Steady on wages
Salary survey results suggest other credit unions are responding similarly to the economy, as the number of credit unions increasing wages remains low. Among credit unions with $1 million or more in assets, the percentage providing wage increases to at least one employee decreased from 77% in 2009 to 73% in 2010. Also, the practice of freezing at least some wages held steady with 45% of credit unions in 2010 compared with 43% in 2009.
Soltis doesn’t expect these figures to change much in 2011, as 76% of credit unions anticipate increasing wages in 2011 and 40% expect to freeze some wages. The recent trends also suggest a new norm is emerging for the industry. There are no signs yet of returning to the “old norm” when about 95% of credit unions increased some wages in any given year and only about 5% froze wages, says Soltis.
“These figures had been stable for almost two decades until dipping in 2008, when 23% of credit unions initiated wage freezes and 92% increased some wages,” she adds. “The 2008 figures on wage freezes were considered alarming. Now, I’d consider it a stunningly positive trend to return to that level.”
The credit union industry is characteristically conservative, she concedes. That explains why many credit unions appear to be waiting for better economic news before increasing wages or expanding staff. It also explains why credit unions were less likely to get involved in the credit crisis that destabilized the banking industry.
There are risks, however, in playing it too safe. Some credit unions have recovered enough to resume more robust hiring and wage increases, says Soltis. But they’re waiting to see how health care and interchange income legislation play out before they take any significant actions. Holding the reins on salaries might protect the bottom line in the short term, but it could be counter-productive in the long term, Soltis cautions.
The problem is, a lot of credit union employees are doing the work of more than one employee as they pick up the slack for employees who left or were let go. If they don’t get some kind of recognition for that, credit unions will be heading for a staff-morale problem, she explains. “Simply acknowledging their hard work and sincerely thanking them can ease employees’ frustration and stress levels.”
Next: Turnover trends down