Cooke/Andres, Inc. is a broad-based consulting firm
serving only the credit union community. Among other consulting
specialties, Rhonda is known throughout the industry as being an
expert in Human Resource needs for credit unions.
The past several years have been challenging in getting and keeping
people. Compensation remains a cornerstone in effective recruitment
and retention of employees. Here is information to keep your compensation
competitive that can also be used for 2001 budget development:
your credit union jobs to the market. The labor market requires
that this level of analysis be conducted no less than every two
years. Use several data sources and ensure as many reported incumbents
position as possible.
- Check the
unemployment rate for your area on a periodic basis. This is a
good indication of how "tight" the labor market will
be for a given period. During the last ten years, national unemployment
"peaked" at 7.4% in December 1992, but has consistently
fallen each year to reach the current low of 3.9%.
- Adjust an
existing salary range structure by 3% to support the Consumer
Price Index (CPI). The Bureau of Labor Statistics reports that
CPI has increased by 2.7% for the period January-August 2000 (3.4%
for the 12-month period, August 1999 to August 2000). It is anticipated
that CPI will increase to approximately 3% for the 12-month period,
for a minimum "average" salary increase of 4.5%. The
Bureau of Labor Statistics reports a 4.2% change in wages and
salaries for January-August 2000. It is anticipated that this
figure will remain unchanged or will increase slightly for the
remainder of the year. Further, a recent study conducted by the
American Compensation Association indicates that organizations
will continue salary growth in 2001 of at least 4%.
Budget a larger "average" salary increase, if possible.
We recommend that credit unions budget for an average salary
increase between 5% to 8% (provided they can afford the percentage
they select). Many credit unions do not compensate their employees
at or near the salary range midpoint (which should represent
the competitive market rate). This can result in issues, such
as: (1) creating internal inequities as new hires are brought
in at the same or higher rates than are currently paid to existing,
experienced staff, and (2) increasing turnover of experienced
staff who look to the outside for competitive market pay, often
for similar types of jobs.