Some CUs Can Expect A Long Period Of Turmoil, Turnover

AUSTIN, Texas - 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, according to a new study.

Garry Modrell and Charles Shanley, executive consultants for John M. Floyd & Associates' Executive Search Group, said every eight seconds, one person in the U.S. turns 60. For credit unions, that translates into 60% of CEOs retiring over the next decade.

"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," Modrell said.

In addition to having the need of a succession plan for their executives, it is important for CUs to retain their key employees, Modrell and Shanley advised. Replacing employees can cost 50% to 160% of an employee's compensation, which begins to cut into the bottom line very quickly.

Shanley cited figures from the 2006-2007 Credit Union Environmental Scan (E-scan) projecting the employment market is going to tighten. "When the unemployment rate drops, competition for top talent heats up," he said. "And with the unemployment rate dropping from 5.5% in 2004 to 4.7% in April 2006, the job market has gotten hot." (c) 2007 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com