6 Ways To Build A Better Benefits Package

HR departments are combining wages, bonuses, and retirement with telecommuting, quiet rooms, and family leave to build attractive benefits packages.

By the end of January 2018 approximately one month after the signing of the Tax Cuts and Jobs Act, which cut the corporate tax rate from 35% to 21% more than 270 companies had announced wage and salary increases, bonuses, or 401(k) match increases, according to conservative group Americans for Tax Reform.

Almost as notable as the swiftness of the response is the list of major U.S. employers including Starbucks, General Electric, McDonald’s, IBM, AT&T, Nationwide, Bank of America, Wells Fargo, and Visa that are promising bonuses, increased minimum wages, and enhancements to 401(k) programs, family leave, training, and charitable contributions.


Corporate tax cuts might be a catalyst, but another factor driving this newfound largesse is the job market itself. The unemployment rate held steady at 4.1% in January and demand for workers is on the rise.

It’s definitely an employee’s market, and most employers in the (Washington) D.C.-area are facing challenges with finding talent, says Amy Thomas, vice president of people and culture at Arlington Community Credit Union ($294.1M, Arlington, VA.)


Arlington Community Credit Union
Data as of 12.31.17

HQ: Arlington, VA
ASSETS: $294.1M
MEMBERS: 21,289
12-MO LOAN GROWTH: 15.8%
ROA: 0.81%

Arlington Community is just one of many credit unions tweaking benefits packages to attract and retain employees and finding there’s no panacea when it comes to benefits.

Some employees are looking for better health and retirement benefits. Others prioritize on flexible scheduling and work-from-home options. That means credit union HR departments must continually evaluate packages of both hard benefits such as wages, bonuses, retirement, and paid time off and soft benefits like telecommuting, employee health, training, and development.

It depends on your demographic, Thomas says. Millennials are not necessarily looking for that rich 401(k) plan, whereas people who are on the other side of their career care tremendously about 401(k) matching, profit sharing, and safe harbor. The younger demographic cares more about flexibility, time off, volunteerism, and dress codes. We give birthdays off with pay, which means something to them.

Amy Thomas, VP People & Culture, Arlington Community Credit Union

Retooling Retirement

Hard benefits such as pay, retirement, and leave have remained fairly constant over the past decade. But that’s starting to change.

For example, a growing number of organizations are allowing employees to enroll in 401(k) programs at the start of employment rather than requiring them to wait 90 to 180 days giving new employees an immediate stake in the business.

Further, employers are testing different contribution rates rather than sticking with the decades-old standard of 100% employer match for the first 3% of employee contributions and 50% for the next 3%. Visa, for example, had been providing employees with a 200% match for the first 3% of an employee’s base salary but announced in January it will increase the cap to 5%. Nationwide has also announced plans to increase its 50% matching contributions from 6% to 7% of base pay.

One of the nation’s largest credit unions, Digital Credit Union ($8.3B, Marlborough, MA), recently increased its employer contribution from a 100% match for up to 6% of base pay to 7%.


Digital Credit Union
Data as of 12.31.17

HQ: Marlborough, MA
MEMBERS: 711,289
12-MO LOAN GROWTH: -0.9%
ROA: 0.96%

Where else can you go where you put in a dollar and someone else gives you a dollar? asks Jane Fontaine, senior vice president of human resources and training. With automatic enrollment, few people opt out of the plan completely. We educate them to at least contribute up to 7%.

Benefits like this are essential for DCU, with 23 branches in Massachusetts and New Hampshire, to stay competitive across major job markets and support members throughout the country, Fontaine says.

Similarly, Arlington Community offers automatic enrollment of 401(k), which includes a 3% 1-to-1 employer match, 3% safe harbor contribution, and an 8% profit-sharing contribution.

Up to 14% of their salary could be going to their 401(k), Thomas says. We are in the financial services business and we advise our members on how to save. We want our staff to benefit from savings for retirement, too.

Jane Fontaine, SVP Human Resources & Training, Digital Credit Union

Down With College Debt

In addition to helping employees prepare for retirement, employers are also looking for ways to address immediate needs such as paying off student loans.

According to a 2017 survey by financial services consultant Oliver Wyman, the median amount borrowed for an undergraduate degree is$26,500. And in a 2015 survey by Iontution, nearly 80% of respondents with student loan debt said they would liketo work for a company that offers repayment assistance with a matching opportunity; 49% said they would prefer student loan payment contributions over a 401(k) plan.

When you have that kind of debt, it could prevent you from buying a car, moving out of your parents’ house, or deciding whether you’re able to buy or rent your home, says DCU’s Fontaine. It’s about beingable to move on with your life.

Government-sponsored student loan repayment programs have been in place for years in fields such as teaching and medicine, relatively few commercial employers have gone beyond offering tuition reimbursement, which pays back existing employees whoare seeking higher education degrees.

Last year, DCU launched a program offering $125 a month in student loan repayment assistance to full-time employees and $75 a month to part-time employees. To qualify, employees need to be on the job for six months, but they don’t have to bea recent graduate to apply.

In the first year, 190 employees signed up for the program. So far, it’s been a great recruiting tool, Fontaine says, though it’s still too early to get good metrics on employee retention a major anticipated benefit. Other firms,for example, are offering tiered systems, with increasing payment amounts tied to continued employment.

We want to be part of the solution, Fontaine says. It’s been a great benefit to offer, and people are excited about it.

One drawback: Student loan repayment benefits are treated as taxable income. However, Fontaine says she’s optimistic lawmakers will consider giving employee tax breaks as more employers start offering this benefit.

Benefits Bombshells

More than 270 companies have announced wage and salary increases, bonuses, or 401(k) match increases so far in 2018. Here are some of the most notable.

  • Walmart $1,000 one-time cash bonus, raised starting pay to $11.
  • BB&T $1,000 one-time cash bonus, raised starting pay to $15.
  • Fifth Third Bank $1,000 one-time cash bonus, raised starting pay to $15.
  • Wells Fargo Raised minimum wage to $15 per hour.
  • Boeing $200 million investment in employee training and education and workforce of the future initiative.
  • AT&T $1,000 bonus to employees and front-line managers and $1 billion investment leading to new jobs.
  • Visa 200% matching contribution to 401(k) for up to 5% of base pay.
  • Nationwide One-time bonus of $1,000 and increased in 50% matching 401(k) contributions to 7% of base pay.

Family-Friendly Leave Benefits

Another area of focus for employers is family-friendly leave. The United States is the only industrialized country not to mandatepaid parental leave, leaving decisions about pay up to employers.

Of the 20 largest U.S employers, all but one offer some form of paid parental leave, according to a New York Times analysis inJanuary 2018 which came on the heels of paid parental leave announcements by Starbucks, General Electric, McDonald’s, IBM, and AT&T.

According to the newspaper, by focusing on family-friendly benefits, companies are also catching up to the fact that family life has changed faster than workplace or public policies. In families of all income levels, it’s more commonfor both parents to work or women to be the breadwinners, and the lack of family-friendly benefits has led to declining labor force participation as people struggle to combine work and parenthood.

A program at Arlington Community addresses these demands, too. Through the credit union’s Extended Illness Leave benefit, employees accrue two hours a month up to 240 hours to assist with work absences related to the Family Medical Leave Act.The credit union designed the program originally to fill pay gaps before it began providing short-term disability benefits.

Thankfully most people don’t have to go through a major medical situation with family members, but you hear stories of how it has made a difference, says Thomas, the credit union vice president. Also, dads don’t get paternityleave. It’s important take time off to bond with your child, and our dads are able to that. They still have their income without burning through their paid time off. They’re going to need that time off when the child gets sick.

Find & Download The HR Documents You Need

Whether you’re looking for job descriptions, code of conduct policies, or employee handbook examples, you can find it in Callahan’s Policies & Procedures platform. Find what you’re looking for and adapt it to yourinstitutions needs.

Soft Benefits For Hard-Working Employees

Organizations competing for titles such as Best Companies to Work for in America, an annual program administered by the Society for Human Resource Management, must be running on all cylinders.


Empower FCU
Data as of 12.31.17

HQ: Syracuse, NY
MEMBERS: 176,802
ROA: 0.93%

Empower Federal Credit Union ($1.7B, Syracuse, NY), which has been recognized with a Best Companies to work for award for the past five years, ranked 11th among large employers in New York state for its blend of pay, incentives, bonuses, and retirement benefits.

In addition to those benefits, the cooperative also offers employees ways to improve their health, says Erin Fuller, vice president of human resources at Empower. Empower moved its corporate headquarters five years ago, and the new location includesan open environment (not even the CEO has an office), an on-site gym (for stress-reducing workouts), and employee quiet rooms (for those power naps). Added to this are on-site health fairs, wellness checks, healthful cooking demonstrations, anda daily micro-fresh food pantry with sandwiches, fruits, snacks and, yes, ice cream all of which employees can charge on meal cards.

Moving to our new headquarters marked a shift to focusing on staff, culture, and work-life balance, Fuller says. Most of the employees take advantage of lunch, especially in the wintertime.

Erin Fuller, VP Human Resources, Empower FCU

Empower’s telemedicine program connects employees with doctors who can diagnose and prescribe medicine over the telephone, Skype, or FaceTime.

You don’t have to go out in a blizzard to visit an urgent care facility for a sinus infection or ear infection, the VP says.

At DCU, on-site benefits include an online lending library and reading room, and the employee book club is available for recommendations for a range of fiction and non-fiction, including books on self-improvement and leadership.

Other services DCU offers include chair massages and reflexology, which employees can pay for every other week. Employees can also drop off and pick up their dry cleaning at work, or buy stamps or gift cards at the front desk and avoid leavingthe office to buy last-minute gifts during the holidays.

We’re trying to help give our employees the gift of time, notes Fontaine.

So, what’s in the works? This year, the Massachusetts cooperative plans to roll out services from Zippity, which will provide employees with on-site oil changes and car maintenance.

The New Case For Home Work

Remote working, flexible schedules, and work-from-home options are other ways to attract and retain talent. This is particularly true in major metropolitan areas where commuting times are a significant factor in job decisions. Arlington Community,for example, is located near a newly opened toll road along Interstate 66 in the Washington, DC, area. Commuters were outraged in December to learn that tolls for single drivers on I-66 from I-495 North to exit 73 in Rosslyn could reach $34.50.

But a toll increase isn’t the only roadblock for commuters.

The toll varies based on the time of day and the demand, so you don’t know how much it’s going to cost, Thomas says, noting that more employees are factoring in commute times when it comes to accepting a new job or stayingin an existing one.

Consequently, Arlington Community, which was just honored a 2018 Best Places to Work award, is developing a remote work program for employees.

The world is flexible, and we’re learning we can be just as efficient conducting a meeting using FaceTime, Thomas says. Of course, there are jobs that require face-to-face meetings. We are evaluating how far we want to go,aligning that to our strategy, and making sure we have the right structure and technology to support it. I don’t see us turning back from it. We will be doing more of it.

Backing Employee Give Back

Many credit unions are making it easier for their employees to give back. In fact, codified programs provide paid time off and funding for worthy causes.

A committee at Empower Credit Union, for example, manages the process through its Duguid, pronounced do good, Fund named after employee Margaret Duguid.

The fund helps members or employees in need, Fuller says. If a teller learns a member doesn’t have money for a school backpack or something, we have a fund that can help members or employees with those smaller things.

Empower also offers employees eight hours of paid time off for volunteerism.

We allowed a group of employees to go to a local gas station and pump gas to raise money for United Way, Fuller says. Some employees volunteer their time to do yard work and plant flowers at a homeless shelter. Our staff is service-orientedanyway, so they enjoy it. People helping people is part of the credit union mantra.


October 15, 2019

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