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Brain Drain
The number of older Americans in the workforce isn’t declining — it’s growing, according to the Bureau of Labor Statistics, with workers aged 70 or older up 15% from the first quarter 2022 to the fourth quarter 2024. In a 2023 survey, T. Rowe Price explored this “unretirement” phenomenon, noting a variety of reasons behind the trend: money, a need for social engagement, mental stimulation and fulfillment.
That could be a good thing for banks experiencing a brain drain in technical know-how as seasoned credit, operations, risk and compliance professionals retire.
“We're seeing it within banks, and we're seeing it within the technology providers who are there to connect with banks,” says Cornerstone Advisors CEO Steve Williams. “It's like that retiring credit officer who has the wisdom of credit, and I might have a 35-year-old who's never been through a recession in the credit function today.”
Outsourcing could be one solution to the problem, he says. Another would be to tap retirees. “I would have a Rolodex, an email or a text chat” of five or so experienced, retired credit officers who could be tapped if the bank needs help, he says. “‘Are you getting bored? How many times can you golf at Palm Beach?’”
Semi-retired hired guns can help bridge the expertise gap, but it’s not a long-term solution. Brian Love, head of banking and fintech at the executive search firm Travillian, suggests that institutions task professionals reentering the workforce with identifying and developing internal successors.
“That’s the only way you can prop up a bank for the long term, if you hire them with that process in mind,” Love says. He’d also like to see more banks train prospective young leaders by rotating them through different areas of the bank. “That’s something that is truly exciting for banks to do, to develop that young talent in-house.”
The talent pool for senior bank executives is only getting tighter. Love says he’s seeing a high level of searches due to retirements, skills gaps and institutions where growth has outpaced their executives’ ability. He advises banks to hire for cultural fit, and be flexible on background or geography. Maybe your next CFO doesn’t need to be a CPA, because instead they have other certifications or deep experience as a treasurer. “You’re going to have to budge on something,” he says.
• Emily McCormick, vice president of editorial & research for Bank Director
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