By Frank J. Diekmann
Job creation is something you might have heard mentioned once or 9,219 times during the recent presidential election. It can be a confounding issue, and is certainly far more complex than the simple black-and-white scenario so often painted that certain jobs have disappeared because they were moved offshore and it’s simply a matter of moving them back.
President-elect Trump has made job creation a centerpiece of his upcoming administration and if he’s successful credit unions will benefit as much as any organizations. But the flip side to all of this is that credit unions are also emblematic of how employment has changed and evolved.
Anyone who has been with a credit union for a decent amount of time—and increasingly, you don’t have to be there very long at all—can think back on job duties that are no longer needed or performed. Remember all that training you went through a few months back? Great, forget it. It’s obsolete now and has been automated.
This isn’t just about factory jobs. Credit unions have also became significantly more productive over the last 16 years, according to the latest Trends Report from CUNA Mutual Group.
In its just-released analysis of data through October of 2016, CUNA Mutual’s economists noted that back in 2000 it took on average 0.38 full time credit union employees to manage every $1 million in assets. Today that ratio stands at 0.21, a 45% improvement in productivity, or 2.9% increase in productivity per year. Today there are 268,013 full time employees working at credit unions managing $1.3 trillion in assets, CUNA Mutual stated.
The Missing 225,000 CU Jobs
“The number of employees working at credit unions today would have been 494,000, (0.38 x 1,300,000) if credit union employees had the same level of productivity they did back in 2000,” CUNA Mutual said in its analysis. “The result: 225,988, (494,000 – 268,013), jobs were not filled due to improvements in human and physical capital. Smaller asset-size credit unions reported bigger improvements in productivity ratios over the last 16 years; however, larger credit unions are still more productive due to their economies of scale.”
While credit unions take pride in claiming during mergers that no jobs will be lost, you also never hear that jobs are being created, either. To appease boards, credit unions usually hang onto all their employees in mergers and let them leave via attrition. And then they don’t fill the vacated positions.
Obviously, credit unions aren’t alone in driving these types of staff efficiencies (which, I get, are offset in part by employment at the companies that create the hardware/software that automates operations, offers mobile access, etc). Banks and other financial services providers, not to mention even larger employers, have been even more aggressive in being “lean.”
It’s a conundrum and the forecasts from the futurists and economists and others are spread like buckshot over what it all means to our futures. Just keep in mind this isn’t an issue that involves “others.” When you have one-third of the U.S. population as your membership, credit unions have an upfront seat. But that doesn’t make the view any clearer.
Frank J. Diekmann is Cooperator-in-Chief at CUToday.info and can be reached at Frank@CUToday.info or followed @FrankCUToday.