Credit Union Succession Planning for Business Resilience

Credit unions are facing growing rates of change, economic uncertainty, slow membership growth, and an aging workforce. Succession planning is one way credit unions can mitigate risks and proactively address challenges in the industry. Continue reading to learn how to build business resilience with credit union succession planning.

What is succession planning?

Succession planning is a key process in preparing a business for future needs. Succession planning ensures that a credit union has the talent, skills, and competencies necessary to meet the needs of its members and overcome predicted challenges.

To do this, credit unions use succession planning to identify qualified employees to fill key positions should they be vacated for any reason (such as retirement, sickness, or termination). The goal is to create a valuable talent funnel to fill these positions, prepare for losses, and prevent interruptions to core business functions.

Beyond being a necessary business practice, succession planning also promotes employee engagement. Employers who provide development opportunities demonstrate their commitment to the long-term success of employees.

Effective succession planning programs include:

• Information about possible career streams;
• Self-assessments or multi-source assessments to evaluate employee progress; and
• Learning resources that target the development of specific competencies.

Why is credit union succession planning so important right now?

By 2030, one fifth of the US population will be over the age of 65. This means organizations in all sectors will need to be prepared for an increase in retiring employees.

Credit unions also face new challenges from mergers to new technological advancements. When developing employees for the future, they will need to be well-versed in these developments, including cybersecurity, AI, and automation.

Career development is also a key to talent retention. People now have access to learn about any topic or skill on a variety of platforms. “We live in an age where people are bombarded with ways to seek improvement,” says Lisa Miller, founder and CEO of CUES Supplier member cuCoach, a coaching firm for credit union professionals. “They’re going to expect a commitment to their improvement from their employers as well.”

Low employee engagement can cost the global economy an estimated $8 trillion. Providing employees with opportunities to work towards long-term goals can improve engagement and retention.

Is your credit union ready for the future?

A leave of absence, a letter of resignation, or other circumstances can happen at any moment. Your answers to the following questions may indicate how prepared your credit union is to handle future losses.

• Are there suitable replacements planned if an officer suddenly departs from the credit union for any reason?
• Does the credit union board have the capability to recruit a suitable replacement?
• What knowledge or contacts will the credit union lose if an officer departs, if any?
• What positions will be affected by the departure of an officer? How can the credit union minimize risk?
• Is the credit union over-reliant on certain officers? Can other officers develop these skills and knowledge?

Metrics to Determine Strong Talent Funnels

What does it take to become a leader in your credit union? What aspects should you look for when searching for potential candidates to fill vacant leadership roles? How can you ensure you assess candidates against fair and objective criteria? The answers to these questions are found in the steps below.

Future Business Needs

First, you’ll have to start by identifying the current state of your credit union. What knowledge areas, skills, and competencies do you have? Are there any gaps that career development can address?

To future-proof your credit union, you’ll also need to identify the new capabilities your credit union will need to address future needs. Think about upcoming challenges, new technologies, and industry trends. Then consider whether your workforce is equipped to handle these or if certain skills and competencies need development.  

High-Potential Candidates

Competency dictionaries and architectures establish what behaviors are needed to succeed in the roles across an organization. Competencies go beyond hard skills to holistically represent the nature of the role. Likewise, credit union succession planning needs to go beneath the surface to understand the qualities of successful leaders.

Miller explains, “When a manager comes on board, we teach them the hard skills they need to run a branch or department, but the people side of the job often gets neglected. Emotional intelligence is big on my radar, encompassing empathy, self-awareness, self-regulation, motivation, and social skills.”

New to competencies or how to use them? Check out our deep dive.

Employers can use competency profiles to compare the desired performance of an employee with their actual performance. Employees who have mastered their job are proficient in the competencies outlined in their competency profiles. Often, these employees are asked to help and guide others. These are the employees that are often identified for credit union succession planning.

Developing Employees for Career Growth

Employees and managers can also compare the competency profiles of two different jobs to see what an employee needs to develop in order to grow into the new position. Quinto allows users to quickly compare competency and skill levels to view the requirements and proficiencies for different roles throughout the organization.

When building your competency framework, this feature helps you create fair and consistent competency profiles. When succession planning, competency level comparisons show you what competencies an employee needs to develop in order to qualify for a higher-level role.

How to Implement Credit Union Succession Planning

Stage 1

• Establish a competency architecture and competency dictionary. Don’t currently use competencies in your credit union? Check out our complete guide to get buy-in for new competency programs.
• For each group to be profiled, define the typical roles and career streams for the job group.
• Define how competencies will be used to support recruitment and selection.

Stage 2

• Develop and implement programs for high-need job groups. Consider which job groups are likely to lose talent or face dramatic changes.
• Determine the infrastructure required to support effective and efficient career development and succession management.
• Communicate possible career streams and opportunities for career growth to employees at every level of the credit union.

Stage 3

• Identify individuals who show mastery in their current role and have high proficiency in business-critical competencies.
• Create prioritized development plans that fill gaps between these individuals’ current abilities and those needed for a desired future role. This may involve cross-training or lateral movements first.
• Have regular check-ins with employees preparing for higher-level roles.

Preparing Tomorrow’s Leaders

Succession planning is all about finding and developing tomorrow’s credit union leaders. According to Joe Menninger, former CEO of Your Best Credit Union, “Managing a small credit union requires a diverse set of skills, as you are led in many different directions daily. On some days, you may work on loans, marketing, business development, accounting, collections, compliance, technical issues, and employee needs. Multi-tasking is an essential competency needed to function daily.”

At the end of the day, meeting the needs of credit union members is the number one priority. This is why Client Focus ranks as the most popular competency credit unions are using to build competitive workforces. Learn what other top competencies you should hire for and develop from our latest data. Access the world’s largest library of multi-level competencies to manage credit unions with Quinto.