TruStage: How Agile is Your Credit Union’s Compensation Strategy?
The legacy organizations that are thriving in the Experience Age are those that have mastered strategic pivots. From reengineering conventional products to reconfiguring entire business models, the changes these winners are making are all in the name of relevancy with stakeholders.
For credit unions, two stakeholder groups receive the lion’s share of attention when strategists are shooting for relevancy: members and employees. One could argue, however, that nailing the employee experience is the more crucial win for credit unions. After all, people helping people becomes a fairly challenging mission when the people charged with helping are uninspired at work.
Credit Unions Must Attract a New Kind of Leader
Especially now, when top talent has more options for employment than ever before, attracting and retaining high-performing leaders requires a cultural willingness—and an effective plan—for on-the-fly transformation. That extends to an organization’s compensation strategy.
The fact is credit unions with inflexible executive pay and benefits programs are finding it more difficult to attract the right executives to their C-suites. Much of this has to do with the fact that credit unions need to attract a new kind of leader—one that has all the financial services acumen of a brilliant banking executive, yet with layers of soft skills and change agency.
Importantly, the new kind of leader has different—and in many ways, higher—expectations around compensation.
With New Kinds of Leaders Come New Expectations
Aside from being competitive, today’s top talent expects compensation packages to be personalized to their individual values and goals, as well as flexible enough to weather life changes or evolving financial ambitions. What follows are a few best practices for meeting these expectations through an evolved compensation strategy.
Be Mindful of Multicultural Values
C-suites are diversifying, and with that diversification comes the need to be aware of nuances in beliefs, values—and even financial starting blocks—among executive candidates. To broaden the credit union’s perspective and raise awareness of different mindsets, hold learning discussions with multicultural employees, particularly those you want to include in your leadership succession plan. Ask empathetic and educated questions that expose executives’ biggest ambitions and dreams for the future.
Aim Higher in Peer Analysis
Credit unions can fall into the trap of compensating their executives just like their peers do. This has very little chance of succeeding in today’s intensely competitive talent environment. Instead, review the packages paid to the top leaders who are serving cooperatives (and banks) at least one asset class above. Do this at least annually to stay on top of competitive trends.
Get Creative with Benefits
Big salaries are not always in the cards for credit unions. Benefits, as a compelling part of the broader compensation package, can be more affordable. They can also be funded in ways that are highly beneficial to a credit union’s long-term financial success. Talk with a benefits consultant who has their finger on the pulse of the expansive employee benefits marketplace. They will be able to advise how to customize benefits to a particular executive based on their needs and preferences.
Competing for top talent is tough—but not impossible. In fact, as younger generations of leadership rise in the ranks, mission-driven organizations are sensing a leg up in the battle for high-performing leaders who want to put their careers to work for good. Credit unions that successfully execute an agile compensation strategy will be in the best position to attract the kind of leaders who understand the mission. These leaders will have the skills to optimize that mission to bring about brighter financial futures for their members.
The views expressed here are those of the author and do not necessarily represent the views of TruStage™.
John Pesh specializes in helping credit unions evolve their executive benefits strategy to attract top talent. A director with Cuna Mutual Group Executive Benefit Solutions, John has 25 years’ experience in connecting organizations with life insurance, investments and advanced planning products and consultation services connected to estate planning, business succession, executive compensation and benefits and investments. He can be reached at John.Pesh@cunamutual.com.
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