference.” In addition to crash events, The Cooperative Trust has an active, online community of 1,000 credit union professionals where they discuss issues ranging from operational issues to member service topics.

The war for talent is only similar to a real war in that it takes a strategic approach to win. But it is a bit of a misnomer in that it is not a gruesome battle where one side walks away a winner while the other side loses. By being purposeful with all your assets and resources, understanding your desired talents’ needs, and giving back as many opportunities as you’re looking to gain through the top talent on your team, credit unions can write their own chapter in the book published nearly 20 years ago, detailing for other industries just how well they did win the war for talent.

George Hofheimer is EVP/Chief Research and Development Officer for Filene Research Institute. He can be reached at 608-852-4632 or georgeh@filene.org.