Laws of Attracting Young Talent
Credit unions are at a disadvantage when it comes to recruiting young talented job candidates because more than 70% of millennials are not even familiar with the credit union industry. That's bad news since industry reputation plays a key role in attracting talented candidates who are needed to grow the movement, according to research and various surveys.
Industry reputation is just one of the five important laws of attraction that can help credit union executives and HR managers increase the quantity and quality of talented candidates. Based on a study from the Filene Research Institute, the laws of attraction also include the organization's values and its overall personality; the job's compensation and benefits as well as an organization's image and size; the behavior of the recruiter and an organization's corporate social performance.
“Values, in some cases, have more influence on the applicant than pay and promotion,” said Lauren Culp, manager of The Cooperative Trust at the Filene Research Institute, who recently presented a webinar on Filene's research report, “The Laws of Attraction: Credit Union Recruitment in a Competitive Labor Market.”
The Cooperative Trust is a Madison, Wis.-based grassroots organization for young credit union professionals 35 years of age and under. It was established in 2012, evolving from the Crash Network formed two years earlier. One of its goals is to substantially expand the influence and engagement of millennials as the next generation of leaders to help grow the credit union movement.
“People are attracted to companies that have similar values to their personal ones, which makes a lot of sense,” she said. “In the realm of (an organization's) personality, we’re actually finding that applicants prefer companies whose culture compliments their personality but isn't exactly the same. For example, some employees with low levels of trust will actually seek out workplaces where their peers are exhibiting trusting behaviors because it's a good compliment to their personalities.”
Because job candidates are using these markers in choosing a new job, credit unions need to publicize and promote their values as well as their personality.
Filene recommended that credit unions should identify and define their values and determine whether those values are clearly communicated in all recruiting materials and mediums.
“Interestingly, our research shows that early in the job search, applicants will use compensation and benefits to narrow their choices, but they’re going to use the organization's characteristics, like your image, to make their final decision,” Culp said. “The image that you are presenting to the community or the image your applicants perceive of you can really tip the scales in your favor or not in your favor.”
According to Filene's research, job candidates also look for organizations that provide a flexible and clearly defined career path, work/life balance, including whether vacations are respected. It's also important for credit unions to review whether they provide enough information to potential candidates about career development and whether the credit union's compensation and benefits attract the types of applicants it wants.
Culp noted it is important for credit unions to develop an outline for each job opening that can show candidates how they can climb their ladder of career advancement or other career options within the organization. What can also help credit unions attract talented employees is to implement a mentoring program, which can groom future leaders.
Interestingly enough, the size and profitability of your credit union does not affect candidate attraction, but familiarity is important, Culp noted.
“If someone is unfamiliar with your organization, they’re going to rate it less,” she said. “Industry reputation plays a role. When you’re thinking about how familiar someone is with your organization this goes both in the broad sense of do they understand the difference between a credit union and a bank and have they heard of your organization. Is your name out there in positive ways or is your name not out there at all?”
A qualitative study of job-seeking college students found that when prompted to evaluate the reputation of three hypothetical companies, respondents spent 20% of their time discussing the industry and its potential job prospects, which was more time spent than talking about any other categories such as growth opportunities, familiarity, size and profitability, according to Filene.
That's why it's important for credit unions to educate job seekers about the industry and the individual credit union.
“As a relatively small but important component of the banking sector, credit unions face a gap in the public's understanding of credit unions and cooperatives at large,” the Filene study stated. “By educating the public, which inherently includes potential applicants, about the credit union model, a credit union could expand its applicant pool by reaching individuals who were previously unfamiliar with the industry. Since familiar industries are rated as more attractive by potential applicants, broadening education about credit unions could be a key component of how HR departments improve organizational attraction.”
Another important law of attraction is that applicants form strong impressions about an organization based on the behavior of the credit union's recruiters.
“If your recruiters are personable and they provide timely feedback, then the applicant attraction is really strengthened,” Culp said. “Recruiter communication is another important piece that you can strengthen because when the applicants have some communication, when they feel like they have some transparency to the process, it feels fair and that can increase applicant attraction.”
The next law of attraction –corporate social performance – may be an ace in the hole for many credit unions.
CSP is generally defined as an organization's commitment to its social responsibilities and relationships with stakeholders. Research shows organizations with higher levels of CSP are viewed as more attractive by job candidates because it can create a sense of pride about working for those organizations.
Credit unions generally outpace banks when it comes to most aspects of CSP since cooperatives have always been and continue to be deeply committed to community service, volunteerism and people over profits.
Specifically, research shows that organizations with high CSP ratings on the treatment of minorities and women tell applicants that the work environment is more inclusive, which increases organizational attraction. What's more, companies that engage in community involvement such as community philanthropy and employee volunteering are also more attractive to job candidates, according to Filene.
Culp said there is another benefit for credit unions with a high CSP.
“If I see my organization is already engaged, doing good in the community, it's a reasonable assumption as an applicant that the credit union is going to also promote the well-being of their employees,” she said.
Culp also noted that millennials want their work to have meaning and purpose. A Gallup poll last year found that only one in three millennials strongly agree that the mission or purpose of their organization makes them feel their job is important.
“Millennials are unsure about how to pursue purpose-driven work,” she said. “So we can attract millennial applicants by signaling that we teach employees how to engage in purposeful work and how to measure its impact.”