In the coming years, the American workforce is set to experience a major shift. As baby boomers retire, younger generations are poised to take the reins in virtually every industry.
This transition is smoother in some sectors than others. In the world of credit unions, it’s becoming a somewhat bumpy ride. This is an era of change, meaning workplaces are filled with a mix of employees at the end of their careers and those who are just beginning. Here’s a closer look at how the new generation of leaders is already shaping the credit union industry.
In the world of credit unions (and in most other industries), C-suite leaders are older people. These leaders have begun to leave en masse — many baby boomers have reached retirement age or are close to it.
Why does it seem like the older generation is leaving the workforce all at once? Some of that has to do with the COVID-19 pandemic. In many cases, executives nearing retirement age opted to stay on through the pandemic to help their institutions navigate unprecedented challenges.
Now that things are more or less back to normal, those leaders are finally retiring — along with those who have just reached retirement age. Is there room in the workplace for both generations at once? Yes, but as is to be expected, there’s some conflict between the two.
For example, younger leaders who want to advance are finding it challenging to do so. That’s because many credit unions are still filling their senior roles with people at the tail end of their careers. The organizations benefit from these employees’ experience, but as a result, tomorrow’s credit union leaders lose out on valuable opportunities for growth.
That’s not to say that the workplace is all conflict, however. When they’re willing to be open to other perspectives, the older and younger generations can still learn from one another.
While the millennial and Generation Z professionals entering the workforce aren’t a monolith, the credit union industry is beginning to see a trend in the changes new leaders are hoping to make.
Many younger leaders prioritize diversity, equity, and inclusion. For instance, if a credit union is located in a racially diverse area, many younger professionals will make an effort to ensure the makeup of the board of directors accurately reflects that population.
Why focus on diverse staffing? The newer generation of leaders places a good bit of value on creative thinking.
Many younger financial professionals believe that by including the voices of people from many different backgrounds, credit unions will be better equipped to serve their local communities.
While money is far from the only thing on new credit union leaders’ minds, many of them are working for a world where wages keep up with inflation. And as it turns out, raising wages may be necessary to keep credit unions afloat.
A recent survey of human resource experts and leaders in the financial industry found that there were three primary reasons employees left the finance sector:
Of course, wages do increase some each year. However, especially in recent years, those raises have generally been less than the cost of living increase. This means that in terms of purchasing power, credit union employees are actually being paid less year over year.
Lower wages complicate things somewhat for younger professionals seeking experience. A common career development suggestion is to spend time working as an executive with a smaller credit union. In a smaller company with fewer staff members, an executive can learn a little bit of just about everything.
However, the pay for these jobs is often much lower than the pay at larger institutions. In some cases, that pay cut might make the difference between getting by and not being able to pay the mortgage.
The ongoing dialogue about wages may seem never-ending, but there’s a lesson here for current credit union executives: if you want to draw in top talent when hiring a younger executive, make sure that your compensation package reflects the recent cost of living increases!
The new generation of leaders also places great importance on work-life balance, and they want workplace benefits to reflect that. Paid time off, mental health support, family leave, and flexible work hours are a few examples of how a workplace can help its employees stay healthy and balanced.
Benefits like these also show employees they’re appreciated and valued, and that’s always a good thing.
Many younger professionals are concerned about supporting local communities. As a result, some younger credit union leaders are building more of that support into their institutions.
For example, Monica Belz, the youngest-ever CEO and president of Hawaii’s Kaua’i Federal Credit Union, has opted to give priority in hiring to those who have an interest in helping the community the credit union serves.
It might seem odd to have this kind of humanitarian focus. However, it’s in line with the mission of local credit unions.
Many of them help and support local communities in a number of different ways:
Of course, credit unions also generally offer lower interest rates than big banks, so they can help members (and even those who are rebuilding credit) save money over time.
They also make it easier for first-time homebuyers to purchase a home — even if they have a limited income.
The credit union industry is currently in an era of massive change and uncertainty. While the next generation of leaders has an idea of what changes to make, baby boomers and newer leaders work together for now. The outcome remains to be seen — the near future could see some interesting and unexpected shifts.
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