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Last month, we reported that credit unions are being affected by the socioeconomic challenges of lack of skilled staff and cost of living in their communities. This month, we asked select credit unions across the country: How are you affected by these staffing challenges and what can be done to combat it? Below are responses from five credit unions in vastly different regions: Denver Metro, CO; Tucson, AZ, Pocatello, ID; Silicon Valley, CA; and Washington, D.C. who have shared their pain points and what they are doing to overcome these challenges.
Finding qualified workers for our industry can be quite challenging in the Denver area during this time, as workers tend to expect a larger salary range to offset the high cost of living. In recent years, even our entry level positions have increased substantially in terms of starting wages and there is a struggle to remain competitive. Small credit unions like ours tend to find it a challenge to balance a lower starting wage than banks, with fewer opportunities for growth as well. However, there are opportunities that our industry, and specifically smaller credit unions, can provide to offset these factors. Employees highly value an environment which supports continued educational growth, and an organization who cares about them as individuals with different needs. A work environment which fosters healthy working relationships, focuses on putting employees first, and empowers them to do a great job every day will go a long way towards closing that gap and ensuring staff happiness and credit union success.
- Krista Burnell, SVP Organizational Development
Tucson has a good cost of living, however salaries are lower than in other states (95% of the national average) so some employees from out of state will not take this into consideration when coming from areas with a high cost of living. The number of qualified applicants has not been at record levels either. In order to combat these issues, we have focused on three main projects: Company Restructure, Training & Development, and Compensation.
The restructure of our company has required us to focus on our current employees and find the best job “fit” for them. For example, we had member service employees taking phone calls, completing loan paperwork and trying to assist our members in person. There was so much that encompassed the MSR position that training could take up to a year for a new employee. We determined that splitting the position in to three separate positions was the right course of action for us. We now have a separate contact center, loan processors that ensure all the paperwork is accurate and member service reps, that focus solely on the member in front of them now. We found that the employees’ passion lined up with our assessment of their strengths and has been a beneficial adjustment. This restructuring has helped to create one additional entry level position (contact center) which has allowed customer service experience as the only requirement for recruiting. The narrower focus also allows our employees to excel in their positions faster and has provided better career progression options.
We then created a training department (one person) who has been responsible for recruiting and then arranging the onboarding for our new employees. She has created a basic training program where the new employee will learn how to post checks, how to balance a cash draw and how to log in to the system etc., and also trains on the various products that we offer. This has sped up the process of new employees being able to complete their work with confidence, while allowing us to hire employees that have not had as much CU or financial industry experience as we would like (if any).
Finally, we have focused on our compensation. I created a strategy that calculated the amount of experience each employee had and developed a percentage-based plan whereby the amount of experience in each position determines what percentage in the range they should be. The improvement of our compensation strategy has allowed us to begin offering more competitive starting salaries as our current employees are equally compensated. We are still not the highest paying employer, but we are also able to offer great benefits, and our positive culture has created an increase in referrals.
There are other factors, such as focusing on culture, engagement and retention. As long as employees feel valued, understand that their voices matters and are constantly learning, then you will have a workforce that doesn’t want to leave, that continually helps the credit union to grow and makes the members happy to be a part of your community.
- Marianne Scarzello, Human Resources Director
Over the years, Idaho hasn’t been immune to the lack of skilled workers and the impact of the cost of living outpacing salaries. Idaho is one of the fastest growing states in the nation so there are many employment options available and it’s a real struggle to fill certain positions. The competition is fierce locally as well; there are many bank and credit union employment options for workers, so you really have to sweeten the pot to try and attract that skilled labor force. The way we try and bridge that gap is to offer an exceptional working culture and work-life balance. That seems to be very important to a lot of employees and potential employees. That “employee-first” strategy has had a positive impact on retaining and recruiting top talent.
- BJ Fillingame, VP of Marketing
With the entire labor market tightening, the demand for accountants in particular has been fierce. The BLS is predicting that the demand for accountants will increase 6% or more through 2028, in line with the average growth rate for all occupations.
"We constantly hear about how challenging it is to find skilled accountants to staff credit unions," says Diane Parham, CFO of CU Service Network and head of Outsourced Accounting Services. "Turnover is high, and new employee training tends to be quite long due to the unique nature of credit union accounting - often six months before the accountant is fully independent."
As a very small employer in very large Silicon Valley, competing for talent is virtually impossible so I have to rely on virtual solutions! The going rate for qualified accountants, controllers and CFOs in the greater San Francisco Bay area is more than my CEO salary and, in many cases, even double my compensation. At best, I have found my budget, both here and at my previous, larger CU, only permits me to hire entry level accounting personnel and those candidates have no relevant experience and typically do not have even high school level writing skills. This problem exists for all management level openings as well as lending department positions, but the accounting positions are most extreme.
The cost of living is an issue for us so much so that employees typically have very long and unreliable commutes since they live in more affordable areas 60-90 minutes away. I’m fortunate in that my current staff all reside in a roughly 30-minute radius from our office, but nearly 100% of my candidates for openings reside much further away. I also have a fairly unique issue relating to the cost of living. My non-exempt staff are all covered under a collective bargaining agreement, and their bay area COLA increases over the years have caused their hourly wages to end up well above market for their positions, and limits my compensation budget for new hires.
- Christine Petro, President/CEO
Washington is right behind San Francisco and New York as far as housing, transportation and day care costs. You read about it all the time - people having to work additional jobs to make ends meet. It's a very challenging city when you consider that the cost of living keeps going up.
The regional salary demands make it difficult for small credit unions to hire a very strong accountant. Recent accounting graduates are asking for compensation that far exceeds the budget of many small credit unions. Furthermore, Washington is a very transient city, which lessens the number of skilled workers that a credit union our size can attract. We have to compete with the government and large companies in the surrounding areas, Virginia and Maryland, which have great jobs. These are reasons why we outsource our accounting to CU Service Network.
Our credit union is small - And I'm fortunate to live in the city and much more fortunate to have bought my house 20 years ago. I have an easy commute, but for most of my staff, they come from nearby Virginia and Maryland and have to deal with the traffic, which can sometimes be an hour or even two hours depending on weather. Because of this hardship, the credit union provides a travel voucher. We also provide an array of benefits. I make an environment that's team oriented. I try to alleviate some of the stress employees have working in an ever-changing city.
- Michael Ray, CEO
We hope that this report sheds light on the challenges that many credit unions are facing and proves that your credit union is not alone in finding, and keeping, the talent you need to operate your organization.
Many credit unions are unaware of the outsourcing options that have recently become available in the market. Did you know that we offer outsourced accounting, the same service that Georgetown FCU is using, as well as a variety of other solutions?