In a rapidly evolving financial landscape, attracting and keeping the right leaders is more crucial than ever. In this episode of CU On the Show, Doug welcomes Charles Shanley, a seasoned executive recruiter specializing in the credit union space. Charles shares his insights on the current trends in credit union leadership, the importance of cultural fit, and strategies for boards and executives to secure top talent.
Key Trends in Credit Union Executive Recruitment
- Increasing Turnover Due to Retirement and Forced Departures
The wave of baby boomer retirements is well underway, but it’s no longer the sole driver of executive turnover. Charles highlights that about half of the current CEO vacancies he’s handling are due to forced retirements. These forced departures often stem from a disconnect between the CEO’s vision and the evolving needs of the credit union. Boards are increasingly seeking leaders who can innovate and navigate the complexities of a changing regulatory environment.
- The Importance of Cultural Fit and Vision
In credit union recruitment, cultural fit is paramount. Boards are looking for leaders who not only have the right experience but who also share the credit union’s values and vision for the future. Charles emphasizes that innovation, adaptability, and emotional intelligence are becoming key competencies in executive searches. The ability to execute strategy and lead with vision is critical for CEOs who want to thrive in this sector.
- Challenges in Retaining Top Talent
One of the biggest challenges for credit unions is retaining top talent, especially when executives are increasingly mobile. Charles points out that today’s leaders often move on after five years, a stark contrast to the decades-long tenures of the past. To counter this, he suggests that boards need to keep executives engaged by providing new challenges and opportunities for growth. Compensation plays a role, but non-economic factors like leadership development and cultural alignment are often more significant.
Final Thoughts
- Adapting to Change: Learn how credit unions can stay competitive by embracing innovation and attracting leaders who are forward-thinking and adaptable.
- Building Stronger Boards: Understand the role of the board in ensuring long-term success by recruiting CEOs who align with the credit union’s culture and vision.
- Retaining Top Talent: Discover strategies to keep executives motivated and committed, reducing turnover and strengthening the leadership pipeline.
Stream the Episode to Learn More
Credit unions face unique challenges in recruiting and retaining top talent. As Charles Shanley highlights, success lies in finding leaders who are not only skilled but who also share the passion and vision that drive the credit union movement. If your credit union is looking to strengthen its leadership team, listen to the full episode and explore the actionable insights shared by one of the industry’s top executive recruiters.
Listen to the episode and take the first step towards fostering effective leadership in your credit union.
Charles Shanley and Shanley Search Partners are not affiliated with or endorsed by ACT Advisors, LLC.
Audio Transcription (pulled from the podcast)
Doug 00:28
Welcome to CU On the Show, Charles Shanley, I’m delighted to have you join me today.
Charles Shanley 00:34
Thank you, Doug it’s a pleasure.
Doug 00:36
Charles, I’ve seen your name in the credit union movement for a long time, so I know you’re making good things happen. Tell me, how did you get started working with credit unions, and then tell me what activity you’re involved in on a day-to-day basis today.
Charles Shanley 00:50
That’s a great question. Well, I guess it all started, I come from a family of Headhunters from the northeast. My father was a chemical engineer, and he got a call from a recruiter one day, and he was so interested in what that person did for a living, he moved us all to Texas to start up his own recruiting firm, and that was 47 years ago. So, I’ve kind of cut my teeth in all that. My brother owns his own search firm, but working with the family business was really not my cup of tea. So I went out on my own. And after that, for a period of time, I started working for now, a competitor of mine. This is 25 years ago, and we specialized in credit union placement, executive placement, CEO placement, and did that for a number of years, until I got recruited myself to start up a search division for a larger company and build up that whole search practice, and specifically in credit unions and banking. So we played on both sides, and I did that for 14 years, and eventually, kind of took that division into a standalone which is my company today, Shanley Search, and I’ve been cruising along for well over six years now and loving it.
Doug 01:54
There’s some very, very special people in this movement, and I’m glad to see you recruit them into successful positions. So what does that mean in a day in, day out basis, what is your normal work week look like?
Charles Shanley 02:05
Today, lately, we’ve been doing more CEO placements than anything else it seems like. And I think we have, seven open across the country, and two under contract that are coming in just for CEO for credit unions alone. So my involvement is really, obviously running the running the company, but I tend to get a lot more involved on the board side when working with boards on CEO placement. I typically will run a lot of those projects, those CEO projects, but we do everything, anything really C level below that. And oftentimes, this is a relationship business, and it’s all about, you know, building relationships. And always has been, and we never have really had any sales. It’s all word of mouth and that’s done really well for us. And so, it’s a matter of just doing a good job for folks and being fair and honest. The bulk of what I do today is working with credit union boards and credit union CEOs and just being in the industry. Love the industry. It’s all about the passion, and it’s much different than working on the banking side, I would say. And, you know, it’s funny, you get a get a bunch of bankers in a room and, and they’ll curse the credit union industry all day long, but you get a banker by himself in the room, he’ll step aside and go hey I’ve always wanted to work for a credit union. I love the work in this industry, and I’m passionate for what I do, but that’s day in that’s kind of what I’m doing. I’m either interviewing candidates or work talking with boards, or we’re talking with folks like yourself just networking and getting to know people in the industry,
Doug 03:25
So you’ve been at it a long time in aggregate between those things. So tell our listeners a bit about the trends. We all know the data that there’s a huge number of folks running credit unions that are in their early 60s and are going to be retiring very soon. Are you seeing that in the actual data, as far as the openings, I think you said you had seven right now? But when you look across the industry, what does the data tell us about the volume of turnover that we’re seeing these days?
Charles Shanley 03:54
That’s a great question. I would say, before it was primarily, mostly retirements, and most of the work we’re doing on the baby boomers retiring and but, you know, these past couple years, I think out of those seven, I think half are retirements and half are forced retirements, I would call it. And the ones that are forced retirements, are just a lack of vision and innovation are the twof areas where CEOs are no longer working. Or it’s just the culture has gone in a different direction. So right now it’s about half and half retirements and terminations is the other half of that. In the past it was definitely leaning stronger towards just the retirement side, but there’s a lot of change. It’s a changing environment. And, you know, there’s a whole list of competencies we look for in CEOs today, and a lot of those have been the same. A lot of those are new. We’ve always looked for, probably culture fit as number one, with vision, innovation, probably right underneath there, and some strategy and the execution of strategy. The DEI emotional intelligence is definitely creeping up the ladder, and just adaptability in general. Changing time, changing economies, changing regulations that, you know, that has been a pretty core competency these days. Of course, you got the overall experience you’re looking for, but it’s changing. You know, what we look for is changing. We’re looking for innovation. And it depends really a lot on the size of the institution. Sometimes, you know, if you’re looking at a billion dollar plus, it’s somewhat a different thing that we’re looking for than a $300 million credit union. But it depends on the board, depends on the culture depends on their strategy. Are they conservative or they want to grow? And hopefully, more and more are wanting to grow these days.
Doug 05:24
How about just the raw number of openings across the industry. You know I would expect that the curve would be upward sloping, that we would be seeing every year, probably at a not steady rate, but every year we would see an increasing number of folks leaving the executive suite because of retirement, just because that’s the baby boomer tail coming off. Are you seeing that, is that happening?
Charles Shanley 05:50
Oh, of course, absolutely. A lot of retirements at all levels. The structure kind of has changed. In the past, it was your loyalty meant a lot, and you were loyal, and you stayed there for a really long time, and people love that, you know, today, it’s not quite the case. You know, we put out a proposal today, and it’s for CEO search, and the person’s been there for 30 years. That’s very, very common on the retirements that we see today. That’s probably not going to be the same moving forward. We see candidates moving along every five years. Whether it’s for career advancement, going to a larger institution and becoming more innovative. So that’s a big change from the past. You don’t see the long tenure like you used to have. Most of the retirements we have, they are those long, long tenure at the same institution for a long period of time, which is great. The boards are changing somewhat, because they haven’t gone through a process before in a long period of time, if they have, and it might be that they had an internal candidate, and they just, you know, that that’s how they did it in the past. So there’s a lot of education, I think that happens with boards today, on what has changed in the environment, what has changed even from the compensation side? The whole industry has been changing dramatically just in the last 10 years.
Doug 06:56
You just said, candidates moving along every five years. So let’s go a little further into that, because I’m imagining that a lot of those, maybe even almost all of those boards, were very negatively affected when that occurred. The candidate moved on after five years. And you as the board probably thought you were going to maintain that candidate. Can you tell us some stories about when you’ve seen that kind of thing happen, and even more importantly, some what they could have done to prevent it?
Charles Shanley 07:26
That’s a great question. Yeah, it does hurt a credit union when you’re only there for five years. I mean it takes, you know, up to a year to just to get to get things going and start building. And it does hurt them when they leave within that time period. On our side, we the people we place, we like to hear a 10 year commitment. On the minimum side, we like that they make a 10 year commitment, but that’s not always the case. And so there are a number of things you can do. I heard years ago, and I think it holds true today, is that the number one reason why CEOs leave is a lack of challenge. They’re looking for changing, for growing and so if a board is stagnant, they don’t want to grow, they don’t want to try new things that candidates not going to stay, if they’re an innovative candidate. And that’s what you’re looking for today. And so that’s probably a big area of it, too. The things you can do are changing the environment. I love it when, and you never hear this in the banking side, but when you have a credit union CEO, and every couple years, they’ll change out their C-team, and they’ll switch up the responsibility so they truly have aspirations for their for their team members, to become a CEO one day, if they want to. And so they’ll do that in helping develop those people. You never hear about it on the bank side, but they’re okay with them leaving for another opportunity. And I love to hear that. If you’re doing things like that, they’re going to stay there, want to learn, they want to grow. Of course, there’s the compensation parameters, you can always put a SERP on it, you know, the golden handcuff. Keep them around for a period of time. That’s the easy way to do it, I would suppose. But, keep it exciting. You know, give them more responsibility and let them grow. Allow them to grow, give them more educational opportunities. Go to Carville leadership, extraditional training, CUES CEO Institute, there’s the Emerging Leaders Program. And there’s a number of examples of things and what people should be doing if they want to grow in their career, but I think that’s a big part of it, supporting the people that work for you and allow them to take on the challenges.
Doug 9:16
Interesting. So, you spent more time talking about non-economic rewards rather than economic rewards. And would you say that, in your experience, that is the way the candidates rank, the priority of why they left? Is it non-economic issues over economic?
Charles Shanley 9:33
Yeah I’d say it’s non-economic. And I’d say it’s not tied really to the money. We do financial compensation analysis on every search we do at the very beginning of the process. We have all the surveys out there. We have our own data that’s even a little more little more accurate than survey data. We want to make sure that your range there, or the clients, range, credit unions, range, is within the market, and as long as you’re paying market, we’re still going to be okay. But it’s the other things that become more important. If money is your number one motivator, you’re probably going to not make it through our search process. The motivating factor is going to have to be different. You don’t want this position for the right factors. What’s motivating you, whether it’s the area, the level of what you’re learning and growing from this institution. And so those things are more important to us as a search firm than hearing about money. You know, money could be the driver, they have those competitive ranges. I got off the phone with a board member last week, and their CEO left because there wasn’t a SERP in place. Well, he was there for 30 years, and they had the opportunity to educate themselves on what a SERP was and they were so upset with themselves because they turn it all down and then he left, and when they realized what a SERP could be, they would have been up for it. And so you have to be educated constantly, knowing what’s going on in the industry. Be aware of the industry, and a lot of those boards where they haven’t been going to conferences or staying in touch, and part of it’s a CEO responsibility too, you know, making sure that the board is educated on all of those areas, and attending conferences so they’re up to date on that information so those things don’t happen down the road.
Doug 10:56
You said another thing that keyed my thoughts, if you like the executive, retain them with a SERP. However, there must be times, probably many times, when a credit union wants to recruit somebody even though they already have a SERP. So how do you deal with that? Do they just pay more money to overcome that, or do they just put a bigger SERP on top of it? What’s the strategy when that happens?
Charles Shanley 11:19
That’s a good question. So as a search firm, that kind of stops us cold sometimes. It does what it’s supposed to, that handcuff you know? A lot of it’s based on Cliff vesting, where you have to stay X amount of years before you leave. But yeah, if it’s at the end of that cliff vesting, they’re not leaving, probably, and they shouldn’t want to leave. And it becomes a big challenge for us to recruit them away. It is effective. There are things you can do. I mean, the candidates that we speak with, and they have a SERP, we go into the details, we try to figure out what they’re losing. Like I said, it depends on asset size. But really, you know, if you’re a credit union over 100 million in assets, you should be talking about SERPs, it can stop us dead. But the things that the credit union can do is, you can provide some kind of a sign on override that, which we’ve had, we did that last year with a large credit union. But you’re probably going to have to put a SERP in place. I think the most common are kind of a split dollar these days. Some of the F plans are moving away from those areas, but you’re gonna have to do something to offset that. But the candidate may not want to even leave because of that. A lot of times, once they’re vested, then they’re available again. So it’s all about, sometimes all about the timing of it all.
Doug 12:19
It’s kind of like a hacker telling you, if you use that software, I pretty much can’t hack your system. If you put a SERP in place, I’m probably not going to be able to recruit your executives out of your credit union.
Charles Shanley 12:31
It can be effective. Sure can, yeah.
Doug 12:34
If you are a senior executive trying to recruit for the SVP level, any kind of top three ideas for making the top hire? For things that the senior executive can be doing, not the board now, but the senior executive?
Charles Shanley 12:49
I think it’s a lot of working on yourself and getting more responsibility. I can look at a resume, and I can tell that they have aspirations to move in their career, and they’re making the decisions in their life to go that direction. You know, we’re looking for upward mobility, obviously, and taking on more responsibility. You know, they’re volunteering for more responsibility. They’re getting more involved in the community. Depends on the role, of course, you know. But they’re getting more certifications. You know, they’re going to get that MBA or if they’re not, they’re getting some CCE through CUES, or, like I mentioned, some of the leadership programs you can do. Those things are quite effective, and a lot of it provides networking. Networking in this industry is huge. It’s a small industry. That’s how we find a lot of our candidates. It’s not about posting the position. It’s about the networks you have, about the people you know. Use that, if not get into those networks. Whether it’s networks within what you’re doing, whatever it be, the retail side, the finance side, or being on boards. It becomes very strategic on what your approach is. Maybe working with your CEO on making sure that your CEOs aware of your aspirations. Get on a development program. It kind of goes into succession planning a little bit. It’s this huge word, succession planning. Well, does anybody really do it? Not really. And so, you know, you always talk about succession planning, but it’s rarely done. It might be done at the CEO level, but it’s really not done below that, and that’s what you should be doing. Push your CEO. Tell them you want to be further developed. You have aspirations to be at that C level. It’s a lot about working on yourself and determining what your goal is, what you want to become, and then taking the steps to do that.
Doug 14:22
Thank you for those ideas. I know I should go more into those, but I listen to what you say, and then I think of another idea, which is, you’re running $100 million credit union, the CEO, and you really have this vision that you want to run a $300 million or $500 million credit union. You know, you’re at the league events, and you’re doing the training and you’re networking. Are you actually trying to network with the board members as well? Are you trying to make a name for yourself at the activities that are going on the board? What are the key things you do to really stand out in the space, anything in particular?
Charles Shanley 14:58
Yeah, well, there’s a lot you can do. I mean $100 million is a little small these days, but if you wanted to be a $300 million credit union the biggest things you could do is find out what the trends are and start working on innovation and building that out. I mean, $100 million you may be outsourcing quite a bit. When you’re moving to a larger credit union you’re gonna bring some of those things in house and you’re looking for additional revenue streams. The state of New York has this great group. It’s a CEO networking group, you can be any asset size, really. And it’s just a bunch of CEOs that get together and talk things through. That’s just one example. There’s examples of that all across the country. Be a part of these local CEO network groups, and it’ll go a long way. Share ideas. And it puts you in the room with credit unions that are larger, maybe even smaller than you too. You talk about the troubles and, but that’s just once again, building that network. Yeah, it helps going to conferences and talking with as many people as you can. Don’t just go to the conference, go to the session. I go to those conferences, and I sit in all those sessions. It’s about the networking for us. But, you’d be surprised how many people really don’t go to those sessions. But yeah, just push yourself and see who’s out there. Get involved.
Doug 16:03
There’s a lot of recruiting firms, some of them do a variety of things, right? They do recruiting and they do other things. How does the board even begin to figure that out? I know that the standard process is to find three firms and talk to the three of them figure out which one you want to do. You’ve been in the industry a long time on your own and then as part of a larger organization a couple of different times. So how would you suggest an executive team, evaluate a search partner? Tell us a bit about that.
Charles Shanley 16:30
That’s a great question. There’s a number of questions that the board or that search committee should be asking that firm, starting with, what’s your experience with working with other boards on CEO placement. Specifically, what experience do you have working in this market? Their internal candidates are always involved in any process. It doesn’t matter to us, internal candidates go through the same process, just like the external, every single step. So they’re evaluated just the same. You need to be asking success rate. What’s their guarantee period? Those are questions they should be asking. It’s not about pricing. We’re going to be probably right in there with everybody else on the price. We may charge even a little bit more. I think the biggest thing is, who also is going to be working on that project? I don’t work on all projects for our company, but I work on most of our CEO projects directly. So who are you working with? You know, that’s a question they need to ask. What are their ties to the industry? What’s their process for interviewing candidates? And are they doing behavioral interviewing? Are you doing profile testing? We do profile testing. You can be a really good interviewer and have the right answer to any question, whether it’s true or not. And so testing kind of helps us. It allows us to make sure they are who they say they can’t lie on the testing. There’s a lot of components that go into a search process, probably more than we want to talk about today. But, you know, there’s project questionnaires you have candidates do. There’s a lot of these little steps, a lot of different tools that we use along the way. You know, we’re on the interviews with the boards, you know, we’re, we’re recording those interviews. You have to walk the search firm through the whole process itself. I think our biggest strategy, well, it’s not a strategy, our word of mouth is our biggest sales for us. I think it’s really because we’re just fair and honest. We call candidates back, we give them feedback. If they don’t make it, if they don’t get presented. If they truly want to be a CEO one day, or want that SVP role, we want to help them. It’s a providing them with that constructive feedback. I think that stands out a lot. It’s not just a numbers game. We’re gonna make enough money to keep the lights on and put in our pocket, but it’s about what’s the long term here. We spend a lot of time on front end, getting to know people, getting to know that institution. We’re on site, we’re working with that board. We’re meeting the team, we’re spending a lot of time just understanding the culture. Culture is number one, it’s the most important thing we look for. Sometimes there’s a broken culture. So sometimes it’s finding somebody that has worked through that. You might think your culture is perfect, but when we start digging in, and we’re there for a day or so, we’re gonna find some holes in there if there are any and we’re gonna share that with you. It’s a full, just a full analysis all the way around. Like I said, just being fair to people and doing a good job and just enjoying what you do, I think too comes out.
Doug 19:03
Have you had any situations where you got fooled? Where there was a candidate and board and you went through the whole process and really thought they were a fit for each other, and then they got together and something blew the relationship up? Anything like that that’s happened where you had some takeaways you can tell us about?
Charles Shanley 19:22
You know, I wish I did. I’ve seen it happen, and that’s why we’re hired, part of it, you know. So that all happened. We got this candidate, it wasn’t what we thought, and then we ended up hiring you. But nothing recent that really comes to mind. I’m being honest here too, Doug. Because of all the steps you do, you know, what’s right and there shouldn’t be anything that should come up. If it’s done right, it should stick.
Doug 19:44
Charles, thank you for your work in the credit union movement, in helping the very, very important ability of this movement to recruit and to retain top talent in the C suite, it is absolutely critical. I think you’re a part of what’s making the movement strong. So thank you for the work you do. Any final thoughts for our listeners?
Charles Shanley 20:05
My pleasure. No just enjoy, love the industry. Let’s keep it going. It’s a great industry. We love working in it. It’s just got a great feeling all the way around and that’s why I love working in it. And it’s just, it’s just a wonderful thing to be a part of.
Doug 20:17
Charles Shanley from Shanley Search Partners, thank you for joining us today, and we’ll talk again soon.
Charles Shanley 20:23
All right, take care.
