By Audra Hedberg, PHR, PHRca, Vice President of Services
Employment laws have become increasingly complex, requiring greater expertise and specialization from HR professionals. Finance is no exception; the Society for Human Resource Management found that financial services workers had the second-highest level of job stress, behind the tech industry, and a 32% drop in employee motivation. Credit union HR teams often tackle large projects with limited resources, making it challenging to stay on top of essential HR activities, let alone strategic initiatives. In addition to mastering HR fundamentals, credit union HR teams must address the following critical challenges.
1. Attracting and retaining employees
Remote work has grown significantly over the past few years; however, many credit union positions require employees to be onsite, limiting the flexibility that can be offered. Generational expectations make it especially challenging for credit unions to attract entry-level candidates who prioritize flexibility and now have more employment options.
To offset these challenges, credit unions can adjust their total rewards program and workplace culture to draw from a broader candidate pool while setting current employees up for success. Credit unions can attract candidates just starting in their careers by adopting a boarder use of technology, establishing paths for advancing career goals, and offering increased flexibility where possible. Tailor your total rewards to the demographic you wish to attract and retain with perks they can enjoy in their everyday life. Consider creative offerings beyond healthcare benefits such as flexible work schedules, robust paid time off (PTO) programs, childcare benefits, wellness and mental health incentives, financial planning, and dependent care programs. Adding creative and employee-specific benefits to your total rewards offering can give credit unions an edge in the war for talent.
A recent LinkedIn report on workplace culture found that 86% of millennials would consider a pay cut to join a company with values that align with their own. Establishing an employee value proposition that includes ethical and social commitments is an effective tool for attracting candidates and retaining valued employees. Credit unions are also making strides to improve diversity, equity, and inclusion (DEI) efforts. Many reputable sources, including the Harvard Business Review, have shown that diverse teams are more innovative, perform at a higher level, and have a healthier work culture. While DEI efforts often take time to prosper, there are a few adjustments HR teams can make with immediate effect. Consider offering scholarships, recruiting from diverse job boards, and reaching out to candidates with transferable skills from other industries.
Many Credit unions struggle in the current environment with high employee turnover for certain positions. The cost to recruit and train new employees is very high, making employee retention efforts vital. Credit unions that extend genuine support for employees, prioritize work-life balance, encourage the use of paid time off, offer generous total rewards, and provide opportunities for cross-training and career development see better retention rates and more engaged teams. As the industry continues to grow and change, prioritize recruiting employees that are adaptable and eager to learn.
2. Implementing effective training
Credit unions are experiencing a widening skills gap when recruiting talent and maintaining a high level of proficiency within their teams. This has primarily been fueled by the rapid adoption of technology and automation over the last decade. Still, other factors have played their role leaving HR teams at financial institutions with significant urgency around training and employee development.
Implement cross-training and employee development programs that enable employees to gain valuable skills and a path forward as positions evolve. Define measures of success and ensure there are opportunities for employees to gain valuable experience and skills and to connect their role with the company’s success.
Implement a schedule for required training to keep employees up-to-date with banking regulation requirements, cybersecurity training, and state-specific harassment prevention training. Consider specialized training for managers and employees responsible for workplace investigations.
3. Maintaining HR compliance
Employment laws are changing rapidly at the federal, state, and municipal levels, making maintaining compliance challenging. Pay close attention to legal updates and new laws that require changes to policies and employee handbooks to protect from unnecessary risk. Pay equity laws, paid family and medical leave, sick leave regulations, and workplace harassment prevention requirements are just a few employment law trends that require changes to company policies and employee handbooks. Remember that employee handbooks are not a one-and-done project; review them at least annually for mandated regulatory updates.
Conducting thorough, impartial, and objective workplace investigations is vital for enforcing employment policies, holding employees accountable, and maintaining a respectful workplace culture. A workplace investigation should be triggered when there are claims of harassment or discrimination, reports of misconduct, whistleblower claims, anonymous reports, workplace violence, or safety violations, among others. Workplace investigations are time-consuming and can be extremely complicated to conduct in an appropriate manner. Failure to conduct a thorough investigation can leave an organization vulnerable to detrimental lawsuits, costly fines, and negative media attention, not to mention harmful business disruption. Consider using a third-party investigator for high-risk claims such as harassment or alleged senior-level misconduct, where the organization can avoid the appearance of bias or a conflict of interest with an internal investigator.
4. Creating a competitive compensation plan
The rise of pay transparency and pay equity laws across the country have changed the face of compensation. This is especially true in finance, where the rapid adoption of technology and automation has driven significant changes in job responsibilities. A defensible compensation philosophy and structure has gone from a luxury to a necessity. Employers must maintain internal equity to comply with equal pay regulations and understand regional and industry-specific market salary data to remain competitive in a tight labor market.
Take the time to update or establish an equitable and comprehensive compensation program.
- Start by developing your compensation philosophy. Consider your compensation and equity goals, the role of pay in recruiting and retention strategies, budgetary constraints, and how transparent you wish to be about compensation with your employees.
- Next, define job classifications and descriptions. Carefully review your positions, determine which are exempt and non-exempt using Department of Labor (DOL) and Fair Labor Standards Act (FLSA) guidelines, and ensure descriptions align with the actual duties performed.
- Establish a compensation structure. Define your salary ranges and ensure a system is in place to guide equitable pay decisions that comply with relevant employment laws. Consider how experience, training, competencies, and other factors will be measured to inform new hire pay, promotions, and other pay decisions.
- Finally, review your compensation structure with a pay equity lens to ensure it complies with equal pay laws and best practices. Once in place, remain consistent with your compensation program and avoid exceptions, off-cycle pay increases, and any other pay incentives that would impact the integrity of your compensation program.
Creating or updating a compensation program requires immense attention to detail and is a very time-consuming project. If resources are spread thin, or your team lacks compensation expertise, consider bringing in a third party. An experienced compensation consultant familiar with federal and state requirements and best practices can ensure your compensation strategy is compliant, comprehensive, and aligned with your company’s values and budget.
Credit union HR teams have their work cut out for them, but with the right resources in place, success is well within reach. Half the battle is recognizing limitations and exploring solutions that complement your HR team and the organization’s needs. Once you’ve implemented options to cover the unique HR needs of your organization and have all the HR fundamentals covered, you’ll be able to manage HR confidently and keep your credit union compliant with employment law.
