By Kim Kreps
Vice President, Executive Search Director
As the banking industry continues to recover from an historic downturn, community-based institutions are still feeling a great deal of pressure from on-going economic challenges, competition from non-conventional service providers, and increased regulatory expectations. In this environment, the success and viability of a bank is due, in large part, to the expertise and skill of its leadership team.
But with 50 percent of bank CEOs and other C-level managers expected to retire in the next five years, competing for the level of expertise and leadership skills required to fill the C-Suite is becoming more and more difficult for many institutions. This is especially true if they don’t have the time and resources necessary to precisely target their executive search efforts to get the candidates they need in today’s competitive recruiting terrain.
Luckily for some banks, leadership can be developed from within the organization very successfully. Internal candidates are already familiar with the culture and staff, as well as the opportunities and challenges the bank may face. And by establishing an internal path to leadership, you have a better chance of retaining up-and-coming stars. Plus, you will demonstrate to other staff that you reward hard work and loyalty.
But if you determine that you don’t currently have the bench strength necessary to fill leadership positions, or you want to test the waters to get the benefit of fresh ideas from someone who has seen things from a different perspective – or from outside of the industry – there are a few things you must consider in order to make the best use of your time and ultimately find the talent you need.
Combining an efficient process with quality resources provides the best long-term results
Recruiting qualified, top-level personnel is a time-intensive process that requires access to a broad network of qualified candidates. In addition to tapping well-known local resources, connections to social media networks, industry job boards and professional databases are necessary for successful targeted recruiting efforts in today’s fluid job market.
And as members of the Millennial generation are poised to fill leadership vacancies created by retiring Baby Boomers in banks throughout the country, recruiting organizations that shift their focus to more social media sites – like LinkedIn, Twitter, Plaxo, Jobster, Facebook and others – will gain access to a much greater pool of young talent. If your social media strategy only consists of posting job openings on your website, you are missing out on an opportunity to create interest in your brand and attract potential job candidates.
Don’t overlook the fact that Millennials are using technology to learn about your institution well before they meet for a face-to-face interview. If you don’t have an online presence, or the one you have is outdated, you may lose out to a more socially connected institution when going after younger job candidates. Likewise, you should do your homework and find out as much as possible about your candidates. Visit their LinkedIn profile to learn more about their work experience and what interests them professionally and personally.
Set the stage for long-term retention
According to the Bureau of Labor Statistics, replacing employees can cost an institution between 50 and 160 percent of their annual compensation. So once you have the right leadership personnel in place, how do you ensure that they remain happy and productive employees for the long term?
This is especially important to consider when recruiting Millennial candidates. Keep in mind this age group doesn’t stay in a job very long if they aren’t satisfied. So make sure you accurately represent your work environment, job responsibilities, perks and opportunities for advancement from the get-go. Then follow-through with a retention plan that is based on the following:
Benefits can seal the deal
Clearly, the salary and accompanying benefits you offer will always play a crucial role in recruiting and retaining upper level management. To secure a highly qualified candidate, you’ll need to make certain the base salary is at the very least competitive with – if not better than – other financial institutions in your region. Then consider other ways to sweeten the deal over the years, such as annual percentage increases and/or bonus opportunities, as well as insurance coverage and deferred compensation, such as supplemental executive retirement plans (SERPs).
Additional “perks” at this level can include a car or car allowance, memberships to local service organizations or a country club, and reimbursable expenses such as professional dues and educational expenses.
First impressions are lasting
An effective on-boarding program is one of the best ways to make new employees feel at home from the first day of employment. For C-level personnel, provide an overview of any committees or special projects they will be assigned. Identify the institution’s board members and explain a little about their history with the organization, along with their strengths and community involvement. As soon as it can be arranged, provide introductions to board members, community groups and civic leadership, especially if the employee is new to the area.
Create an environment for success
Once clear strategic direction and job responsibilities have been shared with a new leader, it is important for the board to implement a “hands-off” management philosophy and leave the day-to-day management up to the new leader. This will demonstrate your trust in his or her ability to succeed and create an atmosphere of cooperation.
Provide growth opportunities
Talented, ambitious leaders won’t be happy for long in a status quo organization. Make sure you provide opportunities for your new CEO to grow by “challenging” him or her to continually look for ways to improve the bank’s performance. Make sure that adequate resources are available to support these efforts.
Take the time to say thank you
Everyone needs to know when he or she is doing a good job – including the person at the top. One of the easiest – but most often overlooked – ways to motivate a CEO is through an occasional pat on the back and/or words of appreciation.
Vacancies at the top occur for any number of reasons. When the leadership baton is passed smoothly from one leader to the next, it is much easier for a bank to maintain uninterrupted business and customer service. If you don’t have the resources internally to conduct a thorough executive search, a recruiting firm that knows the banking industry and maintains a current network of professional connections can give you an advantage over the competition, while saving you a tremendous amount of time and effort.
Published by Western Independent Bankers
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