The U.S. unemployment rate was 3.9% in December 2018. That was down from 4.4% one year earlier and is the lowest year-end rate since 1969. As unemployment continues to dip, there is a growing competition for talent that has spread across all industries. With the rising demand for talent, average compensation continues to rise including at credit unions and particularly in certain geographical region.
Total compensation at U.S. credit unions has steadily increased for the past two decades. In 2018, credit union employees earned a combined $22.9 billion in salaries and benefits. That’s up 7.5% year-over-year. The total number of full-time equivalent (FTE) employees has risen, too. Calculated by adding all full-time employees plus half the part-time employees, FTEs increased 4.3% to 305,311 as of Dec. 31. The growth dynamic between total compensation and FTEs resulted in a $2,319 increase in the average compensation per employee, which rose from $72,829 at year-end 2017 to $75,148 as of Dec. 31, 2018.
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Salary and benefits are typically a credit union’s largest expenditure. At year-end 2018, compensation accounted for 41.7% of total expenses across the industry. Of total non-interest expenses, compensation accounted for 50.9%.
Many considerations go into determining an appropriate salary and benefits package, one of the most important being the cost of living. In the credit union industry, the average compensation in the DC metropolitan area which includes Washington, DC, as well as parts of Maryland and Virginia was $85,833 in 2018. At Washington, DC credit unions, the average compensation was $92,800. Credit unions in other states with large metropolitan areas and subsequent higher costs of living also reported compensation that was higher than the national average. For example, credit unions in California and Washington state reported an average employee compensation of $90,600 and $85,300, respectively. Credit unions in New York state reported an average employee compensation of $81,000 in the fourth quarter; however, credit unions in New York City reported an average employee compensation of $112,600.
SALARY AND BENEFITS PER FTE
FOR U.S. CREDIT UNIONS | DATA AS OF 12.31.18
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To remain competitive in a tight labor market, credit unions in states with large metropolitan areas, and higher costs of living, pay more for talent. Click to view larger.
Source: Callahan & Associates.
With unemployment at record lows, and high competition for talent, compensation packets are increasing. To attract the right talent, credit unions are likewise adjusting their pay scales. This is happening across the United States but is particularly evident in metropolises.