Increased employee engagement through education and training is a brilliant strategy. Yet one of the first budget items to go away in tough times is the education and training budget! Why is that? Because community banks and credit unions may not have discovered the true value of continued education and training for their employees. Below are 6 reasons to increase your training budget, or at least continue, your education and training budget during tough economic times.

1. Education and training are different. You need to do both.

Education is more formal in that your employees obtain a college degree or a specific certification in their field. Examples of formal education are a Compliance and Bank Secrecy Act Officer Certification, Commercial Lending School, Financial Management School, Human Resources Certification, Community Bank IT Security Officer Certification, and others.

Training is more informal where your employees attend seminars, webinars, workshops, or simply have one employee train another. Training ensures the standardization of your internal processes and procedures across branches.

2. Education keeps your employees’ minds learning.

The more employees learn the more they learn. In other words, as employees attend training in various areas, employees’ minds open to learn even more. Learning is a tool to keep your employees engaged in their specific jobs and also to learn about other areas of the institution they may want to move to later.

3. Continued and ongoing training creates a culture of cross-training.

The goal in cross-training everyone in the organization is for your customers or members to always be serviced, regardless of who is in the office or out. At the same time, you may find that the person who is cross trained actually performs the duties better than the incumbent. This is good to know in case the employee in that job leaves the organization. You then have an automatic backup already trained. Make sure to add in everyone’s job descriptions that cross-training is part of their jobs so no one can say they didn’t know that learning or doing somebody else’s duties was not part of their job.

4. Education and training create a pipeline for succession planning.

When everyone knows somebody else’s job, they may share their interest in someday doing the other job at some point. Or, at a minimum, they will enjoy performing the other person’s job as a backup and not feel inadequate during that person’s absence. The cross-training culture naturally creates a pipeline for succession planning because the leaders can take notice of who performs each job best. Similarly, cross training opportunities create career paths for everyone.

5. Continued education and training result in a culture of engagement.

A culture of cross-training produces a culture of employee engagement. Employees appreciate that the organization invests in them to train them and give them the tools necessary to succeed in their jobs. Even if they end up leaving, they will never forget that you provided these opportunities to learn. But most likely, they will want to stay to continue learning. Their increased loyalty may lead to new potential career paths they didn’t plan without the additional training.

6. Tracking education and training results in increased credibility with your regulators.

And as an added bonus, when regulators see a robust education and training program, it shows your commitment to investing in your employees, which results in a more safe and sound institution. The more trained your employees are the less errors they will make with account holders. That in turn leads to increased customer satisfaction and potentially higher profits for your institution.

I hope this blog encourages you to keep your education and training budget, and hopefully increase it, during tough times. Employee engagement is a retention strategy. And you can attain increased employee engagement through education and training.

I spoke at a banking association’s workshop for emerging leaders and the event planner asked me a great question, “Where are the emerging leaders in banking?” We discussed the fact that associations work hard to offer quality educational programs for emerging leaders. But attendance is typically lower than they expect. We wondered why this phenomenon is a problem across the nation.

I believe there are several reasons why the emerging leaders don’t participate in these special leadership development programs as much as they should. Below are some of the reasons I observe from our clients under $5 billion in assets:

Emerging leaders are working.

Emerging leaders are running the organization behind the scenes and don’t have time to get away. They occupy entry level, supervisory, and some middle management jobs. They are starting their families and juggling work, family, and community commitments.

There is no money in the budget.

Often there is no money in the budget to attend leadership development focused programs. They are an afterthought. While budgets for certain training to take place, they focus on the technical aspect of the employees’ jobs. The focus on the leadership development of emerging leaders comes second.

Perception that emerging leaders are not loyal.

Financial institutions have been burnt before. They develop a specific emerging leader and just when the employee is ready to take the new job, he or she leaves. The organization is left with no one to occupy the position of an employee who just retired. There is no successor, and they find themselves starting all over again.

Legacy employees don’t leave.

Reasons such as the economic environment, living longer, cost of health insurance, and others, means legacy employees continue to occupy their jobs. I call “legacy employees” those who have been in the same job or same organization for over 20 years and are past the full retirement age.

It starts at the top.

I recently spoke with a CEO who mentioned their institution’s board of directors is comprised of three directors over 60, one over 70, and three over 80 years old! If the Directors are not willing to leave their spots and allow a younger generation to take over, the rest of the institution will follow suit. Why do they not leave? In addition to the reasons stated above that apply to employees, the legacy directors may not fully trust the next generation to take over. When addressing banks, in many instances, these are family-owned and the founders cannot let go because they don’t have successors—or at least successors they trust to take the organization into the future.

The lack of leadership development for the emerging leaders presents a critical risk to community banks and credit unions today and something must be done to change this trend. Below are some ideas you can implement immediately to train the leaders of tomorrow:

Do implement a succession planning process.

The first step is to identify future leaders and successors of key positions in your institution.

Budget for leadership development.

Ensure you budget both for technical training as well as leadership development for the emerging leaders you identify through your succession planning process. In addition, budget for continued leadership development for your senior leadership.

Encourage emerging leaders.

The performance review process is the appropriate time to ask each employee if they aspire to positions of leadership in the future. They don’t necessarily have to desire a senior leadership role. Some of them may be happy to be a supervisor, team lead, or manager of a department. Others may aspire to a “C” level position (i.e., Chief Financial Officer, Chief Credit Officer, etc.).

Mentor future leaders.

Part of a strong Talent Management Program is to establish a formal or informal mentoring program both as you onboard new employees and then as you identify successors. Mentoring employees is part of leadership development.

Hold emerging leaders accountable.

It’s a two-way street. The current senior leadership who mentors and provides opportunities to the emerging leaders must hold them accountable too. The accountability comes in several ways. For example, ask them to share with others what they learned at workshops, seminars, and leadership development programs.

Send them to training.

If you are a senior leader, please send your emerging leaders to leadership development seminars, workshops, and conferences offered by your state associations or other professional institutes. Also, as they grow into their leadership journey, provide executive coaching opportunities so they continue to grow as a leader and learn to deal with special situations.

If you are an emerging leader, go!

If you have been selected to be a successor to a key leadership role or aspire to lead throughout your journey, you must take the time to attend these leadership development opportunities when they present themselves. It is on you to prove and demonstrate to the legacy leaders and board of directors that you can and will take the organization to the next level. Part of demonstrating your desire to lead is to work hard and be loyal to the institution. This is hard to do when the trendy thing to do is to leave a company for the next best opportunity after only a few years of employment. You need to allow your employer time to develop you and to also prove to you that they want you in the organization for the long haul.

So, to answer the question, where are the emerging leaders? If you are reading this article and are currently in leadership, I hope it inspires you to send your emerging leaders to leadership training. If you are an emerging leader, I hope this blog inspires you to go and attend every opportunity you get!

Struggling with succession planning? As always, we’re here to help.