Credit unions that are having trouble keeping a full roster are hardly alone in their employment struggles.
Employees quit for a host of reasons, but more often than not, it’s because they feel stuck — personally, culturally, or financially. When this happens, it’s up to the employer to address those concerns as effectively as possible.
According to the annual Employee Job Satisfaction and Engagement report from the Society For Human Resource Management (SHRM), the top-ranking factor for job satisfaction in 2013 was overall compensation/pay, something 60% of survey respondents listed as “very important.” Back in 2010, this was only the fifth most important factor.
So what’s behind this shift in employee priorities? According to a June 2014 Forbes article, pervasive reduction or elimination of annual raises in the post recession has limited organic wage progression.
In today’s working environment, employees might view jumping ship for a new company as one of the only ways to improve their financial standing. In fact, Forbes reports employees who change jobs every two years earn approximately 50% more over their lifetime thanks to frequent repositioning within the job market.
Despite the fact employers still might steer clear of job candidates whose employment histories indicate they job hop, what used to be an option of last resort has now become a career-building tool for those whose employers cannot or will not increase compensation.
Pay Attention To The Real Cost
Turnover siphons off real time and dollars from an organization. It’s a burden few institutions — let alone not-for-profit credit unions — can shoulder.
According to the Center For American Progress, the average cost for replacing an employee who earns $30,000 or less annually is equal to approximately 16% of their salary. That increases to more than 20% for jobs paying up to $75,000. For executives, the percentage easily reaches into the triple digits.
In light of these costs, funding resources to increase engagement and minimize turnover seems to be an affordable option by comparison. Perhaps that’s one reason the average salary and benefits per credit union employee have increased by more that $18,000 over the past 10 years, according to Callahan & Associates, in contrast to the flatter growth seen among many other employers.
Not surprisingly, increases have been most significant in the $1 billion and up category, where growing complexities in the business model and regulatory environment might necessitate a larger investment in key talent and new roles.
Average Salary And Benefits Per Employee
Data as of Sept. 30, 2014
© Callahan & Associates | www.creditunions.com
As business models become more complex, credit unions are spending more to acquire top talent.
Source: Callahan & Associates
Address All Priorities
An effective compensation strategy is critically important for credit unions; however, it is far from the only factor that plays a role in employee retention.
According to the SHRM survey, other top factors for job satisfaction, as ranked by the number of employees who listed those items as “Very Important,” include:
Job security (59%)
Relationship with immediate supervisor (54%)
Overall benefits (53%)
Financial stability of the organization (53%)
The work itself (51%)
Employee/senior management communication (50%)
Recognition of achievements by management (50%)
Autonomy and independence (47%)
Corporate culture (45%)
Workplace safety (40%)
These are the areas that credit unions today must pay close attention to in order to address evolving employee priorities at both an individual and institutional level.