MADISON, Wis. -
That number is consistent with base pay increases in credit unions overall, according to the 2007-2008 Small Credit Union Staff Salary Survey, published by CUNA's Center for Research and Advice.
This year's survey was expanded to be used by credit unions with $35 million or less in assets, up from the previous $20-million asset ceiling.
Small credit unions' base pay increases in 2006 for management staff were 3.58%, compared to 4.05% for credit unions overall, according to the survey. Also, only 14% of small credit unions raised the potential wage increase in 2006, which is lower than the 22% figure reported among credit unions overall.
"Some firms are predicting a sizeable increase in executive search assignments this year, especially among executives in the financial services industry," said Beth Soltis, senior research analyst for CUNA's Center for Research and Advice. "The high cost of replacing employees and the difficulty in finding skilled job candidates make retention strategies critical. Credit unions may want to discern who their key players are and build retention strategies around them."
The results found were similar to those in 2005, Soltis said, whether looking at small credit unions or credit unions overall.
"Actually the number of credit unions providing salary/wage increases doesn't vary much by asset size," Soltis said. "Rather the economy and labor market have much more of an effect. As a result of a weak economy, the percentage providing salary/wage increases in 2004 dipped to 83% for credit unions with $1 million or more in assets and 81% for credit unions with $1 million to $20 million in assets, but these figures stood at 90% and 85%, respectively, in 2003."
With the improved economy the past couple of years, credit unions responded by providing salary/wage increases, as was the case nationally, across industries, Soltis said.
Soltis said she doesn't expect the percentage of credit unions providing salary/wage increases to change much in the near future, based on the fact that the current tight labor market ensuring that organizations competing for talent offer competitive wages and percentage wage increases.
"The challenge for smaller credit unions, of course, is to offer substantial wage increases," Soltis said, noting that as expected, the wage increases provided by smaller credit unions are lower than what their larger counterparts provide. She said that salary increases, as a percentage, have been on the decline for several years-for credit unions and across industries. And while economists predict salary/wage increases to remain below 4% nationwide due to an employment rate about 5%, Soltis said that all organizations, including CUs, are having difficulty allocating funds toward base pay/base-pay increases when the costs of providing benefits continue to rise at a rapid pace.
"Credit unions continue offering benefits, including healthcare insurance coverage, to their employees, and I don't doubt that wage increases are suffering, as is the case nationwide, Soltis said.
Soltis added that the financial industry, as a whole, historically has had higher base bay increases than the national average for all industries. "And as such, credit unions tend to have higher base pay increase than what is found nationally," she said.
But still, banks usually have much higher pay increases than credit unions do.
"Looking at small credit unions, their base pay increases do tend to fall below national trends, but this is certainly a function of asset size," she said.
As for the trend of non-management base bay increases being lower than management base pay increases, this is the third year where that has been the case, Soltis said.
"I cannot say with certainty what's causing it," she said. "Since we ask for average percentage salary increases, and these are not tied to specific positions, I can't say whether certain positions are driving it. I can speculate that there is less room for discretion among non-management positions-the market dictates what they need to keep up with market rates if the credit union doesn't want high turnover. Also, the percentage increase for a teller involves a smaller price tag compared with the same percentage salary increase for a manager, making it more affordable to provide a higher percentage salary increase for non-managers."
Minimum wage issues may play as role, too, but that trend is somewhat new and has not yet been studied at-length, Soltis said.
