CUs Loosen the Salary Purse Strings

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

August 21, 2012

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.

Click here for more information.