10 minutes
Career path planning programs boost credit union employee engagement, performance and retention.
"A lack of development and career growth is the No. 1 reason employees leave a job,” declares Gallup’s 2017 State of the American Workplace report. The study notes that 51% of employees are actively looking for a new job, and with only 30% of U.S. employees feeling that someone at work encourages their development, most organizations—including credit unions—could benefit by putting more energy into helping to create career paths and implement career development programs for their staff.
The Value of a Career Development Process
Career development is often thought of as focusing on employee promotion, which can be difficult in small or relatively flat organizations. But career development can go well beyond just moving up the ladder. Gallup’s definition of the career development sought by most employees is the “process of understanding each person’s unique talents … and finding roles, positions and projects that allow them to combine their talents and abilities with experiences to build strengths.” Although employees are interested in career progression, they are equally interested in performing better and feeling more successful in their current roles.
Employees who have access to career development tools report higher levels of job satisfaction—but it takes more than contentment to build organizational success. “Creating opportunities for employees to grow and develop is critical to employee engagement,” notes Jen Kuhn, CEO of ServiStar Consulting, Franklin, Tennessee, a firm that offers consulting services and helps to coach, train and hire credit union employees. “Without a clear sense of future opportunities, employees will go from being engaged to simply being satisfied in their jobs.”
Employee engagement is particularly important in the credit union industry, where providing excellent service to members is part of what sets them apart from other financial institutions. As Kuhn points out, “Engaged employees are committed to the success of the members and the credit union. You see engagement in their everyday behaviors. Engaged employees go out of their way to create better member experiences.”
Engaged employees also tend to perform better, which has a positive impact on financial performance. As Gallup’s 2017 State of the American Workplace report suggests, “The behaviors of highly engaged business units result in 21% greater profitability,” and “organizations that follow employee engagement best practices … outperformed their competitors.” Kuhn agrees. “Engaged employees are looking for opportunities to make a difference,” she says, and that translates to better business results.
Given its positive impact on employee morale and retention, member service levels and financial performance, fostering career development is something credit unions should consider carefully. “One of the best ways to keep an engaged employee motivated is by offering them challenges and opportunities to develop their professional skills,” observes Kuhn. While career development opportunities can take many forms and do not necessarily have to be formalized, putting some structure around career path development programs can signal to employees that this is something that your organization sees as important. Kuhn believes it’s good to have a clear “individual development plan that helps the engaged employee see their future at the credit union.”
Formal Versus Informal Programs
Peter Myers, senior vice president at CUESolutions provider DDJ Myers, a leadership, recruitment and organizational consulting firm, has written a whitepaper on The Missing Link in Strategic Execution: Developing Mid-Level Leaders. In this whitepaper, Myers argues for the creation of formalized career development programs: “Too often, businesses expect leadership abilities to spring from minimally impactful and piecemeal one-off trainings offered in day-long workshops, or in the worst case, executives rely on hope as a strategy, crossing their fingers that their leadership talent bench will gain the right experience and skills as a result of project work.”
If a credit union is serious about reaping the benefits of a career development program, it should be willing to put some thought into its creation or implementation.
Key Components
A good career development program—whether sourced externally or developed in-house—provides the employee with the following elements: coaching; training; increased exposure or visibility; cross-functional projects; and challenging assignments. Based on observations of best practices in the field, the key components of an effective career development program can be broken down as follows:
- career planning to map out an employee’s goals and next steps (career mapping software can be a useful tool);
- job shadowing and rotation programs to provide employees with knowledge of other departments and cross-functional training;
- on-the-job training so employees can boost their skills in their current role;
- tuition assistance programs to encourage employees to upgrade their skills and knowledge through under- or post-graduate education or attending vocational or professional school;
- management and technical training, using online courses, webinars and onsite training to provide employees with additional skills that might not be organically developed on the job;
- competency development programs to fill in gaps in an employee’s knowledge, such as sales or customer service training; and
- off-site seminars and conferences to provide employees with exposure to knowledge outside the organization.
Stretch Assignments
Another major component of a formal career development program are “stretch assignments,” “a sanctioned exploration and practice of skills that … develop the student and satisfy some strategic need for the organization,” Myers explains. These assignments provide employees “an opportunity to meaningfully stretch themselves—‘meaningfully’ being the operative word,” he adds.
Through this type of assignment, employees often engage with other—perhaps unfamiliar—parts of the business, allowing them to grow and share technical expertise. “We have seen retail managers increase their financial acumen or a finance director enhance the marketing department’s ability to measure ROI,” Myers says. Stretch assignments are a great way to provide coaching, increased visibility and cross-functional training, while allowing the employee to remain in their current role.
Christine Petro, a credit union leader and CUES member with over 28 years of CEO experience who today serves as president/CEO of $69 million Chabot Federal Credit Union, Dublin, California, has had very positive experiences with career development programs. Petro believes that one of the keys to success is to craft a program that involves senior management and human resources, but ultimately remains “in the employee’s hands,” with the employee taking responsibility for his or her own success. “I found that when employees were encouraged to articulate their career goals and put plans and timelines into their action plans, they took ownership of the process, as opposed to [being] a manager-driven process,” says Petro. “Since it was always driven by the employees’ desires, employees willingly devoted the necessary time and energy to the process.” She also suggests that each career development program should be tailored to the individual employee.
Petro has also seen the benefit of creating stretch assignments that help employees expand beyond their current roles. One of her favorite examples of a successful stretch assignment was created for a collections manager at a credit union that she ran prior to leading Chabot FCU. The manager in question was well suited to his role but was looking to have more positive interactions on the job. Through the stretch assignment, he was able to leverage his background in amateur theater and love of the stage to lead financial literacy training classes offered by the credit union to its members. The positive feedback from these sessions provided a balance to his day-to-day role in collections. By crafting a unique career development plan tailored to his desires and skills, the credit union was able to increase his job satisfaction while continuing to benefit from the expertise he brought to the collection manager role. “Adding him to the ‘roster’ of available presenters allowed us to expand our workshop schedule and provided some backup as well,” adds Petro.
Additional Benefits
In studying such programs, Myers observes, “The clearest benefits that we see from career development programs are three-fold: You get more done as an organization, your organization’s portfolio of skills becomes both broader and more refined, and you have an increased level of employee engagement and loyalty.
“If the CEO is attentive to the continual professional development of staff, the staff are privy to challenging work assignments that stretch their capacities and competencies in a positively meaningful way, … which leads to higher quality accomplishments,” Myers concludes. As he puts it, it’s a “win, win, win!”
Petro echoes these sentiments. In her experience as a credit union CEO, she reflects, when an organization focused on employee career development, “people tended to stay, and morale was good.” There can also be a cost savings, since it’s often cheaper to promote from within the organization—but the talent pool must first be developed to be ready for promotion. Petro adds that there are also some less obvious benefits worth noting—in a smaller organization, for example, when employees cross-train in other areas, it’s easier to provide seamless vacation and PTO coverage.
Drawbacks
Despite all of the aforementioned positives, there are a few points of caution to consider when offering career development programs to staff. As Myers points out, “It takes time. It takes practice. And, it takes courage and commitment. The reality is that not every organization is ready for a full-fledged career development program. If the CEO and executive team desire strategic and operational (or even cultural) shifts to happen, yet they are unwilling to shift themselves ... well, hopefully you can do the math.”
Myers emphasizes that the broader executive team must support the initiative. “While ‘development’ has a strong lean towards HR, the impact has to be cross-functionally informed and sustained,” he explains. “In other words, if the CFO’s signature isn’t at the bottom of the program’s business case, then the program will lack a useful perspective.” He also notes that the program must be meaningfully challenging. “If you want extraordinary leaders, then the training has to be extraordinarily hard.” And, of course, sustained change only comes through a meaningful level of commitment from the involved employees.
One oft-cited drawback to implementing a career development program is that CUs that take the time and budget to train their employees face flight risk, as they make their staff more attractive to other organizations. While this is a risk that must be considered, research (such as this 2017 toolkit report from SHRM) indicates that satisfied and engaged employees are actually less likely to leave. Petro’s own experiences are in line with this. “Employees who voluntarily participated in the [career development] program rarely left, if ever,” she says.
Kuhn suggests that not offering career development can be even more of a risk: “If you don’t pay attention to developing and challenging your engaged employees, they’ll start looking for opportunities outside the CU.” The risk of someone leaving is almost always offset by the loyalty created when a CU invests in his or her career growth.
Petro points out an additional risk involved in implementing such programs—when managers, who are already very busy, begin to resent the time and budget commitment career development can take. If a CU wants a career development plan to succeed, it must be incorporated into its organizational values. Managers must be rewarded for helping to develop their employees, and support and participation should be taken into account in the performance management process.
Be Thoughtful
When credit unions develop a solid plan to help employees grow and manage their careers, they can reap a wealth of benefits. A career development program tailored to both the organization’s values and needs and those of the individual employee can help with smoother, less costly succession planning, boost employee engagement and member service, and even improve financial results. While these programs are not without some risks, the risks associated with not offering such a program may be even higher. If credit unions “shortchange leadership development, businesses run the risk of squandering their greatest asset: their people,” says Myers. Many credit unions pride themselves on valuing their people—a thoughtfully conceived career path planning program can be an excellent way to act on those values. cues icon
Jen Lawrence, MBA, is a former investment banker, recruiter and corporate trainer who now writes about leadership and strategy. She is the author of Engage the Fox: A Business Fable About Thinking Critically and Motivating Your Team.
