Large credit unions won't look the same after coronavirus
The coronavirus is reshaping staffing at some of the nation’s largest credit unions.
Several of the industry’s major players have said they plan to keep a significant portion of their staff working from home indefinitely.
As stay-at-home orders lift and COVID-19 diagnoses wane in many parts of the country, credit unions and other businesses have begun determining how to bring non-essential employees back to the office. The decision will be different for each credit union, based on its size, field of membership and location, but large credit unions across the country say their offices will be markedly different moving forward.
“We had about 250 folks that were remote prior to the pandemic getting fired up in March and now we have 1,500,” said Mike Lord, president and CEO of State Employees’ Credit Union in Raleigh, N.C. “The likelihood is we’ll expand that number considerably. I’d like to have the possibility of 2,000 or 3,000 staff that can work remotely.”
The $43 billion-asset SECU has a total of about 7,300 employees and 267 locations. While branch staff largely can’t do their jobs from home, Lord noted that many roles, including member support services, contact center jobs and more, can be filled outside a traditional office environment, though he has some reservations.
“I’m not sure the verdict is in on remote-from-home working,” said Lord. “I have very big concerns about maintaining our culture of member service and allowing employees to assimilate our culture.”
That includes not just on-the-job training but also the benefits that come from working alongside other staffers in an office setting.
Lord isn’t alone in those concerns.
“I haven’t seen anyone who has quite figured it out – people are still figuring out how to create organizational culture” while working remotely, said Chris Tissue, chief operating officer at CUCollaborate, a credit union consultancy. “Community is more important than it was. Personally I’m not a big meeting person … but the nice thing about meetings is that face-to-face where you take time to develop relationships and establish culture around the conversations you’re having.”
As credit unions increase their reliance on remote work, he added, management will have to be more intentional about checking in with employees and peers “and almost over-communicate relative to what’s going on, because you’re just not going to have those natural swing-by-my-desk or water-cooler conversations.”
John Best, CEO of Best Innovation Group, suggested the family-like atmosphere in many credit unions may be harder to establish with employees spread beyond the confines of the office. While it’s not impossible to create that culture remotely, he said, “It sort of organically happens when you’re in the workplace, but it has to be actively pursued when dealing with remote workers.”
Tukwila, Wash.-based Boeing Employees Credit Union currently has about 75% of its staff working outside of the office. While a small portion of staff will come back on-site sometime in July, “the rest of the population of employees [will] continue to work remotely for the foreseeable future,” said Melanie Walsh, chief administrative officer at the $22 billion-asset credit union.
However, BECU and many other credit unions – particularly those in large urban areas – are also dealing with instances where some employees may want to return to the office as quickly as possible, either for personal or professional reasons.
“There are employees who might have either technical challenges or physical constraints that they may be dealing with,” said Walsh. “If you’re working in a 500-square-foot flat with your buddies, that might be a difficult proposition.”
Large credit unions aren’t the only ones with plans to keep some staffers working remotely for the long haul, but given the resources those institutions have at their disposal, it could be easier for them to manage the transition successfully, sources said. It could also exacerbate the divide between large and small credit unions.
Small and mid-size institutions may see some reduction in costs by keeping employees at home, but that may not be enough to help smaller shops survive a recession.
“Smaller credit unions are going to need more services, more products and more flexibility to deal with the new economy,” said Best, pointing to the possibility of reduced loan volumes, the need to reorganize debt, increased collections efforts and higher charge-offs. Larger credit unions, he added, “have a much longer way to fall.”
Still, COVID-19 is likely to also change how larger institutions manage their facilities.
As the pandemic spread, Pentagon Federal Credit Union shifted about 90% of its staff to remote work, on top of another 5% who already worked from home. Beginning this month, staff who want to return to the credit union’s facilities in the Washington, D.C., metro area, Omaha, Neb., Eugene, Ore., and San Antonio, Texas, are able to do so. Over time the credit union has plans to bring additional employees back to the office.
“Going forward we’ll never be back to 95% at the office, 5% working from home,” said CEO James Schenck. “We have literally seen a 30% lift in efficiencies across our financial services reps and 50% in our mortgage shops,” thanks in part to interest rate cuts from the Fed. “By eliminating the commute, unnecessary meetings and by focusing on the mission, our efficiency and volumes are up,” Schenck added.
SchoolsFirst Federal Credit Union in Santa Ana, Calif., where roughly 60% of staff are working remotely right now, broke ground on a 180,000-square-foot facility earlier this year that is slated to open by May 2021. While it’s unclear how far along in the recovery process California will be by that time and how many employees the $20 billion-asset credit union might be able to bring back, CEO Bill Cheney said he hasn’t had any second thoughts about the expansion.
“Our consumer lending division, for example, is in leased space,” he said. “It’s 120 people and they need to come back and be on our campus eventually. We might extend the period of time over which we fully occupy that building, but we’ll still need it. We’re not going to shrink our way to success.”
Similarly, PenFed views the shift as providing the credit union with more time to grow into its current footprint.
“It allows us to grow without having to take even more space,” Schenck said, noting that the credit union’s expansion into San Antonio last year already includes 350 employees and that figure is likely to be above 500 by year-end. The move to telework, he said, “gives us more years of expansion as we continue to grow double digits without having to grow brick and mortar.”
If some credit unions do wind up with more office space than they formerly needed, they may have to find new ways to utilize that space, such as turning it into a community space or converting cubicles into meeting spaces, Tissue of CUCollaborate said.
“How can you use that space? Because if you own it, you’re in it for the very long haul,” he said. “Can you sublet it? That’s a definite risk, but I would challenge anyone facing that to find a way to have it not just be a ghost town or a ghost space, and find some benefit back to the membership or the community.”