How do you fix a broken pipeline? I’ll be honest: I’m not experienced in the fields of pipefitting or plumbing or natural gas distribution, but I can imagine that one accurate answer is, “It depends how and where it is broken.”
A pipeline is a system that carries liquid or gas over a long distance to a designated area for use there. If a community at the distribution point of the pipeline finds they are not receiving the resource they expected, they might identify that they have a “pipeline problem.” From that point, they would diagnose the problem, recognizing the many points for potential compromise. The resource could have made it to the distribution point, but become stuck before it was distributed. There could be a leak somewhere along the way, causing the resource to seep out too early. Perhaps there was a challenge at the point of origin and the resource never entered the pipeline to begin with. When those working with the pipeline explore what has caused the malfunction, they can apply solutions specific to the problem.
There is a pipeline problem in the credit union industry today. The evidence is in low output of female and minority leaders in key industry leadership positions at large credit unions; with state, national, and global trade associations; and in volunteer Chairperson positions across the industry. Today, women hold only 14% of CEO positions at credit unions over $1B in assets. A woman has never held the CEO position at CUNA, NAFCU, WOCCU, or CUES. Among the 36 currently serving CEOs at state credit union trade associations, four are female (approximately 11% of the total).
Recent data from CUNA shows that approximately 5% of all credit union CEO positions (of all asset-sizes) are held by people of color. This number is consistent with representation in the 40 trade associations referenced in the previous paragraph, as well. Approximately 95% of those CEO positions are held by white people.
Staying with the pipeline analogy, imagine that the system of pipes is all the jobs in the credit union industry that might help someone advance to a top-level position. Initial hiring into an entry-level manager position is where a person first enters the pipeline. If a person leaves or becomes stuck in a mid-management position, even with ambition to rise to the C-suite, that would represent the mid-pipeline leak. A lack of diverse and highly qualified candidate pools for top leadership positions is like being at the end of a pipeline and not receiving the resource that was meant to be distributed. This could be a result of an issue at the distribution point, or anywhere else in the pipeline. Unfortunately– unlike people dealing with literal pipelines– often when industries experience the result of a talent “pipeline problem,” they meet it with a shrug, observing that the women or people of color “just don’t apply for these jobs.” Rather than recognizing a problem with the pipeline, the scarcity of diverse talent in candidate pools is blamed on the resource itself (the people who “just don’t apply for these jobs”).
It is more likely that homogenous candidate pools are a result of something that happened much earlier in the careers of aspiring CEOs, though. A McKinsey study on Women in the Workplace (2018) finds that hiring and promotions at the first (entry-level) management position creates the greatest disadvantage for women. Even though women earn more than half of all college degrees right now (and have since 1999), for every 100 men hired into manager positions, only 79 women are hired. This disparate rate of advancement continues through further promotions, creating a situation where women never catch up: Today, women hold 38% of management positions. The study goes on to indicate that if current trends persist, the number of women in management will increase by only one percent over the next ten years. Simply by moving forward with promotions at equal rates (not forcing any turnover for those currently holding management positions), near parity could be achieved in 10 years, to women holding 48% of management positions.
Credit unions are too important to meet our pipeline problem with complacency. Ten years from now, our numbers must demonstrate more parity than the 1% change that other workplaces are trending toward if we hope to have the leadership that will preserve our industry’s relevance and continue delivering on our unique value proposition. We are in a very real war for talent, and we must respond strategically: Unemployment is at just 3.5 percent in September 2019, leading many businesses to cite competition to attract and retain top talent as a major threat to business growth. Many sources inside the credit union industry estimate that as many as 50% of current CEOs will retire in the next decade. To face this challenge, credit unions must be positioned as attractive employers to today’s changing workforce.
I ask again: How do you fix a pipeline problem?
In the credit union industry, we must do it holistically, looking at all the possible points where the pipeline might be compromised and providing solutions at each of these points. Today’s leaders must take personal responsibility for mentoring and sponsoring future leaders early in their careers (especially leaders who are different from them in demographics and skillset); organizations must invest in inclusive employee development programs that serve individuals with diverse backgrounds, experiences, and ways of thinking; and recruitment efforts must acknowledge implicit biases that may prevent attraction or selection of diverse candidate pools and work to overcome the effects of these biases.
Humanidei is committed to coaching organizations beyond understanding why diversity and inclusion matter into action steps that will result in measurable impact. If you and your credit union are ready to fix the pipeline and win the war for talent, now is the time for action.