Do you want to be the HR Leader or the “Payroll Lady”? That is the question I ask HR professionals during our executive coaching sessions. When I facilitate Strategic Planning sessions for community banks or credit unions, I wonder why many exclude the HR Director. I found out why.

When I inquire about it, the responses are typically similar. “Because one of the senior executives oversees HR” or “We don’t really have an HR leader, she processes payroll and benefits and handles the hiring and onboarding of new employees.” So, I dig in deeper and find out what exactly the “HR person” does for the organization. I find the majority of HR Directors are overwhelmed with the administrative tasks and don’t have time for anything else.

Employees are your most valuable asset.

Many (if not all) community banks and credit unions claim their employees are their biggest and most important asset. Yet their HR Director does not have a seat at the leadership table. I understand that not everybody can be part of the Senior Leadership Team (SLT). However, if institutions consider their employees to be their top priority, then the head of HR should be part of the SLT. In fact, some organizations recognize the need for the HR leader to report directly to the President or CEO. For some organizations, one of the SLT members also carries the title of HR Director. Then, in that case there is true representation of HR at the senior leadership level.

One of many hats I wore as the CFO/COO of the community bank I co-founded, was the HR Director. And before I hired an HR Assistant, I only had time to perform the administrative tasks. They included processing payroll, handling the benefits enrollment, and the hiring/firing, and onboarding functions. There was no time to do the “soft side” of HR which is my favorite—to develop our employees. We had no resources to implement a full Talent Management Program. However, I represented HR at the executive table and eventually, as the bank grew, the HR department grew as well.

Below are three key reasons HR professionals are not invited to the leadership table:

They don’t want to let go of the administrative tasks.

A great majority of HR Directors are women. It could be because they possess the nurturing talent that is needed in HR plus they have great administrative skills. They enjoy helping the employees and feel needed by them in various respects. Some may enjoy the control they have over the confidential knowledge and information they guard so closely. And although many of them are overwhelmed, when offered help by outsourcing HR they get defensive and say they can handle it.

They are not perceived as leaders.

Even though employees respect and value HR Directors, some may not be perceived as “leaderships material” by top leadership. Why? Because they continually focus on the day-to-day administrative tasks. They don’t have time to, or choose not to, focus on the long-term strategy of the institution. They need to demonstrate leadership ability and strategic thinking skills by asking the senior leaders questions such as:

1. What are the long-term strategic objectives of the organization?
2. What are your growth plans in your department for the next year?
3. Are you in need of additional FTEs (Full-Time Equivalents)?
4. Will you need my help in developing new job descriptions for new positions we don’t currently have?
5. What challenges are you experiencing in your departments?
6. How can I (or “we” if you have an HR department of more than one) help you develop your employees?

So, whether by choice or by circumstances which I understand, HR Directors get pigeon-holed in a job and don’t get promoted to senior leadership.

Do you want to be the HR Leader or the “Payroll Lady”?

I then go back to the original question to ask the HR Director. Do you want to be the HR Leader or the “Payroll Lady”? If you want to be an executive leader of the institution, then you will need to change your approach. If you don’t want to stop doing the everyday administrative activities, then that’s okay too. But don’t expect to be invited to the senior leadership team because they see you as the “payroll lady.” And let me clarify that there is nothing wrong with wanting to do the administrative side of HR. However, when you don’t let go of the administrative functions yet resent that you’re not included in leadership, then it creates an internal conflict you must address.

Once you make the choice to continue your HR career in the administrative side, then enjoy it fully and thrive doing so. You will need to be okay with the company hiring an HR Director who will oversee you as the leader of the department.

If you choose the leadership path, then here are some tips that will help you get there:

• Communicate your desire to “lead HR” to your immediate manager and, if possible, to the President of the institution. You must be prepared to answer the questions: Why do you want to lead HR and what skills and leadership experience do you bring to the table?
• Communicate that as the HR leader (the title does not matter as much as your actual role) you want to be part of the senior leadership team.
• Create a plan to delegate the administrative functions by either outsourcing to an HR firm or by hiring an HR Assistant and other positions to grow the HR department. The size of your department will depend on how many employees you support.
• Get an executive coach to help you transition from a support role to a leadership role. Sometimes, it may be hard to do so in an organization where you’ve been in the support role for a long time. You may have to make a move to a new company where everyone will see you as the HR leader from the start.
• Develop your management skills and your leadership talent. Remember, managing is different than leading. Leaders share the vision and provide direction. Managers execute the vision and mission of the organization. The challenge is that you must be good at both.

Concluding Thoughts.

If you are reading this blog and you are part of the senior leadership team, I encourage you to invite your HR leader to the team. Give them a seat at the table. After all, your employees are your biggest asset. If you are reading this blog and you are the “HR person,” then I encourage you to first figure out which path you want to take in HR: the administrative/support path or the leadership path.

Once you’ve made the decision, then go for it. In either path you choose, you will be serving the employees of your company and both paths are honorable and fulfilling. Good luck on your journey!

There are more than five benefits of Positive Pay services to your business customers. But in this blog, we focus on the top reasons community banks and credit unions must offer this important service. Let’s start by defining what is the Positive Pay service.

What is Positive Pay?

Simply put, Positive Pay is like the fire insurance on your home you hope you never have to use. For businesses, it’s their assurance that only the checks they write and only Automated Clearing House (ACH) transactions they initiate will be paid by their institutions. Any checks or ACH transactions not authorized by the company return unpaid. The financial institution then files a “Suspicious Activity Report” (SAR) to alert government officials about the fraudulent transactions.

Technically, the business uploads a file with the list of checks to the financial institution. The institution matches items clearing against the authorized list and alerts the business of any discrepancies. The business then decides which items to pay or return. That is Regular Check Positive Pay. The Reversed Positive Pay, the institution initiates the list of items clearing that day. The business then tells the institution which ones to pay or return.

Below are five benefits of “Positive Pay” services and how they benefit both the businesses and institutions:

Check and ACH fraud is significantly lower.

The Financial Crimes Enforcement Network (FinCEN) issued an alert to financial institutions in February 2023 about the alarming increase of “mail theft-related check fraud.” (FIN-2023-Allert003) Financial institutions must be vigilant in identifying and reporting any activity related to check fraud. And it’s happening the old fashion way—checks stolen from the U.S. Mail!

In talking with our clients, they are also experiencing an increase in fraudulent ACH transactions. The good news is that there is help! Financial institutions can offer the Positive Pay and ACH Positive Pay services for businesses to protect them from both check and ACH fraud.

Positive Pay protects both the businesses as well as the financial institutions.

As one can imagine, implementing this service on business checking accounts can save businesses millions of dollars. In addition, one fraudulent transaction can cost a business a monumental amount of time researching and closing old accounts. Once a business experiences fraud, the institutions require them to close the affected accounts and open new ones. This creates a huge amount of work for both the business and the institution. Implementing Check and ACH Positive Pay services on the main business operating account always pays off.

Increased internal controls for businesses.

A bank client once shared that a business customer used to “pre-sign” checks and leave them with his bookkeeper. During his vacation, the owner called the bookkeeper and asked her to issue a check as a matter of urgency. The bookkeeper happened to also be out of the office. She asked her assistant to “go to her desk and open the drawer where she would find several pre-signed checks.” The bookkeeper’s assistant issued the urgent check as requested. But she also issued a check payable to herself for $3,500.00!

When the check cleared and the customer found out about the fraudulent check, he contacted the bank in a panic. Guess what? The bank was not liable for this fraud and the customer had to absorb the entire loss. The bank offered this business customer the Positive Pay service and he declined it. The business owner pre-signed a legitimate check. Therefore, although the check was not fraudulent, the employee committee check fraud. If this customer had Positive Pay, he would have found out the very next morning and the check would not have been cashed. Small Businesses are notorious for not having internal controls in place and Positive Pay forces them to implement minimal controls.

Increased non-interest fee income for financial institutions.

Financial institutions are starving for additional non-interest income and Treasury Management (TM) services precisely bring that! Positive Pay is one of many TM services that businesses can benefit from. But all these services cost money to implement and to support. Therefore, institutions should charge business customers appropriately. Unfortunately, that is not the case. Most community banks and credit unions give it away for free. They should ask their business customers if they give away some of their products to their customers. I guarantee they would say “no, of course not”!

An opportunity for financial institutions to partner with businesses in the fight against crime.

The goal for business bankers should be to become partners with their business customers. Community banks and credit unions have an incredible opportunity to do so by offering Treasury Management services to their business customers. However, bankers must receive training to understand and value each service that helps businesses succeed. TM services allow businesses to accelerate their receivables, control their disbursements optimizing their cash flow management. In addition, TM services like Positive Pay protects businesses from losing money and time due to check and ACH fraud.

There are more than five benefits of “Positive Pay” services  to business customers. I hope these top five benefits encourage your institution to share the value of Positive Pay with your business clients. They will then consider you a valuable partner in their business.

Looking for ideas to expand your Treasury Management reach to new business customers? Look into the TMClarity Framework, our comprehensive and transformative training and Treasury Management business management system that leads to greater sales success, higher margins, and increased customer retention in a competitive marketplace.