How credit unions are recruiting the next generation of talent

As many senior leaders across the credit union industry near retirement age or leave for other opportunities, boards of directors are looking to younger generations to fill the gap and advance their organizations.

Aging C-suite professionals who postponed retiring at the onset of the COVID-19 pandemic to help their institutions through uncertain times are now taking steps to leave — creating vacancies for critical decision-making roles across organizations. This struggle to compete against larger financial organizations is further fueling the trend of shrinking membership at credit unions.

Regulators with the National Credit Union Administration have been working diligently to combat this trend by advancing a proposed rule on succession planning in early 2022, but have not discussed it in any board meetings since then.

In that time, consumers' needs have continued to change, but credit unions still struggle with adapting organizational practices and recruiting more representative talent to match the current composition of the communities served, said Brandi Stankovic, executive coach and former managing partner of Mitchell Stankovic and Associates during TruStage's Discovery conference on Aug. 10.

"A challenge for all credit unions is having the board evolve as the communities within our fields of membership evolve. … So many credit unions across the country have boards that represent the way the credit union was, and maybe not the direction that they're headed, so having that priority of [diversity, equity and inclusion] at the board level is so valuable," Stankovic said.

DEI has been at the core of numerous campaigns for change over the last few years, ranging from mentorship programs and more inclusive hiring practices to tailored business products such as the addition of preferred pronouns on credit and debit cards.

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Margie Salazar, chief executive of FirstLight Federal Credit Union in El Paso, Texas, explained that prospective board members must reflect and understand the communities served by the credit union during the nomination process.

"We're making it a point to recruit board members who have the skill sets that are going to be needed to move the organization forward," Salazar said. "Expectations have been raised for credit unions [as a whole], so we're raising the expectations for board members and the skills and qualifications that we're looking for."

While external candidates bring new perspectives to the $1.6 billion-asset credit union, establishing programs for developing internal talent can improve chances for upward mobility and help bring diverse perspectives throughout FirstLight, Salazar said.

Employees are better prepared to fill leadership roles when the organization has "a culture of employee development where you're talking to the managers, finding out what are an employee's career goals, what are their aspirations and building unique development plans in place," Salazar said.

Diversity in the leadership ranks can help foster opportunities for reaching underserved markets, but it also could create points of friction between longtime staffers and newcomers.

Committees need to be honest about what qualities they want in new executives and in doing so, fully vet candidates during the interview process to see if they match the goals of the organization, said Shonna Shearson, CEO of the $542 million-asset First U.S. Community Credit Union in Sacramento, California.

"It's critical for both candidates and the boards to be honest about what they're both bringing to the table, what they really want in their vision and not just say the things that will help make a magic partnership," Shearson said. "Internal and external candidates should be evaluated, because boards should know that they picked the right candidate."

Among an environment of continued interest rate hikes, young professionals are prioritizing wages as a chief concern, in addition to benefits offered by employers and the overall work environment.

The three main reasons for employee attrition are insufficient wages, lack of career development options and cultural challenges, according to research conducted last year by Arizent, which publishes American Banker. The survey polled 113 human resource experts and 486 top leaders across the finance sector. 

But for those worried about salaries in the early to middle stages of their career, an initial focus on honing their skill sets rather than jumping from position to position based on pay can have long-term benefits.

A strong foundation in problem solving and analytical skills that comes from working in various business verticals can broaden a candidate's perspective and in turn, be applied to various C-suite positions, said Nathan Cox, president and CEO of the $375 million-asset InRoads Credit Union in Saint Helens, Oregon.

"What I recommend to my managers, and even when I'm involved in the recruiting process, I always tell candidates to not take the position for what it is. … Take this position for the next position that it can lead you to," Cox said.