How banks are preparing for a wave of boomer retirements

Industry TrendsSuccession PlanningFinancial ServicesFinanceCEO Succession
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November 29, 2021
2 min read
Industry TrendsSuccession PlanningFinancial ServicesFinanceCEO Succession
EXECUTIVE SUMMARY
Senior banking leaders are leaving their roles in record numbers.
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Excerpt from article originally published in American Banker by Laura Alix

Russell Reynolds Associates Consultant Mary-Caroline Tillman spoke with American Banker about the record number of senior banking leadership moves she is observing.

StonehamBank in Massachusetts recently began checking in with newer hires around the first anniversary of their start date.

A human resources staffer chats with the employee to assess what’s going well, what could be better, and what other roles the person might be interested in trying. The $687 million-asset bank had previously gleaned a lot of this information from exit interviews with departing or retiring employees. So the thinking was: wouldn’t it make sense to ask current workers the same questions?

StonehamBank, which is based in the Boston suburbs, hopes not only to improve employee retention and engagement, but also to cultivate the next generation of leaders. CEO Ed Doherty recalled that his predecessor, now-board chair Janice Houghton, wore every hat in the bank over her 50-year career. For his own part, Doherty worked in commercial banking, sales and marketing prior to his tenure as CEO. He wants the next generation of community bankers to be similarly well-rounded.
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Retirements compound banking’s image problem

Other senior-level executives have left the industry to pursue a second act elsewhere, said Mary Caroline Tillman, co-head of the global financial services practice at the search firm Russell Reynolds. The strong performance of the stock market has given those executives the confidence to try a new career path.

“We track in banking the number of people who move at the senior levels. And this is the highest level of movement that we have seen since the financial crisis,” Tillman said. “They’ve gone to fintech startups, to biotech companies, to some of their clients. They’ve gone into, maybe, venture capital, they’ve gone to" special purpose acquisition companies.

“Some of these bankers are saying, 'If I don’t do it now, then I might not get the chance again for a very, very long time.'"

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