Participate in two CUES surveys by March 31 and take full advantage of industry data to support your talent management efforts.
As job surpluses, quit rates and employee turnover rates continue to rise, so too does the need for employers to attract and retain employees. These factors have led to increases in employee expenses in the form of rising salaries, training and fringe benefits. Given the current labor market, finding and retaining skilled employees is one of the most important issues facing employers.
One important way organizations attract and retain talent is through competitive pay—more specifically, identifying the compensation offerings that equate to employee longevity while simultaneously conforming to your credit union’s pay policies.
Three questions need to be answered when trying to identify your competitive pay model:
- What is your compensation strategy?
- Where do you find reliable sources of compensation data?
- How do you apply your compensation strategy to the data?
When I discuss compensation strategy, I am primarily referring to the approach your organization implements when identifying how much to pay an employee. Most organizations fall into one of three categories:
- Market Leader. Organizations willing to pay a premium to ensure they have the best talent
- Market Matcher. Organizations looking to pay competitive rates to stay in unison with the marketplace
- Market Saver. Organizations that tend to pay below industry norms (reasons may include location/lower cost of living, size of organization, new entrant in the industry, higher “other” benefits, greater advancement opportunities, etc.).
An organization’s compensation strategy may be applied across all job positions, or mixed and matched depending on the job category. The chosen strategy will ultimately be decided by several factors, such as budget, mission, return on investment of finding and onboarding new employees, objectives of the job role, and growth potential of the credit union and the employee.
Once a compensation strategy has been identified, organizations need a way to evaluate or benchmark the compensation levels being offered. This is where doing extensive research to find available data, processed by a reputable research company, comes into play.
Many sources of data are available for use. These include government data (Bureau of Labor Statistics), data from HR-related associations (WorldatWork, Society for Human Resource Management), information available online (Salary.com, Glassdoor), and statistical information captured from your industry peers (CUES Executive Compensation Survey and CUES Employee Salary Survey).
All the above should be considered together when establishing your pay structure. Industry-specific data tends to be the most useful, as long as there are sufficient response rates and professional care was taken to generate the statistics. Data from your peers provides an apples-to-apples comparison since the job roles and duties of specific positions are highly comparable from one credit union to the next (at least to a much greater degree than a generic job title coming from a completely different organization type or industry).
Most available data will provide average and median figures. This information is extremely useful for the market matchers that like to stick directly to industry norms. However, for those market matchers that need to modify their compensation offerings and those organizations that are market leaders or market savers, additional data is necessary to make informed decisions.
Staff members charged with setting pay scales find it beneficial to have access to compensation benchmarks at a granular level. To appropriately slot employees within pay ranges, having access to the data at the 10th, 25th, 75th, and 90th percentiles (in addition to averages and medians) can provide HR professionals with actionable information to help define compensation values.
When using these data points, it may seem a bit overwhelming at first. However, there are some general rules to help you in the evaluation process:
- Market Leader: Focus on the compensation data associated with the 75th or 90th percentile.
- Market Matcher: Focus on the average wage data as well as the median values. The compensation levels for this strategy will typically fall between the 25th and 75th percentile with a large concentration around the average and median data points.
- Market Saver. Focus on the wage data accompanying the 10th and 25th percentile.
Even with the above general guidelines, applying the statistics to fit your pay structure can sometimes be more of an art than a science. The data available will not necessarily provide you with a definitive dollar value that matches your compensation strategy, the exact duties of a position, and the background/characteristics of the employee. While these statistics may get you 95% of the way there, slight modifications will need to be made by HR professionals that will establish fair and equitable compensation for both the credit union and the employee. These adjustments will include additions or subtractions for education level, years of experience, upward potential, management responsibilities, and cost-of-living adjustments. However, once you get started, you will begin to find standard processes that you can easily apply to all job positions when defining pay levels.
To help credit unions better provide competitive pay to meet their compensation strategy, CUES offers the CUES Executive Compensation Survey and CUES Employee Salary Survey. These surveys provide detailed results of compensation and benefits packages offered by credit unions. The results are presented as averages and medians as well as the 10th/25th/75th/90th percentiles to allow users to pinpoint the compensation levels that match their credit union’s strategy.
Both surveys are now fielding. Participate by March 31 to take full advantage of these offerings.