• Budgeted salary increases for management and nonmanagement staff are about 2% through 2011.
CUs are finding creative ways to motivate staff despite stagnant pay and bonuses.
Last year, the recession caused credit unions to place their salary and benefits packages in the deep freeze. This year, with an economy that seems to take two steps forward and three steps back, those compensation packages remain well-frozen.
“Most credit unions have already used attrition to reduce their staff levels, and they’re being very conservative with hiring, raises, and bonuses,” says Beth Soltis, Credit Union National Association (CUNA) senior research analyst. “This year—in terms of compensation—looks like a repeat of last year.”
CUNA’s 2010-2011 Complete Credit Union Staff Salary Survey Report shows that credit unions are still taking a cautious approach to compensation.
Salary freezes common
In a typical year, roughly 90% to 95% of credit unions give raises. In 2009, however, only 77% did, according to CUNA’s survey. “A similar percentage of credit unions plan salary increases in 2010,” says Soltis. “Plus, in the past two years, we’ve seen the number of credit unions that are freezing at least some salaries jump to 43%—nearly double the 23% that froze salaries in 2008.”
These numbers are even more dramatic when compared with the recent past: Only 15% of credit unions froze wages in 2007 and 7% did so in 2006.
Credit unions that were able to increase wages generally gave small raises. In 2009, the average salary increase for both management and nonmanagement employees was 2.6%.
Budgeted salary increases for 2010 and 2011 are even lower for both groups at about 2.2%. Wage increases in 2008 and 2007 were 3.5% and 3.9%, respectively, according to previous CUNA salary surveys.
Credit unions plan to offer fewer bonuses—rewards not tied to preset personal performance criteria: 49% of credit unions in 2010 versus 57% in 2009 and 62% in 2008.
Many credit unions keep it open-ended. University Credit Union in Boston tells staff they’re essential to the credit union’s success. “If we have a good year, they’ll share in it,” says William Sinibaldi, president/CEO of the $59 million asset credit union.
It’s a good idea to consider extraordinary circumstances when determining bonuses, says Linda Reynolds, president/CEO at $81 million asset Pinellas Federal Credit Union in Largo, Fla. “Our team worked extraordinarily hard during a recent switch to an in-house Visa program. Our board recognized that and was able to provide a bonus when the numbers alone might not have supported it.”