Management

CUs Loosen the Salary Purse Strings

CUNA survey finds signs of modest wage improvements over the past year.

August 21, 2012
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Credit unions are starting to loosen the purse strings when it comes to pay increases, according to CUNA’s 2012-2013 Complete Credit Union Staff Salary Survey.

Similar to national trends, CUNA’s salary survey found signs of modest overall wage improvements among credit unions in the past year. In 2011, 79% of credit unions with $1 million or more in assets gave salary/wage increases to at least some of their full-time employees.

This is a slight improvement over previous years (77% in 2009 and 73% in 2010) but well below the 92% figure reported in 2008. And 79% of credit unions expect to provide salary/wage increases in 2012.

In addition, wage freezes appear to be thawing. In 2011, 38% of credit unions initiated a wage freeze for at least some of their full-time employees. That’s significantly below the 45% of credit unions freezing wages in 2009 and 2010.

An even smaller percentage (32%) of credit unions plan to freeze wages in 2012. And only 10% of credit unions with $200 million or more in assets expect to freeze some of their employees’ wages this year.

Base salaries have increased only modestly for two years, however, after bottoming out at a 1.7% increase in 2009, according to the 2012 Culpepper Salary Increase Budget Update Survey.

Average U.S. base salary increases were 2.4% in 2010 and 2.9% in 2011. During 2012, base salaries are projected to increase about 3%.

For full-time credit union employees, average salary increases were somewhat lower than national figures—2.4% for both management and nonmanagement employees, CUNA reports.

Budgeted base pay increases for 2012 were similar to 2011 figures. Anticipated pay increases for 2013 are lower, at roughly 2.2%.

Other highlights from this year’s salary survey:

Pay levels, in terms of pay increases or even dollars spent on variable pay, won’t be bouncing back to pre-2008 levels for most positions any time soon. Employers are likely to pay a premium for highly sought-after skills that are in short supply in the labor pool.

To attract and retain talent, organizations will have to focus on intangibles, such as career development, flexible schedules, and “best place to work” practices.

Credit unions that encourage and recognize employees’ efforts to serve members tend to be the ones with the highest employee engagement levels and are known locally as desirable places to work.

While they might not be able to increase salaries dramatically in this economy, “credit unions can attract and retain employees by tapping into the philanthropic spirit, which helps credit unions compete for top talent without adding to expenses,” says Beth Soltis, CUNA’s senior research analyst.

Variable pay (incentives and/or bonuses) continues to be a popular way to reward employees without increasing fixed costs. And bonuses (after-the-fact rewards for a job well done) continue to be the most common form of variable pay among credit unions.

Half of credit unions with $1 million or more in assets offer bonuses to their full-time employees, CUNA reports. Credit unions are more likely to offer bonus awards to managers than to nonmanagement staff.

About 52% offer bonuses to management employees, while 42% offer them to nonmanagement employees. These percentages have increased from 47% and 38%, respectively, from last year’s survey.

About 30% of credit unions offer incentive payments (awards tied to preset performance criteria) to full-time employees. This ranges from half of credit unions with $20 million to $50 million in assets versus more than 70% of credit unions with $200 million or more in assets.

Credit unions are equally likely to offer incentive payments to management and nonmanagement employees.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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