Most problems have multiple solutions. Credit union service organizations (CUSOs) face issues that are both similar to and different from those that credit unions encounter. Credit unions deal with consumer members; CUSOs, as business-to-business organizations, generally work with credit union members. They must consider how their solutions will address the business and operational needs of credit unions as well as how their solutions will improve the experience of credit union members. They have to think about the big picture and the details.
Staffing is one area of operations that is critical for both credit unions and CUSOs. Who will hold which roles? Where they will be physically located? How will the organization be structured? These are just three of the questions CUSOs must answer. A CUSO also must address how it will hire employees and organize workflow.
CUSOs have built-in staffing advantages. The pooling of credit union resources affords opportunities such as geographic flexibility. Some CUSOs have a regional brick-and-mortar presence; others hire employees located across the United States and allow them to work remotely.
Unfortunately, not all CUSOs are flush with resources. These organizations rely on ingenuity and efficiency to drive performance.
A look at four CUSOs illustrates the staffing challenges, approaches, and resolutions these distinct businesses face. Credit Union Student Choice, a student lending CUSO, decentralizes its operations and employs talent around the country. Tri-CUE, a data management collective, employs staff with hyper-focused knowledge and the ability to adapt to changing requirements. Member Loyalty Group harnesses the power of its Board, member credit unions, vendor partners, and contractor workers to maximize its potential. And CU*Answers, a Michigan-based data processing CUSO, applies a temporary-to-permanent hiring approach for its programmers, which allows it to fill gaps as needed and vet employees before bringing them aboard full-time.
Each CUSO has different needs and a distinct operations strategy, and each has found a way to make its model work.
When CU Student Choice started its employee search in 2008, it used traditional job postings. When that didn’t generate results, the CUSO took its search national and accepted recommendations from trusted industry contacts. Its goal was to hire the best employees possible and allow them to work from wherever they lived.
The CUSO’s current staff reflects the breadth of its search: Student Choice has employees in Iowa, Dallas, New York, Pittsburgh, and Chicago, among others.
Working from home isn’t for every employee and not everyone can do it effectively, so determining whether a prospective hire can perform outside a traditional office is a critical part of the interview process.
"We want to make sure they’re going into it with eyes wide open," says Jon Jeffreys, president and CEO of the student lending CUSO. Jeffreys makes sure interviewees know that the CUSO is virtual, that they will be working from home, and that it’s a substantial challenge.
The CUSO’s networked operations rely on partners, many of which are also CUSOs, to handle the mechanics of the business. PSCU Financial Services runs the applicant’s credit, CUDL processes the documents, and the school confirms how much money the student needs and alerts the lender to disburse the funds.
The spread-out work process falls in line with the spread-out staff, but there are potential problems.
One downside of the model is the absence of office camaraderie. People feel value and purpose from their place in a physical office, and the CUSO has to compensate for the absence of a shared space. The relationships among staff members are important.
"Our staff has been proactive about talking with one another on an informal basis," Jeffreys says. One best practice for CUSOs without brick-and-mortar walls is to avoid hierarchical thinking. Without a common workspace, employees can benefit from regular informal talks for trust building or socializing.
A common question about virtual staffing is: How does leadership ensure what needs to get done actually gets done?
Fundamentally, Jeffreys is looking for people who can do three things: 1) Perform their job at a high level, 2) Work from home, and 3) Mesh with the CUSO’s culture.
At CU Student Choice, there are no end-of-week emails about completed tasks or phone calls. That’s why the CUSO has hired experienced, talented people, Jeffreys says. Too many processes can be counterproductive and bog down the workflow. It appears as though the CUSO’s model is working because it has almost non-existent turnover.
One way to get hired is to know a lot, but specialized knowledge plus a variety of skills makes a prospective employee even more attractive. That’s how the staff at Tri-CUE operates.
The Colorado-based data management CUSO sprang from an unlikely source.
"The impetus of it was at a sales presentation," says Kent Richard, the CUSO’s president. Three Colorado credit unions were considering purchasing the ULTRADATA host processing system (at the aforementioned sales presentation) and decided to collaborate to decrease their investment risk.
Aside from risk mitigation, the collaboration gave the trio the ability to negotiate as a group and secure what Richard calls enterprise pricing for the data-hosting system, which performs functions from accounting to loan processing to marketing.
"This allows Tri-CUE’s credit unions to aggregate their respective sizes and transaction volume to compete on a pricing level with credit unions well in excess of $1 billion in assets," Richard says. The CUSO can then pass the savings on to clients.
Before the CUSO could help any credit unions, it needed to nail down a staffing model. The leadership elected to look around the country for employees. A national search, which included places such as California and Detroit, was essential because of the sophistication of the ULTRADATA system; the costs of missteps are considerable because it’s difficult to train someone to replace existing staff, Richard says. Plus, CUSO leadership wanted Tri-CUE to be stable and rich with expertise.
The CUSO is now owned by four credit unions (two of the original three were merged and one failed). Today, the four credit union owners are Sooper Credit Union($234.2M, Denver, CO), Warren Credit Union ($364.6M, Cheyenne, WY), Denver Community Credit Union ($218.3M, Denver, CO), and Public Service Credit Union ($1B, Denver, CO).
The CUSO also has four full-time employees. Along with Richard as president, there is an information technology manager, an operations manager, and a senior support analyst. They’re a versatile bunch. Each employee has work-related systems installed on his or her home computer in order to problem-solve or help clients whenever necessary.
"We all kind of do everything," Richard says.
The CUSO’s call center is a perfect example. Each of the four employees takes a shift at the center from 6:30 a.m. until 6 p.m. After hours, the employee on duty carries a pager to receive alerts about service needs.
CUSOs are created to meet a specific need for multiple credit unions, which can breed hyper-focused employees. But the mix of specialization and versatility at Tri-CUE gives it all of the expertise with a helping of dynamism, too.
Member Loyalty Group
Members are the pulse of a credit union.
To get an accurate reading, some cooperatives turn to Member Loyalty Group (MLG), a CUSO that transforms member feedback into actionable initiatives through its use of the Net Promoter Score’s benchmarking and real-time data delivery.
The CUSO launched in March 2008, and its first credit union went online in July of the same year. It is owned by six credit unions and operates as a limited liability corporation.
To get off the ground, the CUSO called upon a familiar resource: its members.
"Relying on the expertise of our credit unions has been really important," says CEO Michelle Bloedorn.
Bloedorn, along with program director Rebecca Secor, serves as the backbone of the CUSO. Each has a credit union background (Bloedorn at Baxter Credit Union, Secor at Educators Credit Union), which allowed for a smooth transition into another sector of the world of cooperatives.
"I didn’t find it that challenging," Bloedorn says of the move from a credit union to a CUSO. That said, she did have to adjust to not having on-site access to assorted departments for operations support. Instead, MLG employs a networked staffing model, which leaves it well-positioned to attract the industry’s best talent.
Bloedorn works from downtown Chicago, and Secor lives in Wisconsin. With plans to hire a third full-time employee in the works, the two oversee program development and make sure member credit unions have the necessary resources to track and report member loyalty information. The CUSO uses contract employees for its analytics and marketing. For accounting and human resources, it relies on two of its credit union partners.
The CUSO also partners with Satmetrix to operate its Net Promoter Operating System and other partners execute other functions.
In totality, MLG’s structure is powerful: Bloedorn and Secor serve as the nucleus and surround themselves with skilled and nimble partners. The CUSO is a solid illustration of the potential gain from mixing small and large. The CUSO marries the passion of its core and leverages partnerships to achieve its goals.
The software programmers are a critical sector of CU*Answers’ staff. The Michigan-based data processing CUSO relies on them to take care of the platforms that allow credit unions to perform at their highest levels.
The workload for programmers is steady, but sometimes the CUSO needs more capacity. So, since the late ’90s, CU*Answers has used a temporary-to-permanent hiring strategy for this sector of its workforce.
One distinct advantage is the clearly defined relationships the arrangement yields.
"There is a mutual understanding that the temporary employee must perform to be offered a permanent position," says Katie Smigiel, manager of human resources at CU*Answers. The practice also minimizes overhead and reduces the negative effects of an employee moving on.
To fill its needs, CU*Answers uses a staffing agency. Smigiel cautions against hastily opting for that route. She recommends long-term thinking (how will the staff and company mesh?) and a frank cost-benefit analysis (employment agencies can be expensive).
"In temp-to-hire scenarios, the most important thing to understand before entering a contract is the conversion fee," she says, in reference to the money paid to the staffing agency should an employee convert from temporary to full time.
"The organization should understand the options available to them through these agencies," she adds. "What will the standard agreement between the two organizations look like?"
Trusting an outside source to funnel employees into a CUSO means giving them considerable power. Smigiel recommends establishing clear expectations for communications and authorization. Ultimately, the CUSO uses the strategy because it works.
"Staffing is strategic and should be viewed as such by the organization," Smigiel says.
How a CUSO chooses to staff, and how well that decision meshes with the rest of its goals, directly informs the health of the organization. It must answer important questions: Will the employees work in a central office or at home? How will workflow move through the business? How should the CUSO be organized? What role does temporary labor play in the business model?
Do not underestimate the importance of staffing decisions. Consider every option and understand the benefits and downsides. When aggregated, it’s the tiny staffing decisions that become the face of the CUSO.