AUSTIN, Texas, April 12, 2007 (PRIME NEWSWIRE) -- Credit unions lacking a succession plan to respond to a planned or unplanned senior level vacancy can expect to endure a long period of turmoil. Finding qualified talent in a shrinking labor pool will become a major issue for many businesses, two leading executive placement consultants told credit union executives today at the Texas Credit Union League's (TCUL) Annual Meeting (www.tcul.coop).
Garry Modrell and Charles Shanley, Executive Consultants for John M. Floyd & Associates, Inc. (JMFA) Executive Search Group, addressed conference participants during an educational break-out session at today's meeting. JMFA (www.JMFA.com), a profitability consulting firm, has helped thousands of clients dramatically improve their performance and the JMFA Executive Search Group applies that same experience to help financial institutions find the industry's top performers.
The Texas Credit Union League is the official trade association for credit unions within the State of Texas. On a state and federal level, the League represents nearly 600 credit unions state-wide, which are owned by over seven million members. JMFA is a corporate sponsor for the Conference -- themed around great sporting events -- which has attracted more than 700 credit union executives, board members and industry providers.
Modrell, who joined JMFA in 2005, was formerly with an independent executive search firm for seven years and has a particularly strong suit in recruiting for commercial banks nationwide. Shanley has specialized in executive recruiting and project management for more than 10 years. Prior to joining JMFA, he worked for several years as a recruiting manager specializing in the credit union market.
As leaders of the JMFA Executive Search Group, Modrell and Shanley possess a unique understanding of how financial institutions can assess their management strengths and weaknesses and formulate a succession plan tailored to the specific organization's requirements.
Planning for turnover is a must for long-term success
Modrell and Shanley took their audience on a statistical tour, noting that 60 percent of CEOs will be retiring with in the next 10 years. While that means that every eight seconds one person in the U.S. turns 60 -- it is numbers like this that should grab the attention of executives, they said. Not only do credit union executives need to worry about planned retirements, they must also plan for unexpected vacancies.
"When the Baby Boomer generation begins to retire, credit union management teams that have not adequately prepared themselves may be in a detrimental position," stated Modrell. "During a period when credit unions should be growing by offering new products and services to target this new group of retirees, many may be scrambling to cover just the basic operations."
In addition to having the need of a succession plan for their executives, it is important for credit unions to retain their key employees. In a tight labor market this becomes even more critical as competitors work to lure away top talent. Replacing employees can cost 50-160 percent of an employee's compensation, which begins to cut into the credit union's bottom line very quickly. Some of the key reasons employees leave include:
* lack of challenge/bored;
* minimal recognition;
* poor management; and
* inadequate compensation.
Quoting from CUNA's 2006-2007 Credit Union Environmental Scan (Escan), the leading strategic planning resource for the credit union movement, Shanley stated, "When the unemployment rate drops, competition for top talent heats up. And with the unemployment rate dropping from 5.5 percent in 2004 to 4.7 percent in April 2006, the job market has gotten hot."
The pair concluded their remarks by encouraging all participants to begin a concerted effort now to develop a detailed succession plan for their retiring executives. Plus, they suggested this might be the opportune time to look at their credit union's retention strategies.
"The road looks rocky; the competition for talent is tough, and you can't change either one," Modrell conceded. "But you can begin now to ensure you create a "best place to work" to win the war for talent. Create a succession plan to be prepared for planned or unplanned vacancies so you don't leave your members high and dry with executive turn-over. Your efforts now will have an immediate, positive impact on both your credit union's short-term and long-term performance."
About JMFA:
John M. Floyd & Associates (JMFA) is a profitability and performance improvement consulting firm and a leading provider of overdraft privilege programs serving more than 2,000 financial institutions in 49 states and Central America. JMFA is also recognized for training, account acquisition, executive placement and earnings enhancement programs, as well as product, service, pricing and technology improvement consulting. As a direct result of our programs JMFA has helped thousands of clients dramatically improve their performance and bottom line. To learn more about JMFA please visit www.JMFA.com or call 800-809-2307.
For More Information or Interviews:
Steve Swanston, Executive Vice President, John M. Floyd & Associates, 800-809-2307 Steve.Swanston@JMFA.com, www.JMFA.com