The average cost of a bad hiring decision equals about 30% of the individual's annual salary, according to U.S. Department of Labor estimates. On a $60,000 salary, that translates to an $18,000 hit.
Several such losses can quickly damage a credit union's bottom line, which is why smart hiring is one of the most important ways for cooperatives to keep their operating costs in check.
In 2012, Affinity Federal Credit Union ($2.3B, Basking Ridge, NJ) chose to improve communication between its business units and the project management office by creating the new role of project manager. Today, these key individuals serve as effective liaisons and leaders for the implementation of cutting edge projects.
Here, Catherine Ricker, vice president of human resources at Affinity, talks about how credit unions can create new positions and ensure they hire the right people for the job.
What is your hiring process like?
Catherine Ricker: We have a centralized human resources department. Depending on the position, a different team member would handle the hiring. For positions of vice president or above, I would be the recruiter.
CU QUICK FACTS
Affinity Federal Credit Union
data as of 12.31.14
HQ: Basking Ridge, NJ
12-MO SHARE GROWTH: -1.02%
12-MO LOAN GROWTH: 0.10%
I also have an assistant vice president of Human Resources who handles associate vice president-level roles, a senior manager who does the majority of overtime-exempt management roles, and a Human Resources Generalist who does member-facing, nonexempt positions. We determine the best venues to solicit resumes, receive them, screen them, and send the ones that meet our standards to the hiring manager who then narrows the candidate selection down further. After that, the recruiter conducts the first interview and then qualifying candidates go to the hiring manager, who conducts the second interview.
What does human resources look for in the first round of interviews?
CR: Affinity has core competencies — skills, knowledge, abilities, and behaviors — for each position we screen for. Every employee also must be ethical, engaged, committed to providing excellent service, and possess the technical skills to perform that job. We also have career and job-specific requirements with the hiring manager. Then, using that criteria as well as the job description, we create a profile of the kind of person we're looking for.
What guides the interview process?
CR: Working with the hiring manager, we create competency-based interviewing questions for each position. Our database includes more than 100 competencies — i.e., good communication skills or project management experience — that the hiring manager can choose from and identify as the most critical. We also have questions that can be asked to get at whether a candidate has those required competencies.
It's easy to screen for education, experience, and certifications. The competencies, however, they are more difficult to assess.
How does human resources work with other departments to create new positions?
CR: The Human Resources team works very closely with the hiring manager to create new positions. We assist them with creating a job description and determining the competencies for the role. We also assist them with justifying the need for the new position or establishing the return on investment.
What are the complications associated with filling a new position?
CR: It's more challenging to fill a new role. Credit unions are not-for-profit, so any time we hire a new position we want to ensure that our members' money is spent wisely.
Hiring managers have to provide, often in writing, a full accounting of the business case for the position. Compliance is probably a great example of a position we created out of necessity. Because new regulations are becoming more frequent and complex, we needed to hire more compliance people to keep up with those changes. Same thing with enterprise risk management. We needed to fill those jobs to mitigate risk and ensure that proper controlls. So that need was how we justified new hires.
Then you have positions that just produce good returns. Maybe it's someone in business development or an additional lender, but it's a position that can really add value by generating income.
And human resources will help hiring managers make the case for that position?
CR: Absolutely. We'll help them with organizational design as well as review their department's structure and make sure they have the right talent for the roles they need.
You recently created the role of project managers. What do those people do?
CR: They are the liaison between the business units and the project management office. They analyze business processes and implement projects, often those requiring the integration of technology. Project managers participate in the design and testing phase, facilitate project requirements, work with other departments to implement change, help the project team develop and document test cases, oversee the RFP process, and analyze business processes through interviews, work sessions, modeling, and procedure development.
How were those responsibilities handled previously?
CR: Each department used to address them separately, usually via subject matter experts, but they were trying to do this work in addition to their day-to-day responsibilities.
What is the benefit of having project managers?
CR: They have greatly improved the number of projects we complete on time and within budget because project managers create a repeatable, efficient process for managing projects. They have been able to standardize the organization's workflows as well as use technology to resolve business problems and improve service.
What advice would you give other credit unions looking to create a new position?
CR: My advice would be work with your human resources team to build the case for why the role is necessary, whether it's going to produce a direct return on the investment or fill a need. You need to do a lot of research and explain in writing how it will add value to the organization or meet a particular goal.