Unemployment in Credit Unions

In case you’ve been living in a cave, which the credit union industry can be at times, our economy stinks. Just go look at your 401K statement, at least what’s left of it. And this go around, the credit union industry has not been spared. With the massive problems that the credit crunch produced on a national level, it was only a matter of time until the crunch hit corporate credit unions. Impairments and assessments are just some of the four letter words being thrown around by credit union CEO’s, CFO’s, and the occasional CMO. Once these assessments began impacting the bottom line of credit unions, the layoffs were soon to follow.

Credit Union Employees to IncomeIn the graph to the right, the orange line is income and the blue line represents the number of employees in the industry. As you can see, the industry has been experiencing many layoffs. In typical credit union fashion, they tried to hold off on layoffs hoping that this recession would be short lived. After 6 straight months of massive revenue decline (the industry lost $3.2B in the 1st quarter of 2009), the layoffs began coming and have continued well past the turning point of the income crunch. Roughly 3,000 people have been laid off in just over a year.

While these layoffs represented less than 2% of the total credit union workforce, many high quality people have been displaced and flooded the job market with very experienced candidates. With layoffs continuing, finding a job was proving to be incredibly difficult, even for these experienced people. What made this recession different however, was the new tools available to credit unions, laid off employees, and recruiters that hadn’t been available before.

Jason Lindstrom AdJason Lindstrom was the Chief Political Officer for a large credit union in California and was laid off the end of last year. So what is a veteran of the CU political process, with nearly two decades of experience, to do when he’s laid off? Try to put an ad in the CU Times is the correct answer. Together with Matt Davis, they put together a campaign to raise money for Jason to place this ad in the CU Times. Additionally, Jason has been active on Twitter and his blog, all tools that barely existed less than 5 years ago. With all these tools at his disposal, Jason has been able to create quite the conversation around him and his abilities, getting his resume in front of people that normally would not have been exposed to it.

Another great example is Carla Day. She too was laid off from her credit union, but has turn adversity into opportunity. Carla created, to my knowledge, one of the first internet radio talk shows specifically about credit unions called CU Chat Up. She has interviewed probably over 100 people by now and has generated much word of mouth around herself and CU Chat Up. Similar to Jason, Carla is also active on her blog and on Twitter, expanded her audience, and pool of potential employers, even more.

Many tools exist today for the ranks of the unemployed that are providing new opportunities to demonstrate their experience and have their resume, and themselves, seen in front of a very large audience compared to what was possible only 5 years ago. If you find yourself in an un-or-under employed situation, have hope. All recessions eventually have turned around and hopefully this one won’t be different. Use some of these new technology tools to help build your network and your experience. The massive “flight to safety” from the stock market and other investment vehicles has inflated the balance sheets of credit unions. Once these assets age, the income will begin to catch up, thus stabilizing the bottom line and the capital ratio of many credit unions. Once that occurs, credit unions will being to hire again and fill positions that have been allowed to remain vacant through this economy.

Credit Union Employees To Assets

Gen Y Entrepreneurs

Chris Saad, of Data Portability fame, posted this video on his blog.  It clearly demonstrates what Gen Y’ers think about when they build a company.  I also think that many other Gen Y’ers look for environment like the ones described when they are looking for employment.  And if credit unions can’t attract Gen Y employees, they are probably going to have a very difficult time attracting Gen Y members.

Executive Cross Training

Having been in the CU industry for a few years now, I’ve had to opportunity to interact with more people throughout the CU movement all of the nation.  One thing continues to surprise me in the feedback that I get from people who have recently switched CU’s or recently joined the movement: every CU seems to do it different.

Nearly every time I visit another CU or talk with a C-level executive, I learn something dramatically new about that CU.  This led me to my idea for executive cross training.  Here at our CU, we regularly cross-training front office and back office employees to help educate them in what other parts of the organization does.  One of the things that I loved about my past life at Blockbuster was the fact that new RDO’s (Regional Director of Operations), who oversaw 100ish stores, would start day 1 learning how to be a CSR, or a teller.  They were then, in essence, promoted up until they achieved their position.  This process made sure that the executives of the company still understood how their front line actually works.  Not only should CU’s do this for any new non-branch management, but they should also take some cues from other retail experiences.

The executive cross training program is simple: send C-level employees to other CU’s to work for a month or two at a time.  Let them see how the books get closed every month, how their executive team interacts with their board, and how price deposit and loan products.  It would be as simple as getting a few CU’s to partner and become sister CU’s or something and simply swap execs.  I’ll trade you my CFO for yours.

Executives would get a whole other level of hands on training that can’t be accomplished in a conference and the CU would get the knowledge and experience from other credit unions.  Sound concept?  Would CU’s be too protective of their upper brass to share for a month?

Do strippers strip at home?

I’ve always wondered that.  If I married a stripper, do I get free lap dances at home for the rest of my life or is it the trusty standby, "I’m too tired."?  You’ve all heard the old adage that mechanics have cars that never work quite right and plumbers always have leaky pipes and faucets that drip.  Most people who do something every day don’t always enjoy doing it when the get home. 

What about us in the financial industry?  It is our job to know how credit works for our members, understanding why weekly interest makes more than quarterly compounding, and be able to know why the Fed dropping rates affects us.  But in reality, how many of us have perfect credit or save all that we can or budget properly?  Just because we know how to do these things, doesn’t always mean that someone will apply their knowledge to their personal life. 

I’m a huge advocate of encouraging (making) your employees use the products your company offers.  If employees don’t like what you have to offer, chances are your members or customers won’t either.  So if your employees don’t use your CU as their PFI, how good will they be able to sell your products?  The employees that have the highest insurance sales numbers tend to be employees who have had to use the product themselves.  Why?  Because they have actually experienced the benefits and don’t just have to sell the features. 

Get your employees using your products.  Help them create budgets for themselves, fix those leaky faucets, and invest properly.  If you can make that happen, your employees will automatically take care the members/customers, not with their knowledge, but with their experience.

Successful Internal Promotions

Over the past few years, we’ve done a lot of different types of internal promotions for our employees.  We’ve tried the Get-Away-Today (which was less than stellar), gift cards, movie tickets, days off, a treasure hunt, car wash, jeans day, and Starbucks just to name a few.  So what does it take for an internal promo to be successful?

  1. Fun and different.  Find something your staff like and give it a whirl.  (Our recent Coach purse promotion went great!)
  2. Once you find something fun and different, don’t do it again for at least a year!  The novelty wears off.
  3. You must have the ability to provide at least daily updates for all staff.  Real-time is ideal, but I’m always shocked to hear how poor most sales reporting is in CU’s (mainly a function, or a lacking function, of CU cores).
  4. SMART goals (Specific, Measurable, Actionable, Realistic, Time-bound).  If the goals are perceived as unattainable for whatever reason, they won’t get hit.
  5. Find a way to get all employees involved, not just front-line staff.

Our most successful internal promotion we’ve ever had was dubbed Fantasy Checking.  In Oregon, the Civil War game (U of O Duck vs the OSU Beavers) is quite the big deal.  So in the spirit of the game, we had each of our staff create a Fantasy Checking Team.  We setup a little app on our intranet home page where all employees of the CU picked one employee from each branch and answered a tie breaker question.  Each individual seller, branch, and fantasy team were ranked on the home page for everyone to see and the data was updated every 15 minutes.  We had VP’s, accounting, eft, is, tellers, branch managers, and all sorts of other employees setup teams.  Some of the more proactive "coaches" even called our tellers and FSR’s before hand to see who they should pick and called them throughout the promotion to see what was happening!  At the end of the promo, we had a prize for each branch who hit their checking goal, prizes for the top fantasy teams, and we threw a tailgate party in the parking lot of our administration center.

We blew our goal out of the water and had our largest checking account month in the history of the company. 

Long story short, get all your people involved, keep everyone updated frequently, and make the promo fun and different!

 

 

User generated content @ FI’s

So we’re talking about making a product manual for our staff to have quick reference to all of our product info. Everyone is talking about “manual owners” and who will be responsible for updating it, making it work in conjunction with the other manuals, etc, when I blurt out “what if we did a wiki?” And everyone but about two people said, “What?”

After a brief explanation of what a wiki is, most people got a little defensive saying things like: “We can’t let everyone make changes” or “We’re in a highly-regulated industry. We don’t want people to have the wrong information.”

So how do you combat comments like that? Is it possible to have wiki-based manuals in an FI due to the strict regulations we face? Obviously some things are fixed verbiage dictated to us by regulations, but internal policies, product descriptions, etc aren’t so they seem fair game for a wiki.

We do all programing in dot net with SQL backends, so what wiki would work best in our situation? Can FI’s even do wiki’s internally?

Stealth Innovation & ROWE

I learned a new term tonight, the title of this post, “Stealth Innovation”. I almost laughed out loud I loved it so much. I was reading this article by Michelle Conlin of business week about Best Buy (BBY) “Smashing the clock”. It’s a must read.

Best Buy is dropping the normal 40 hour week for corporate, and soon to be retail, employees. Want to answer email while hunting? Work for Best Buy. How about getting “paid” for following the Dave Matthews Band around? Sign me up!

Here’s a great summary quote of what Best Buy is doing:

“The nation’s leading electronics retailer has embarked on a radical–if risky–experiment to transform a culture once known for killer hours and herd-riding bosses. The endeavor, called ROWE, for “results-only work environment,” seeks to demolish decades-old business dogma that equates physical presence with productivity. The goal at Best Buy is to judge performance on output instead of hours.”

This is also where “stealth innovation” comes in. For fear of having the idea squashed, many managers experimented with the technique, before having it come from the top down. Pretty soon, others from outside the departments that started it want in. And after awhile, there became such a following that it was a natural migration for the company.

I love the term stealth innovation because a lot of initiatives at CU’s, at least our CU, start off very stealthy and at the grassroots level. Sometimes you need to get the rubber band pulled way back and the energy built up before you get the official OK to let the slingshot fly.

Club Med

So my fiancee, I mean wife, and I went to Club Med for our honeymoon last week and was it amazing. Club Med has a very clear vision of what they want their customer experience to be.

If you’ve been to any Club Med, one of the first things you’ll notice is their attention to their customer’s needs and their incredible employees. Their “Chief of Land Sports” not only is in charge of the obvious, but he was in their nightly shows singing, dancing, and acting. The cooking staff even has their own dance! Club Med employees appear to be incredibly friendly, outgoing, flexible, and very knowledgeable about their position. I kept asking myself how can Club Med attract such amazing employees?

Is it the locations? Maybe. We were in the Turks and Caicos islands in the Caribbean, so yeah, the weather was awesome. But Club Med employees move to the middle of nowhere and leave their family behind, and spend most of their time in the village as most don’t have cars.

Is it the pay? Rumor has it pay was only about $200 a week. It’s almost like joining the military, but without the monetary benefits.

Whatever they are doing, I found myself saying they should write a book about how they attract such talented, bi-lingual employees from all over the globe.

I think that a CU conference should rent an entire village out (yes, you can do that) just to study the customer experience that Club Med provides.

where do ideas come from?

I’m always amazed about where I get ideas for new products/management ideas/etc. My fiancee seems to be an incredible source. Not only does she tell me when something sucks, but if I can sell her an idea and she likes it, I know I’m on to something.

Read, listen, chat, socialize, learn. You’ll be surprised where innovation and motivation can come from. Keep that tablet by your bed. You’ll never know when that great idea will come.

Employee Opinion Surveys

Well our first employee opinion survey was recently completed at our credit union. Not surprisingly, “Pay” was the lowest rating we received in all 13 or 14 categories. Coming from a retail background myself, I find the CU pay is, naturally, higher than other retail pay, but lower then most banks in our general market. When I look at the overall market and compare the harsh selling stress in a retail banking environment, I see many people making a transition to the “movement”.

More interesting findings in our survey show that nearly all of our employees love their jobs, the reputation of the CU in the community, and their direct manager.

Some of the lowest ratings were pay and health benefits (spouse/dependent care).

It will be interesting to see if the changes we’ve made to the compensation structure will alter employee opinion on pay. I hear upper management say “they don’t know what other CU’s are paying” and our front-line staff saying “Bill left and went to Community Credit Union for $14 an hour.” Hopefully our adjustments will bring the two disparate views closer together.