America’s lockdowns continued through the second quarter, forcing businesses to close and unemployment to skyrocket. According to the Bureau of Labor Statistics, the national unemployment rate reached 14.7% in April, the highest it has been since1940. As parts of the country re-opened toward the end of the quarter, employment pressures eased, improving the rate to 11.1% as of June 30. Hindered by this workforce displacement, FRED economic data indicates total quarterly compensation nationwidefell below $8.9 trillion as of the second quarter; that’s down from $9.3 trillion in the second quarter of 2019 and $9.5 trillion in the first quarter of 2020.
Key Points
- Total full-time equivalent employees (FTE)* at credit unions nationwide reached 316,215 as of June 30. That’s an increase of 1.8% year-over-year.
- Part-time employees decreased 10.0% year-over-year; full-time employees increased 2.3%.
- Total compensation at U.S. credit unions increased 8.6% annually to $13.4 billion through the first six months of 2020. The average wage per employee increased 6.6% annually to $84,531 as of the second quarter.
- Revenue per dollar spent on compensation, a proxy measure for the return on investment in employees, decreased 5.9% year-over-year to $3.08.
- Net income per FTE fell to $15,009 as of the second quarter. This is down from $23,400 through June 2019 due to a 34.7% year-over- year contraction in total net income.
FULL-TIME AND PART-TIME EMPLOYEES
FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.20
Callahan & Associates | CreditUnions.com
Credit unions added 6,972 full time employees over the past 12 months, a 2.3% annual increase, while part-time employees declined 10.0% over the same period.
SALARY & BENEFIT EXPENSE PER FTE
FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.20
Callahan & Associates | CreditUnions.com
Annual salaries in the second quarter averaged $84,531. That’s up 6.6% year-over-year. The average credit union wage was up more than $5,000 per employee over the past 12 months.
YTD NET INCOME PER FTE
FOR U.S. CREDIT UNIONS | DATA AS OF 06.30.20
Callahan & Associates | CreditUnions.com
Year-to-date net income per employee decreased 35.9% year-over-year as credit unions faced earnings pressures associated with COVID-19.
The Bottom Line
Unemployment soared to its highest level since before World War II as the national economy continued to feel the effects of the COVID-19 pandemic. Credit unions managed to hold onto their staff members and add to their ranks. Despite this, downward pressureson interest income underpinned a decrease in employee productivity measures. As loan demand rebounds following the pandemic, the industry will need to rely on employees to continue to support members.
*FTE=Full-time Equivalent=100%FT + 50%PT
This article appeared originally in Credit Union Strategy & Performance.
