By Ray Birch
SCOTTSDALE, Ariz.—Looking to hire someone who will have “analyst” in their job title? Get ready to pay–while potentially reducing salaries for other positions, one person is advising.
There is a difficult market reality facing many in the movement, particularly smaller credit unions with limited budgets, acknowledged Sam Kilmer, senior director at Cornerstone Advisors. But it’s a reality that he said requires credit unions to re-evaluate what they consider their most valuable—and therefore highly compensated—positions to shift money to analyst roles—especially data analysts.
Not Unique to Credit Unions
It’s not a challenge unique to credit unions.
“Data analyst is a growing position that's not only in high demand, this demand is occurring during one of the lowest periods of unemployment in the history of the U.S.,” said Kilmer. “We've got a great job market for workers—it's an employee's market. And then you have a new type of role emerging quickly where many of the tools analysts use are the same across the industries. There is a massive demand for analysts now, and it’s not just within credit unions and banks. There are a lot of employers credit unions are competing with.”
What’s making analysts so important today is the nearly infinite number of data points being captured by businesses of all types as they seek to not just meet but predict consumers’ wants and needs. Few organizations have as much information on their consumers as do credit unions.
“The reason why these analysts are in such demand is because traffic is shifting away from the branch. Interactions are less in person and more digital,” said Kilmer. “And we now have whole new treasure troves of data within the financial services industry. Everything is a data point—a member contacts the call center, that’s a data point. They use their credit and debit cards—more data points. They use mobile and online banking, even more data points. It’s endless.”
The Trees & The Forest
The need to effectively see the data trees amidst the data forest is forcing credit unions to pay more for analyst positions that offer the potential to have greater impact on the bottom line than the types of analysts credit unions have employed in the past, such as credit and financial analysts, explained Kilmer.
“Recognize that where you put resources as a credit union has to change,” said Kilmer. “If you are used to paying relatively big money to folks like branch managers and marketing managers, you will have to start paying them less to afford data analysts.”
Kilmer said credit unions must re-evaluate what it considers the critical revenue-generating positions.
“Branch managers, loan managers … you have typically been paying them more because they were revenue leaders. They know how to bring in the loans and bring in the new members,” he said. “These positions have historically been a place where credit unions have put their payroll money, in addition, of course, to executives.”
The New Revenue Leaders
Kilmer insists data analysts are the “revenue leaders of tomorrow.”
“In the future you need to look at people who are involved in data science and digital delivery as being the people who are generating loans for you,” said Kilmer. “Historically credit unions have viewed analysts as cost center employees. They were positions considered to be part of the cost of doing business. So you don’t resource them as heavily or pay them as much. However, today, to be competitive, with all industries relying so heavily on data analysis, you have to find ways to pay them. You have to shift resources away from positions that are becoming less critical to the business.”
The Role of Outsourcing
Credit unions can outsource some of their data analytics work, acknowledged Kilmer.
“But you still have to have some data analytics people on staff to direct the work, make decisions and understand what is going on,” he said. “It’s the same situation as compliance. Credit unions, as we know, face a growing compliance burden. They can outsource some of the work but they still need a compliance expert on staff. So, you can’t just totally outsource your data analytics work. You have to have someone, such as a CIO, who is strong in data analytics.”
Kilmer noted statistics and statisticians have been around for a long while, but the demand now is for much more than just a spreadsheet of numbers.
“Now with the availability of data, and because of the need to use the data across a lot of different industries as customers move to digital-first buying, there's just widespread demand for these kinds of roles,” he said. “So if you want to engage members, the best way you can do it is to analyze what they're doing and figure out what they need, when they need it. And you need analysts for that.”