Success in Succession

Credit unions must seek leaders who match the institution’s culture and consider candidates with a broad array of talents.

By Elisa Matthews | May 19, 2023 

Photo: fizkes/Shutterstock

With a low unemployment rate of 3.5% as of March 2023, according to the Bureau of Labor Statistics, the U.S. job market is showing signs of improvement. This figure can be deceiving, however, as the overall labor force participation rate is also low, which is reflective of many things – from a recovering economy and its pandemic-induced conditions to an aging population. Therefore, it’s best to remain agile and opportunistic toward reported conditions as they relate to your industry and community.

As many in the credit union space are aware, the industry is experiencing a generational shift, characterized by ongoing consolidation trends that have resulted in an overall industry reduction over the past decade. According to Callahan & Associates’ Q4 report, total credit unions declined year-over-year from 5,048 to 4,863. That’s a 3.7% attrition in one year. Additionally, as we continue to monitor inflation and the recent bank failures, we are mindful that the candidate pool may be expanding.

Further noteworthy shifts are that larger institutions are becoming even larger, while smaller ones are struggling due to factors such as competition, compliance challenges and succession-planning troubles. It will be increasingly crucial for credit unions to recruit and retain for the future, prioritize succession planning, seek leaders who match the institution’s culture and consider candidates with a broad array of talents.

Create a Winning Workforce

The realities of a 21st-century credit union means that candidates for leadership positions must possess a broader array of talents than ever before. New entrants to the corner office are not solely coming from the financial side of the business, but also from operations, technology, service, and other areas. In some cases, a shrinking bank landscape means that new leaders are entering the industry who have never worked for a credit union before.

Your mission, should you choose to accept, is to focus on the following:

• Recruiting: Implement proactive recruiting strategies to attract new employees. This can include leveraging social media and other online platforms to promote job openings, offering referral bonuses to existing employees, or partnering with local schools and universities to identify and recruit new talent within your community.
• Training/Cross-Training: Training and cross-training staff members can be an effective strategy for attracting and managing talent as well as enriching employee development. By training staff to perform multiple roles within the branch, credit unions can ensure that there is always someone available to help members, even if there are staff shortages in certain areas. This can also help improve job satisfaction and employee retention as staff members can develop a wider range of skills and knowledge.
• Culture Development: Build a culture where everyone is working toward the larger business goals of your institution. Strong cultures create a common language, develop strong leadership, improve internal cooperation and implement a consistent, integrity-based approach to meeting and exceeding the needs of your members and staff.

As Albert Einstein said, “The measure of intelligence is the ability to change.” When it comes to succession planning, when you envision the long-term success of your institution, don’t think of it as a problem to solve but rather an opportunity for improvement. There are broader demographic shifts throughout the workforce, with baby boomers reaching retirement age. As a result, credit unions, like other organizations, must determine who will lead them in the years ahead. It is no longer sufficient to find someone simply with the right skill set. Credit unions must also find new leaders who align with the institution’s culture and the industry at large. With proper leadership coaching, you won’t only improve the future of your livelihood but also increase both employee and member engagement.

While these challenges may seem formidable, there is a wealth of talent available to credit unions. The future of the industry is in good hands. They could come from within your institution or from different organizations and of varying backgrounds, while still sharing a commitment to advancing the industry and making financial services more equitable for all.

When in doubt, reach out. Community involvement is crucial for credit unions, and developing robust relationships with the communities you serve can optimize your recruitment and retention efforts. Credit unions can demonstrate community involvement by supporting local causes, sponsoring events, and partnering with local businesses and organizations, especially ones that are near and dear to your employees. By being an active member of the community, you can strengthen your reputation and build trust for quality recruitment and sustainable retention.

Elisa Matthews

Elisa Matthews Client Performance Strategies Integrity Solutions Facilitator Allied Solutions Carmel, Ind.