ARE YOU READY FOR THE CHANG­ING OF THE GUARD?

Mil­len­ni­als are tak­ing a dif­fer­ent path to­ward lead­er­ship po­si­tions, and they’re bring­ing a dif­fer­ent mind­set along with them. Here’s what cur­rent lead­ers need to know.

Credit Union Journal - - Contents - BY BRIEN JOYCE Brien Joyce is VP of lender ser­vices at EFG Com­pa­nies.

Mil­len­ni­als are al­ready the dom­i­nant gen­er­a­tion in the work­force, even if they don’t yet hold the ma­jor­ity of lead­er­ship po­si­tions. That will change quickly, how­ever, and lenders must be pre­pared for how this de­mo­graphic serves mem­bers — as well as how their peers pre­fer to in­ter­act with FIS.

THE CHANG­ING of the Guard is one of the most pop­u­lar at­trac­tions at Lon­don’s Buck­ing­ham Palace, a sym­bolic event that sig­ni­fies the han­dover of re­spon­si­bil­ity for mil­i­tary security of the Royal Palaces in Lon­don.

In Amer­ica, our Chang­ing of the Guard at the Tomb of the Un­known Soldier at Ar­ling­ton Na­tional Ceme­tery hon­ors all United States armed ser­vices per­son­nel.

How­ever, in busi­ness the phrase sig­nals a change in lead­er­ship. I be­lieve the fi­nan­cial in­dus­try is in the midst of ex­pe­ri­enc­ing its own chang­ing of the guard as baby boomer-aged CEOS and fi­nan­cial lead­ers re­tire.

Many en­ti­ties are largely un­pre­pared for this change. In fact, ac­cord­ing to a 2014 Robert Half sur­vey ti­tled “Many Ex­ec­u­tives Un­con­cerned About Near-term Baby Boomer Re­tire­ments,” only 31 per­cent of CFOS were wor­ried about baby boomers re­tir­ing. Of those who were con­cerned, 39 per­cent feared loss of lead­er­ship, and 23 per­cent feared loss of legacy knowl­edge. Whether these CFOS counted them­selves as baby boomers is un­known. But we do know that mil­len­ni­als — those born be­tween 1980 and 2000 — make up the bulk of Amer­ica’s work­force and they are mak­ing their move into lead­er­ship roles in very non-tra­di­tional ways.

A Fi­nan­cial Ex­ec­u­tives In­ter­na­tional spokesper­son re­cently com­mented that ex­pe­ri­enced fi­nance ex­ec­u­tives seem to think young pro­fes­sion­als in the in­dus­try aren’t fol­low­ing the same path they did to be­come CFOS. The tra­di­tional, you-need-to-pay-your-dues, con­ser­va­tive think­ing has in some cases pre­vented an aware­ness of the ap­proach­ing gap in avail­able se­nior fi­nance lead­ers.

This is very ap­par­ent in the re­tail au­to­mo­tive space, in­clud­ing in the deal­er­ship F&I of­fice or the fi­nan­cial auto lend­ing depart­ment. Many ris­ing stars have taken a cir­cuitous route, spend­ing time in non-fi­nan­cial parts of the busi­ness or cut­ting their teeth in com­pletely dif­fer­ent in­dus­tries. Un­like their baby boomer coun­ter­parts, mil­len­ni­als will likely change ca­reers and em­ploy­ers two times more than pre­vi­ous gen­er­a­tions.

Fi­nan­cial man­age­ment and sys­tems con­sul­tant Mag­gie Martensen says, “Mil­len­ni­als bring a more ex­tro­verted, peo­ple-cen­tric ap­proach to fi­nance. They’re more highly skilled at their age than pre­vi­ous gen­er­a­tions, are able to lever­age tech­nol­ogy faster and some can nav­i­gate change faster.”

The mind­set of these new lead­ers will have a sig­nif­i­cant im­pact on re­tail au­to­mo­tive lend­ing in the com­ing years. We are see­ing more out-ofthe-box solutions to tra­di­tional auto fi­nance challenges, such as delin­quen­cies. These lead­ers are open to eval­u­at­ing new op­tions to pro­tect their loan port­fo­lios out­side of APR and loan terms. For ex­am­ple, they have a very per­sonal view of the Great Re­ces­sion. As a re­sult, con­sumer-pro­tec­tion prod­ucts have greater per­ceived value and are ac­cepted as a means to­ward rev­enue and loan growth.

Mil­len­ni­als also have a very dif­fer­ent mind­set to­ward their per­sonal fi­nances. Sad­dled with stu­dent loan debt and the challenges of grow­ing their fam­i­lies, re­search fielded by Cox Au­to­mo­tive and Deloitte re­flected that: • Mil­len­ni­als made up 36 per­cent of

the lend­ing mar­ket in 2016.

• By 2019, mil­len­ni­als will ac­count for

40 per­cent of new ve­hi­cle sales.

• 39 per­cent of mil­len­ni­als who sub­mit­ted ap­pli­ca­tions through Deal­er­track’s network were sub­prime. • Al­most 60 per­cent of mil­len­ni­als set a bud­get be­fore look­ing at ve­hi­cles, com­pared to 46 per­cent of Gen­er­a­tion X and 40 per­cent of baby boomers. • 83 per­cent of mil­len­ni­als said an af­ford­able monthly pay­ment is very im­por­tant when se­lect­ing a lender. With mil­len­ni­als as­sum­ing lead­er­ship po­si­tions in lend­ing, they will be bet­ter suited to work more closely with their age-range coun­ter­parts across the desk. The task for cur­rent lead­ers at the lender and deal­er­ship level is to work with them! Now more than ever, we need to lis­ten to these younger col­leagues and be will­ing to at least give their sug­ges­tions a try. In­volve them in adopt­ing new tech­nol­ogy and mod­i­fy­ing pro­cesses for speed and flex­i­bil­ity.

I’m not ad­vo­cat­ing throw­ing the baby out with the bath wa­ter, but we should be bet­ter pre­pared for this chang­ing of the guard.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.