Human Resources

Salary Freeze Continues to Thaw

CUs are loosening their purse strings as the economy improves, CUNA’s salary survey reports.

October 17, 2013
KEYWORDS employees , Pay , salaries
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When it looked like we were headed into a deep, dark recession about five years ago, a lot of credit unions reacted by freezing salaries.
 
In 2008, about 23% of credit unions did so. And in 2010, when the economy sank to new depths, 45% of credit unions imposed some type of salary freeze.
 
It’s good to see those frozen salaries starting to thaw. Only 29% of credit unions are freezing some or all salaries this year, according to the 2013-2014 CUNA Staff Salary Report (see “Hire expectations”).
 
While that’s a move in the right direction, it’s still well above prerecession levels. If you go back to 2006, only 7% of credit unions planned salary freezes.
 
Another sign the economy is on the mend is that credit unions appear to be getting ready for CEO retirements now that older CEOs have seen their retirement funds bounce back. Two-thirds of credit unions have formal succession plans, while another 14% plan to implement them by the end of this year.
 
While the average age of a credit union CEO is a spry 54, they’re not all spring chickens. Twenty percent of CEOs are between the ages of 60 and 64 and another 10% are age 65 or older. The average age of a credit union CEO planning to retire is 63.
 
When the CEO departs, 48% of credit unions will offer the job to internal candidates first while 42% will post the job internally and externally at the same time. Only 6% prefer solely external candidates.
 
Among those preferring internal candidates, about two-thirds say the executive vice president or chief financial officer would be best-suited to become CEO. Almost 55% say the chief operations officer would be the lead candidate, and 18% would pick the chief information officer.
 
About 30% of credit union CEOs have employment contracts. The likelihood of having an employment contract increases with asset size: 70% of CEOs at credit unions with more than $1 billion in assets have an employment contract.
 
Most of these contracts (60%) were initiated by the board of directors, 32% were initiated jointly by the board and CEO, and only 7% were initiated solely by the CEO.
 
Credit unions tend to be benevolent employers that pay at or above local market rates. With thin earnings projected for the next few years, the challenge will be to remain competitive and offer the types of salaries and benefits credit unions are known for.

 

 

 

 

 

Steve Rodgers is Credit Union Magazine's editor-in-chief.

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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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