Jul 1, 2011 by Tim McAlpine Fired up for life or just for now?
Credit Union Management Magazine
Why do young CU stars leave the industry?
There is a vocal and growing online community of fired- up young people who are super passionate about credit unions. Many are communicating on Twitter, have entered the Next Top Credit Union Exec challenge (www.ntcue.com) or are members of the Crash Network (www.crash.coop).
There is both a positive energy—and a palpable sense of frustration. In fact, I’ve noticed that a bunch of the young folks I follow on Twitter have moved on from the credit union industry. I find it curious how people can go from “I am a credit union lifer—let’s change the world” to “I’ve taken a job with ABC Company—I wish you all the best” within a matter of months.
This observation has raised a number of questions in my mind, including:
- Is this different today or is it just the publicness of social media that makes it seem like a growing trend?
- Is it just opportunity and money or is there something more to the story?
- Is it an issue with the credit union industry itself and how it treats its young leaders or is it a more general problem of big, but young, thinkers in lower roles trying to get their ideas heard higher up? Young employees across industries experience this to some degree, but perhaps the credit union industry is particularly guilty.
To see if I could spot some patterns, I reached out to a number of young professionals, including those who have left and those who believe they are in the credit union industry for the long haul. Here’s what I found out.
I’m Out!
“I wanted to stay, but I had to better myself.” This is a response from a young male marketer who recently left a $90 million/13,000 member credit union for a career in another industry. He asked to be anonymous for this article. “We see this huge opportunity to turn this very archaic industry into something huge, but we all see the same brick wall from our credit unions. I reached out to my state association to help talk about Gen Y issues and they ignored me. When they had their annual conference and had the Filene Research Institute people there, everyone acted as if the topics about younger members has been something they have been working on forever.
“I decided I wanted to move into a leadership role at another credit union but this proved to be more difficult that I thought. I reached out to so many contacts I met at conferences. I found that the credit unions that could use new ways of marketing had managers that were lifers and were not going to go anywhere. How do you sell a credit union on new ideas when they were never looking for them in the first place? I spent almost a year sticking it out at my credit union waiting for an opportunity to come along. I just had to give up. I was afraid I was going to be stuck in a position being a lackey forever. I really didn’t want to leave the industry but it was a life decision for me to better myself and to take my talent to a place that it could be used effectively.
“I’m mobile and it was time for a change.” Younger people are more mobile and tend to move around more than older people. This has been true for generations, but today’s young people seem to be even more mobile. They are trying to find their own path before settling down, getting married, having kids and buying a house. Without these permanent ties to a community, young people are far more likely to leave their job to move to another part of the country.
This response is from a young woman who’s father has been a credit union CEO for nearly three decades. She worked at a credit union through college and beyond and has now moved on to a different city and a position with a large post-secondary institution. “Sometimes no matter how much you love and adore your family, you just can’t stay in the city you grew up in. You have to spread your wings a little bit and attempt to follow your own calling.
“When I was in college, one of our branches nearby suddenly needed a part-time teller. Once I started, I loved it. Early on, I realized I was the only employee who could speak Spanish and I knew I had to fix that. Credit unions serve communities and I realized we were accidentally ignoring a large community of people. I was determined to give many of our underserved families access to financial services and my credit union was the perfect partner for this. For the next three years, I was the champion for our Spanish-speaking members and we experienced tremendous growth.
“But it was almost like I woke up one day restless and ready for a new challenge. I realized that my credit union now had bilingual employees, systems in place to serve immigrant families and strong relationships with the community organizations that support underserved communities.
“I truly loved my job and making that decision to leave was heartbreaking, but right at the same time. My move wasn’t about my credit union doing anything wrong, rather it was time for a life change. I wanted to live in a bigger city in a warmer climate that had more opportunities and activities. You might ask why I didn’t accept a job at a credit union in my new city? I looked, but didn’t see anything that jumped off the page as the perfect opportunity for me. I found that opportunity in a new industry and I am looking forward to the challenge. Who knows, maybe this job will make me better for another credit unions someday?”
“We aren’t like our parents, stuck in a rut for our whole life.” Part of the issue is generational. Baby Boomers (those aged 48 to 65 in 2011) have traditionally stuck with a single industry and with one or two companies for their entire career. Today, it’s a different story as members of Generation Y (those aged 17 to 31 in 2011) are setting sail on a career that will span multiple indus- tries and many companies.
Ben Janzen, stewardship in action advisor at $800 million/18,000-member Mennonite Savings and Credit Union (mscu.com), Kitchener, Ontario, is enjoying his position with his credit union, but ponders, “I wonder if the accessibility to information, the mobility of the workforce and the global awareness of a multitude of complex issues leads some of my generation to say, ‘I’ve contributed to the tackling of these financial issues; maybe I’ll tackle something else for a while; the world needs me!’ We are a generation that has been told that we can do anything and everything (whether that’s true or not) and we have a pretty high opinion of our skill set. We see that we can contribute to lots of different areas of business. It is difficult for us to stay in one place for life when we feel that we have so much more to give. We can throw ourselves into something full force but not be concerned when we think we may be needed or wanted more in another opportunity. We have been told that we are going to have five plus careers in our lifetime so we see the change as just part of life. We aren’t like our parents, stuck in a rut for our whole life.”
“My credit union doesn’t behave like a credit union.” Matt Davis, applied research, innovation implementation director at the Filene Research Institute (www.filene.org), Madison, Wis., considers himself a credit union lifer. However, Matt sees a disconnect that may be driving young people out of the industry. “I’m now in my eighth year of credit union service (I just turned 32). What has always excited me about working for credit unions is the belief that we’re different. I’ve liked the idea of being smaller, more nimble and more interested in helping people than traditional financial institutions.
“One thing that has been frustrating for many young people about the current economic environment is our definition of action in a time of crisis, and the speed with which that action is taken. The bill of goods that has been sold to young credit union professionals is that our model puts our members first (and profits last). When the economic collapse occurred, and the general credit union reaction was one of retrenchment, not a redoubling of efforts to help members, it shouldn’t be surprising that many of our brightest young stars were taken aback. I understand the need for profitability and efficiency. I also understand the struggles of the traditional credit union business model. What’s hard to understand, however, is why our response to the economic collapse has been so similar to that of the banks we were told had business models that were completely foreign to ours.”
“I love credit unions, but can’t stand my credit union.” Brent Dixon, young adult research advisor at the Filene Research Institute and the creator of the Crash Network, has firsthand experience with many of the credit union industry’s passionate leaders. “The thing that excites me the most and keeps a fire in my belly for this industry? What credit unions can be. What we’re capable of. It’s easy to see this and be swept off our feet by looking at credit unions that are living that right now. Groups driven by thick purpose and value like Vancity (www.vancity.com), the collective of REAL Solutions credit unions (http:// tinyurl.com/2gu9er), the Young & Free credit unions (www.currencymarketing.ca/young-free) that have embraced the balance of chaos and creativity to bring new voices and perspectives into the conversation.
Credit unions that know who they are, know their mission, understand and invest in their local community and put their members first. They see growth through a different lens, one of deep community impact instead of new accounts for the sake of new accounts.
“My young peers are also attracted to credit union history, where we sprang from the grassroots up to fill a human need and spread like wildfire. It was a time when credit unions were messy and beautiful because they were stitched together by communities with a voracious appetite for solving problems and improving lives.”
Brent continues, “But the reality is, many credit unions today have lost sight of that purpose, suffer from the myopia of immediate stressors, the fear of change, and can’t shake loose from the inertia of what has been. I can’t tell you how many credit union employees I’ve heard say, ‘I love credit unions, but can’t stand my credit union.’
“If someone has a passion for helping people, for impacting their community, for building something true from the grassroots up, but spends every day in an organization that chokes that passion out (or simply ignores it), they’re going to move on to an opportunity to do that elsewhere. That next opportunity might be in credit unions, or it might not. You can only say, ‘let me in, I want to come in, please let me in’ so many times before you need to move on to the next door.”
Ronaldo Hardy, branch coordinator at $400 million/54,000-member La Capitol Federal Credit Union (www.lacapfcu.org), Baton Rouge, La., considers himself a credit union lifer but shares the concerns of many of his peers itching to progress, “There are young professionals who are passionate about the credit union movement and want to be able to make positive changes that will push our industry to the next level. The problem with our industry as a whole is that we are rarely open minded to forward progression and innovation. We are very old-fashioned in many ways, and we celebrate our past victories too long.
“In an industry that is already old-fashioned in many ways, smothering our voice becomes a de-motivator. I think that’s what causes people to leave it altogether. I believe in the possibilities of what we can be, and that’s why I’m committed to the movement.”
I’m in for now, but Frustrated!
“There’s not much room at the top.” This is a response from a 40-something vice president from a $250 million/30,000-member credit union. He asked be anonymous for this article. “I’m not a Gen Y credit union employee but I can provide a somewhat frustrated Gen X perspective on opportunities for career advancement within the credit union industry. Many of my peers are at the same stage of their career—primarily middle management and some at an AVP or VP level. Credit unions are driving young talent out of the industry because the opportunity for upward advancement has been greatly diminished for three reasons.
“First, credit union executives are staying longer in their jobs because their retirement funds have been reduced and their financial security threatened given the market crash a few years ago. Almost half of our senior management team extended their retirement dates over the past three years. Many are now planning to work until 65 or even 70. If fewer VPs and SVPs retire, there’s less movement at both the management and senior management levels. This demotivates up-and-coming talented individuals.
“Second, credit unions have been forced to become far more lean which means fewer management and VP positions. Credit unions are reducing their full-time head count through attrition. The good news is that they are not conducting layoffs but the bad news is if a VP manager does leave, the duties are simply reassigned within the organization. Senior teams are far more conservative given the current financial pressures on a credit union’s bottom line and, as a result, are much less willing to take a chance on an unproven manager or VP.
“This is further compounded by high unemployment rates providing a large pool of talented and highly experienced individuals to choose from. I’ve observed on numerous occasions positions being awarded to an out-of-work banker with 30 years experience instead of an up-and-coming talented credit union Gen Y employee.
“And third, more and more credit unions are merging. This, once again, reduces management and senior management opportunities. These credit unions will have twice the number of people needed in these positions and will spend the next five years reducing these management and senior management teams. Again, highly demotivating for any up-and-coming talent.”
“The saddest thing about the credit union system right now is it’s inability to articulate a vision.” The credit union philosophy definitely rings true with young people seeking more than just a job but it can also lead to the frustration that many young people are feeling today.
An anonymous young credit union professional in his 30s from Canada adds, “There remains a strain of idealism in the credit union system, and idealism is a young person’s game (for the most part). Sometimes credit unions consciously encourage this idealism, but more often is it implied or inferred and it’s too often bred from inferiority complexes. ‘We may be small, but we’re different!’ It’s natural to ask why you’re different, and it’s natural for young idealists to want to believe that those differences matter. Over time idealism naturally fades as real life—mortgage payments, for instance—intervenes.
“It is the responsibility of senior credit union leaders to create a sense of mission or vision that can feed and sustain the idealism. In Canada, this idealism has essentially evaporated. Our credit unions operate profitably and professionally, but our operations are bland and undifferentiated as we navigate the unclear cultural relevance of being a credit union. Perhaps our future success may come from revitalizing the concept of the credit union, or it may come from independently choosing an exciting (and differentiated) mission that can feed the energy and idealism of our young employees.
The saddest thing about the credit union system right now is its inability to articulate a vision for cooperatives that’s culturally relevant for our employees and members.”
