Credit Union and Retirement

By Joyce Moed, Reporter

DALLAS–Many credit union movement leaders agree that the unstable economy is causing many would-be retirees to rethink their plans.

Chris Thomas, regional staffing manager for Credit Union Employment Resources, said he is also seeing an increase in the number of retirees returning to the workforce due to the downturn in the economy.

“Unfortunately, many organizations have implemented hiring freezes, so jobs are a lot tougher to come by,” Thomas noted.

Thomas said CUER is seeing more job seekers than job opportunities.

“Furthermore, there are currently even fewer opportunities for executives,” he said. The positions that do come available are more for entry-level positions, he said. And many credit unions are going the temp-to-hire route, he said.

Susan Looney, vice president of human resources for the Texas Credit Union League, said CEOs holding off on retirement due to the economy is not a trend they are currently seeing. However, she noted that during a downturn economy, turnover is typically low.

“People want to hold onto their jobs because they know that few opportunities are available,” she said.

Looney cautioned that employee morale can sometimes be adversely affected during difficult economic times, which in turn could affect productivity.

“Some employees may be struggling financially and that can affect their ability to focus at work,” she said. “With constant reports of the rising unemployment rate and widespread layoffs, employees might become overly worried about their own job stability and that too could affect their productivity.”

Karen Houston, vice president on OnBalance, a service of Credit Union Resources Inc., stressed that even during times like this, succession planning is still critical.

“Credit unions should always be prepared for the ‘what if’ so as to not interrupt operations,” she said. She added that once a succession plan has been created, it must be re-visited annually.
According to John Vardallas, founder/CEO of TheAmericanBoomeR Group in Madison, Wis., some CEOs will be asking boards to delay retirement “due to the 35 to 40% losses in most 401k retirement benefit programs.”

“This will affect recruitment because CEOs will be staying longer and the upward mobility career ladder in credit unions will be stymied,” he said. “The key issue is whether these CEOs are and will remain competent. If they have been on the marginal side in terms of their performance–i.e. just waiting to retire–this will hamper the progress of the credit union to deal with the economic challenges we are facing today.”

Vardallas said that the key issue for retention is the “competency factor.”

“If CEOs will be staying on, they must maintain their leadership effectiveness, keep up their learning curve, and really think outside the box, and be innovative because old paradigms will not fit the new reality business landscape,” he said.

Vardallas said that succession planning will be affected because boards will be–and should be–looking for new leaders to cope with change, and steer the credit union away from “same old same old strategies.”