A lot of credit unions will be shopping for gold watchesthe next few years as large numbers of CEOs retire.

That retirement wave isn’t unexpected. It’s been predicted forsome years, although the impact may have been slowed by a slumpingeconomy. But executive recruiters say they saw their business growin 2011 as economic conditions improved and CEOs felt morecomfortable actually carrying out their retirement plans.

Mike Juratovac at O’Rourke and Associates noted the credit unionindustry has been talking about a retirement wave for 10 years.

“If you look across the industry, regardless of geographiclocation, you can point to large pockets of leadership nearingretirement,” he indicated. “That’s simply the reality right now. Ithink the industry has been preparing–some organizations a littlemore thoughtfully than others.”

In 2011, Juratovac saw probably the most significant uptick inCEO retirements in a decade. He believes many CEOs had delayedretirement, not wanting to subject their credit unions to a majortransition in during the economic downturn. Now that conditionshave stabilized, people are feeling better about stepping out.

“We saw significant CEO activity in the Midwest and Pacific Northwestlast year, and this year we’ve been busy in the Southeast. But Idon’t think we can point to a geographic trend. It’s more of anational, industry-wide trend,” he said.

Will this trend accelerate? Not necessarily, Juratovacpredicted. But he does expect activity to remain consistent withcurrent levels. While cautious about translating this intopercentages, he said the firm conducted 25 searches in 2011 alone,many of them for $1 billion credit unions. That was an increase of20% to 25% over the previous year.

The nature of the transitions was different, he added, movingfrom a lot of workout situations and regulatory-influencedleadership transitions to planned retirement.

Does this mean credit unions will have to boost salaries toattract talent?

“I don’t know that current market conditions are necessarilyhaving an impact on CEO compensation,” Juratovac answered. “Therehave always been those credit unions that are competitive andprogressive when it comes to executive compensation. Then there arethose organizations that have not necessarily kept up. Theyexperience sticker shock when going into the market for a newCEO.”

“I do think that while at one time a candidate may have beenflexible on compensation in order to land a CEO opportunity, todaya comprehensive, competitive compensation package is reallycritical to being able to recruit and retain top talent.”

What about the impact on other management level employeeseagerly eyeing an opportunity to advance their careers? Perhaps thechief financial officer becomes the CEO, creating an opening forsomeone to snag the financial job. The talent pool has tightened upa bit, Juratovac indicated. So there is pressure on compensationfor chief financial officers, chief information officers andothers.

The good news for boards seeking to replace a CEO, he continued,is there are a lot of talented, highly qualified individuals whosimply have not had the chance to step into a CEO position. Thereare also current CEOs ready to move into a larger organization.

“The larger the credit union, the more the candidate pool wouldweigh toward current CEOs,” Juratovac said. “But in general, we’reseeing a healthy mix of candidates. More often than not, boards arestill going out and conducting a search even if there is strongsupport for an internal candidate.”

“Most boards will look at that transition as a fiduciaryresponsibility and want to be sure they look at the market and whatthe market will produce for the opportunity they have to offer. Butmany of our clients have a commitment to their corporate strategyand organizational culture. That positions a strong internalcandidate quite well if the credit union isn’t looking for a changeagent.”

Greg Fouks at TalentTracker recalled that five or seven yearsago many people in the executive search business expected that 65%or 70% of credit union CEOs were about to retire.

That never materialized for what Fouks said are a couplereasons. First, the economy slumped so severely that CEOs didn’ttake retirement “because their 401(k)s turned into 201(k)s.”Boards, faced with hefty NCUA assessments following corporateproblems, wanted their experienced CEOs to stay.

Now those CEOs are ready to go. Fouks expects to see CEOretirements follow an upward curve. He noted his firm works withthe Minnesota Credit Union Network, and he has identified about 20CEOs in the state who will retire within the next two or threeyears.

“A difference is that in the past when a CEO moved on he or shemoved to a new place, was let go or retired and offered a fewmonths notice,” Fouks said. “Now, they are giving their boards twoand three years advance notice that they will be leaving. That’sunheard of in the many years I’ve been in the industry.”

“One of the problems the industry has right now is that CEOs aregiving such advance notice and becoming lame ducks. That situationhas been occurring for the past four or five years where CEOs wereof retirement age and didn’t leave for the reasons Imentioned.”

Fouks doesn’t expect these pressures to necessarily boostsalaries significant. He said there are talented people who havebeen waiting in the wings longer than they might have before CEOsstarted putting off retirement. As CEO positions are finallyfilled, there will be a ripple effect. In his opinion, medium andsmall credit unions need to be very careful about promoting fromwithin unless the talent is there. Larger credit unions aresupposedly grooming CEO successors, but they need to be careful thenew CEO can lead them into the future.

He believes credit union boards are going to be under greaterscrutiny.

“Credit unions must either grow or die,” he stated. “As in anyindustry, if you don’t have growth, you’re going backward. It’sgoing to be increasingly important for boards to select top talent.That will make the difference in how they serve their members andhow successful their credit unions are.”

His advises credit unions to seek help in finding a new CEO–andthat doesn’t necessarily mean retaining a search firm. The creditunion must identify exactly what they want in the person who isgoing to move into the CEO’s office. That calls for a close look atthe credit union’s specific needs.