Watching the economy continue to improve has been a big relief for most of us. But with this positive trend has come a potential drawback for our CU clients. In the past year, the percentage of employees who have sought outside employment has increased over 2011’s percentage. Specifically, in our employee opinion survey projects, we have asked more than 4,000 credit union employees this year if they have looked for employment elsewhere. In response, almost 19 percent of respondents said they had. Last year, this percentage was only 15 percent.
Why the increase? Here’s one theory: When the economy is down, people tend to stay where they are because they want the security or they don’t believe other opportunities exist for them outside the credit union. As the economy improves, however, these employees feel more optimistic about their chances of finding better employment elsewhere and begin to look for those opportunities.
As a follow-up to the previous “outside employment” question in our survey, we also asked that 19 percent of respondents to list why they had sought outside employment. The No. 1 reason for our CU clients was usually either salary or opportunity for advancement.
For the salary responses, it was pretty clear cut: Employees didn’t believe they were paid well enough for the position they held, or they didn’t believe they made enough to support their lifestyle and/or family.
For the opportunity for advancement job seekers, the responses were more varied. Some didn’t believe opportunities existed at all, or felt they were not in a position from which advancement was possible. For others, it was frustration over not being selected for a position they had applied for.
So what can you do? First, it’s important to realize turnover in any institution is healthy and expected. But too much turnover can lead to consequences for the company, such as recruiting/hiring and training costs for the replacement staff and decreased member satisfaction and morale issues with the remaining staff. As such, here are some recommendations in addressing these areas before they become a concern at your CU.
Obviously, apart from raising everyone’s salary significantly, there will always be levels of dissatisfaction with salary. But better communication can keep this from becoming a major turnover reason. How? Most credit unions use salary surveys to some extent, either in-house or through a salary consultant. Many of these CUs, however, do not share the results with staff—even if the CU has impressive salaries compared to other similar groups.
By sharing your salary information with staff (in general terms), you can better educate them, thereby enabling them to appreciate their salaries more in light of what others pay.
Specific points to share can include how the salaries compare overall with peer groups, how salary ranges are developed at the credit union, and how raises are determined. When you don’t share data like this with your staff, they tend to make up their own information. As we have seen in our results, this is almost always to the detriment of the CU.
Opportunity for Advancement
Dissatisfaction with advancement opportunity can be an issue, regardless of the CU’s size. Moreover, even if the CU emphasizes promoting from within, for every position that is filled internally, there are oftentimes three or four employees who are not selected. Those folks tend to feel frustrated, often to the point of looking for employment elsewhere.
Given the delicate nature of this, better communication again can be used to improve perceptions. For example, when notifying an employee that he/she was not selected for a desired position, it is often best to have the message come from one central location—preferably, human resources.
During the course of the conversation, the HR person can suggest that, together with the employee, they develop a written action plan of goals to focus on, so that when the next opportunity comes along, the candidate will be better equipped for the challenges.
As the economy continues to improve, we expect to see the percentage of outside job seekers continue to rise. Taking steps to ensure appropriate strategies are in place, especially in the areas of salary communication and advancement opportunity, can relieve many headaches for your credit union, oftentimes before they start.
Kerry Liberman is the president of People Perspectives LLC, a consulting firm that specializes in employee opinion surveys and internal service surveys for credit unions. She can be reached at 206.451.4218 or email@example.com.