Job shortages continue to dominate the headlines. In May 2022, there were 11.4 million open jobs in the country and only 6 million unemployed workers to fill them, according to U.S. Chamber of Commerce.
The Great Resignation began in 2021 when a record 47 million workers quit their jobs, and continues today. Many workers are looking for an improved work-life balance, flexibility, increased compensation, and a better company culture. The trend is happening across all industries, and at credit unions, the crisis goes well beyond teller shortages – it even hits senior management.
Fueled by job mobility and retirement trends, credit unions are feeling the challenges of replacing C-level members of the management team, and many report heightened competition for job candidates, along with lengthy delays in the search process.
Jenni Short, Chief People Officer, Texans Credit Union
“I joked with our board that the auto market, the housing market and the job candidate market are all following the same curve,” says Jenni Short, chief people officer at Texans Credit Union ($2.19B, Richardson, TX). “There's very little inventory, so you have to really to know what you want, wait for the right thing, and then pounce on it with a strong offer and a strong sales proposition.”
CU QUICK FACTS
Texans Credit Union
HQ: Richardson, TX
Data as of 03.31.22
12-MO SHARE GROWTH: 11.32%
12-MO LOAN GROWTH: 22.78%
But it’s not hopeless. Credit unions continue to bring on new management – it just takes patience and a little creativity. Below, leaders from three credit unions that have replaced C-level managers over the past two years offer their insights for navigating the Great Resignation.
Use All the Tools At Your Disposal
While online job boards, trade groups and other professional resources can help in the recruitment process, many credit unions report they have found the most success with private job recruiting agencies, affectionately known as “headhunters.”
Ron Celaschi, President/CEO, Clearview Federal Credit Union
“When we're looking at C-suite level positions, we pull out all the stops, from traditional to Indeed[.com] to agency,” says Ron Celaschi, president and CEO at Clearview Federal Credit Union ($1.7B, Moon Township, PA), which filled vacancies for chief financial officer (CFO) and chief lending officer (CLO) in 2021. “In fact, our CLO position did come from agency. However, our CFO was local and applied to us directly.”
CU QUICK FACTS
Clearview Federal Credit Union
HQ: Moon Township, PA
Data as of 03.31.22
12-MO SHARE GROWTH: 6.91%
12-MO LOAN GROWTH: 8.38%
While the CLO candidate had to travel from New Mexico to Pennsylvania to interview for the job, the new CFO was relatively local, working as a principal in treasury services at BNY Mellon in nearby Pittsburgh. Celaschi says the candidate was from the for-profit banking industry, but was the right fit in many ways.
“This individual had a very strong background, AICPA [the American Institute of Certified Public Accountants] accreditation, and was ready for the position,” Celaschi says. “He was in the banking industry, but he had worked for a local CPA firm, and his father is a credit union CEO in our local market.”
Don’t Overlook Internal Candidates
While stories abound about CEOs from other credit unions stepping in to turn things around, there are still plenty of stories of CEOs starting on the teller line and working their way up to the top. Looking inside for talent has the potential to save time and keep the business momentum going.
For example, when the CEO of Blackhawk Community Credit Union ($849.7M, Janesville, WI) retired amid the pandemic in May 2020, the credit union’s board launched a national search that yielded over 110 applications. That slate was narrowed down to a group of internal and external candidates, and the board conducted a second round of interviews, before ultimately promoting Lisa Palma, Blackhawk’s then-chief experience officer (CXO), to the post of president and CEO in December 2020.
CU QUICK FACTS
Blackhawk Community Credit Union
HQ: Janesville, WI
Data as of 03.31.22
12-MO SHARE GROWTH: 6.24%
12-MO LOAN GROWTH: 4.63%
Palma has spent over 11 years at the credit union, serving as chief operating officer, director of innovation and marketing, and CXO from 2014 to 2021. “Always remember: Sometimes the best candidate is already on your payroll,” notes Leslie Hulick, Blackhawk Community’s SVP and chief administration officer who coordinated the recruiting process for the board.
Leslie Hulick, Chief Administration Officer/SVP, Blackhawk Community Credit Union
Palma not only had to backfill but also appoint three different executive roles: chief retail officer (CRO), chief administration officer (CAO), chief operating officer (COO). All were filled by internal candidates in conjunction with a reorganization. Meanwhile, two other executives, the CLO and CRO, recently left for other opportunities, so the credit union is looking at more hiring and considering further reorganization.
“We are not opposed to using an outside recruiter if we felt that the skill set needed was challenging or unique. We just haven’t had the need up to this point,” Hulick says.
Rethink And Restructure Based On Talent
The process of searching for job candidates also offers new opportunities for injecting new talent and skills into the organization, as well as looking for ways the existing senior leadership team can play to its strengths. Clearview’s CEO says the search for a new CLO helped support a key strategic initiative: growing the credit union’s lending program.
“Certainly with a chief lending officer and the competitive landscape we're in, we knew it would take longer,” Celaschi says. “As we become larger and more complex in our offerings and what we do, we really felt like we needed to bring in high-quality individuals. This individual had significantly more commercial lending experience, which was critical to us.”
Celaschi says he wanted the new CLO to focus on retail, consumer, and commercial lending, as well as residential and commercial real estate, including bringing first mortgages and servicing back in house. He also reorganized the team to have the CLO report directly to the CEO, while collections was moved out of lending. “I really wanted him to focus on developing those relationships with the lenders and focusing on lending solely,” Celaschi says.
By March 2022, Clearview’s year-over-year loan growth was up 8.38% and loan originations were up 51.57%.
“These are opportunities to improve and better the organization,” he adds. “And I think in situations when you have turnover, you really need to think strategically. It's just as important to know what you don't want in that position as it is to know what you do want.”
At a smaller credit union such as Blackhawk Community, smaller management teams often have to wear multiple hats. Newly promoted CEO Palma had been in charge of customer experience, retail, HR, training, and marketing. “This was too much for one executive, so she essentially split her position in two when she became CEO,” Hulick says.
Hulick, who had started her career in HR at Blackhawk in 2014, was promoted from VP of administration to SVP/CAO, responsible for HR, marketing, training, and board relations and governance. “The best part about my role is the ability to integrate our marketing and HR teams. We have done several projects to engage our members, our community, and our staff all at the same time.”
Celaschi advises to always be thinking about organizational changes that may be needed in the next two to three years. At most credit unions, many long-tenured senior leaders are expected to retire within the next five years, putting even more pressure on the job market.
“You always have to consider, is today's structure what we're going to need when they leave?” he says. “It takes a lot of thought and a lot of conversations with other credit unions. I try to talk to credit unions that are around twice our size because that's ultimately where we think we need to be in three to five years.”
“I joked with our board that the auto market, the housing market and the job candidate market are all following the same curve. There's very little inventory, so you have to really to know what you want, wait for the right thing, and then pounce on it with a strong offer and a strong sales proposition.”
Focus On The Culture
Finding new executives is not just about addressing gaps in the senior leadership team. It’s also about affecting the culture of the entire organization. Case in point: Texans Credit Union.
Texans brought in new CEO David Frazier in February 2020, about six weeks before the pandemic hit. But Texans had faced even more turbulent times in the 2000s, following the mortgage crisis and a commercial loan portfolio that suffered considerable losses. The credit union spent time in conservatorship from 2011 to 2016, further stalling its lending program. When Frazier arrived, there was only one C-level executive left.
The financial situation has since turned around at Texans, but Short points out, “In filling those open positions, it was important to have a strong combination of culture and experience.”
Within his first eight months, the new CEO promoted three internal managers to his senior leadership team — SVP/retail, SVP/controller, and chief people officer (CPO). The team was rounded out with new hires for CFO and CXO — both from Texas. As the new CPO, one of Short’s main priorities was finding the right candidates to fill out the management team and other vacant positions.
“Up until David's hiring, as a course of necessity, it was about expense reduction and doing more with less. So, there was a big culture shift that needed to happen. How can we really reinvigorate our brand? How do we think big about what we can do for our members? How do we take the great team that helped us get us through those hard times and help them see things in a new way?”
One of the key changes took place throughout the organization as the credit union adopted the cultural values of EPIC — Excellence, People, Integrity, and Collaboration.
“While there was a lot of uncertainty, we had a great staff,” Short says. “The biggest shift was just helping them see that we wanted them to challenge the status quo — that we wanted them to think big. A lot of it was giving people and the team the ability to share their ideas, ask questions, and show that when you give us a great idea, we're going to put it into place and give you the credit for it. That has been huge for the culture, and I think the shift in the new leaders really drove that message home.”
Since then, Texans has undergone major system replacements, card conversions, and lending program upgrades, and the results are showing. From 2019 to today, the turnover rate dropped from 50% to 25%. Membership grew 5.6% in 2021 after years of being stagnant or in decline. The credit union’s average customer-satisfaction rating grew from 2.7 to 4.3 across all 11 branches, and the loan portfolio grew 26.13%.
“It wasn't just the whole new leadership team that came in and did this. These accomplishments were due to our staff who have been here and have worked really hard,” Short says. “We would not be here without them.”
“Always remember: Sometimes the best candidate is already on your payroll.”
Be Willing To Wait For The Right Candidate
In today’s job market, hiring organizations are more likely to look to up-and-coming managers for C-level positions, making the crowded job market even more challenging. Celaschi says the search for a CLO took seven months.
Celaschi says the long hiring process “was because of our philosophy of hiring the best. We're not going to promote somebody from within who's not ready for where we want to go, nor are we going to hire less than a high-level individual from the outside. So it did take us a good seven months to hire that position.”
The search for the new vice president of lending at Texans Credit Union took a full year.
“We interviewed at least 15 candidates,” Short says. “I have no idea how many more the search firm interviewed, but it was a very long process. We ended up with the right person. We took our time and we certainly were asked plenty of times, ‘Why is it taking you so long to fill this role?’ And it was because we absolutely wanted the right skillsets and the right culture fit.”
Since the pandemic, job seekers are putting a higher priority on flexibility and remote work, so requring them to move to a new city is a bigger ask than it was just a few years ago.
“We sold them on the opportunity,” Short says. “There are bigger opportunities for you to put your stamp on this organization. So, it’s a bit like, look at what we can do together.”
Make The Process Transparent To Employees
“Losing executives can be scary for staff, especially if they don’t know the circumstances or specifics around the decision,” says Blackhawk’s Hulick. “That’s why it is imperative to meet with their direct reports or their team right away. We try to do this before the departure is even announced to all staff, to offer reassurance, as much explanation as we can, and a plan to move forward.”
Sharing the facts with the staff in the beginning, Hulick says, can help to shut down the rumor mill, engage staff in decision-making, and “offer solace to those who may be feeling anxious or uneasy.”
Sometimes, credit unions have the luxury of easing the transition for a new leader. For example, the retiring Clearview CFO worked for 30 days after his successor was hired to introduce him to the staff, and learn the credit union’s accounting and finance practices.
Short notes that onboarding is important for all levels of the organization. While executives are expected to come in as self-starters, they need help building connections and understanding the culture and strategic vision.
“Our new CXO sat with a call center rep for a half a day so that he could understand what kind of pain points the employee and our members had,” Short says. “That was amazing because he got to see things about our process that might have taken him a lot longer to uncover. But, maybe even more importantly, he built a really quick relationship and got credibility because he spent that time with the team.”