Engage The Next Generation Of Cooperative Leaders

How California’s First Financial turns inexperienced job seekers into the torchbearers of its brand for years to come.

 
 

If you’re having trouble creating a sustainable pipeline for cooperative talent, you might not be casting a wide enough net. First Financial Credit Union ($438.4M, West Covina, CA) has increased its employee base by roughly 9.2% year-over-year, according to Callahan & Associates’ Peer-to-Peer analytics. As of second quarter 2013, the credit union has grown to 141 full-time and seven part-time employees, 14 mid-level managers, and a 14-person executive team. But this credit union isn’t just hiring qualified employees for the jobs it has today, it’s also investing in young or inexperienced candidates with a fresh perspective and giving them a chance to make a mark in the years ahead.

Through its Polu Nalu, meaning “Blue Wave” in Hawaiian, management training program, the credit union attracts recent college grads without a financial background, and — after one year of vigorous training and boots on the ground experience — puts them in the driver’s seat in a branch or mid-level management capacity. When the credit union launched the program in August 2012, it received more than 200 resumes, interviewed 47 individuals, and hired five employees. Today, the first Polu Nalu class is graduating into supervisory roles, and the credit union is already eyeing a second iteration for the future. Along the way, First Financial has learned some key lessons about what attracts desirable candidates to a credit union and what motivates employees to stick around.

Experience Isn’t Everything

Approximately 40% of the workforce at First Financial is Gen Y, including the Polu Nalu group. One of the biggest barriers to employment for this group in the current market is a lack of relevant work experience. So an institution that allows individuals to get a foot in the door — then prove their worth — is a welcome change for many job seekers, especially the young.

According to the Bureau of Labor Statistics, individuals between 20 and 24 years old face a 13% unemployment rate, nearly double the national average. And 25- to 35-year-olds have at least a 2% higher unemployment rate than any other age demographic.

“With this management training program, we wanted to take a more inventive approach to the hiring process and look for attitude over experience,” says Gary Skraba, the credit union’s senior vice president and chief administrative officer. “We want individuals who are eager and positive and who have the ability to learn. Because we have a great employee development program, we feel confident we can teach them everything else they need to know.”

Look Outside The Industry For Talent

Many new hires at cooperatives are converts from the banking industry. And although these individuals might offer expertise, they also run the risk of brining over habits developed specifically for the for-profit space. That’s why First Financial didn’t put itself in a box when it came to candidate selection.

“We wanted to have an opportunity to really teach our new hires about member service as the foundation of everything they do,” Skraba says. “That’s much harder to do with employees from a bank.”

Regardless of where employees come from, leadership roles still need to be earned rather than given. To facilitate this, Polu Nalu employees spend much of their year of training working on the teller line, in the call center, and in the back office, getting a hands-on perspective as well as an eagle’s eye view of the institution as a whole. 

“These employees have to understand what each and every department does, how they do it, and why they do it,” Skraba says.

This helps prevent a siloed mentality when that employee is eventually placed in a singular branch or within one part of the operation. At the same time, the credit union is conscious to mirror its investment in external employee acquisition and training with internal investments in employee development.

“Whenever possible, we prioritize promoting from within,” Skraba says. “We have training programs and other opportunities for advancement in all of our different departments.”

Pay According To Potential, As Well As Performance

Remember the saying “dress for the job you want, not the one you have?” Credit unions might want to follow a similar approach when it comes to employee compensation.

Low-paying internships or trial periods automatically exclude those individuals who have families, school bills, and other financial obligations. That’s why First Financial makes a hefty investment in its management trainees right off the bat.

“We wanted to provide a fair salary for these Polu Nalu employees, even while they were still developing their skills,” Skraba says.

As of 2Q 2013, the credit union has increased salary and benefits for all of its employees by 18.15%, bringing it above average for its peer group. Yet the credit union views this as a critical investment in securing not only the talent but also the loyalty it needs to thrive long term.

So far, the approach seems to be working. Although loan growth remains challenging in this competitive market, midyear net income per employee topped $16,000 versus a peer average of $12,000 at similar-sized institutions. And according to the credit union, it has an average employee retention rate of more than seven years compared to an industry average of four.

Invest In A Happy, Healthy Life

Money might be important to employees, but credit unions still need to be a responsible steward of their members’ funds. Luckily, young employees — and increasingly, employees of all ages — are reporting that the type of work they are doing and the work life balance their employer provides is just as or even more important than their base compensation. At First Financial, these benefits include subsidized gym memberships, reimbursement for smoking cessation products, and paid time off bonuses based on annual milestones with the institution.

When employees are happy, members are happy, too, and Skraba credits these investments for the 97% approval rating recently achieved in one of the credit union’s annual surveys.

“We’re looking to not just invest in our employees from a financial perspective but also increase their satisfaction with their situation overall,” he says.

 

 

 

Sept. 30, 2013


Comments

 
 
 
  • Great article. It is encouraging to see this type of creativity and investment in the CU industry. It seems it is always the mid-sized CU's that are pushing the envelope and ushering in new trends. What are the top 20 CU's doing in this regard?
    Anonymous