Demographic changes are driving change in credit union leadership, the most significant of which comes in the cost of hiring a president/CEO. These days, the price of top talent often comes with a high price tag, according to executive recruiter Charles Shanley (pictured).
"There are still credit union boards out there that suffer sticker shock when it comes time to replace long-term CEOs who are retiring," Shanley, executive vice president for John M. Floyd & Associates in Baytown, Texas, said.
More of those boards will have to face the music in the coming years as the growing number of baby boomer retirees takes its toll on credit unions' veteran leadership. Salary and benefit trends are climbing upwards and top-quality candidates will be facing what, for them, is becoming a sellers' market.
However, savvy boards are responding with pay-for-performance packages simpler in design and, many feel, more effective in motivating high-level performance. During the coming years, well-designed incentive packages will be crucial in attracting top talent, according to Sue Mitchell, CEO of executive recruiting firm Mitchell, Stankovic and Associates in Boulder City, Nev.
"With 46% of the credit union industry eligible for retirement, we're looking at a significant leadership transition period," Mitchell said. "The need is there, and we have to have better recruiting processes in place and do a better job identifying emerging leaders."
Even though the credit union industry continues to consolidate, which will lead to fewer top-level positions overall, current demographic trends will mean more opportunities for the right candidates in the near future. The next generation of CEOs will need to be effective strategic and tactical thinkers, and second-tier executives must be given the opportunity to learn the skills they need to step effectively into the C-suite of their current or another credit union, Mitchell said.
"Simply hiring a recruiting firm to do a search is shortsighted," Mitchell said. "We have some real talent waiting in the wings that isn't being given the chance to develop."
In the coming years, succession planning scenarios will play out all over the country, the recruiters said, and boards need to understand and develop the proper environment if they want to keep their next generation of leaders at home.
"The next five years will be transitional and by 2020 we'll be facing a perfect storm of leadership needs and changing conditions," Mitchell added. "The consolidation of smaller organizations will no longer allow existing CEOs to easily step up the asset ladder to larger credit unions."
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