By John Pesh
Earlier this year the Green Bay Packers made headlines when they signed Aaron Rogers to a record-setting contract. So what do credit union CEOs have in common with elite NFL quarterbacks? No, this is not the set up for a joke and there is no punch line. There is, however, a lesson to be learned in how to retain an organization’s top performers by leveraging smart compensation and benefits practices.
As the credit union industry becomes larger and more successful, its talent is attracting attention from other teams. Banks and insurance companies, among others in the financial services industry, are recognizing a ripe free agent market—credit union executives. A recent survey by consulting firm Meyer-Chatfield revealed 44% of respondent banks said they had lost a key executive in the last few years. Where do you think they will be recruiting to fill these positions? Just as struggling NFL teams look to lure players from successful teams to boost their rosters, it’s no surprise banks are finding credit union executives are attractive candidates.
A key reason credit union executives may be vulnerable to changing teams has its roots in the industry's traditional compensation packages. According to some compensation surveys, the total cash compensation of credit union CEOs is low compared to their counterparts at banks; and this discrepancy does not factor in future compensation, such as company stock and stock options.
There is no question credit union executives are loyal to their organizations and the movement, but what is the tipping point that will send them looking at the employment marketplace for a better deal and financial security for their families?
The solution for credit unions is to adopt an approach to compensation that balances both the needs of the individual and the needs of the organization. For most credit union positions, a standard salary and benefits plan is adequate to keep your bench fully staffed. But at the executive level, credit unions have the opportunity to be more aggressive in securing a future with chosen team leaders.
Here's a quick self-evaluation for credit unions that suspect they may have vulnerabilities due to substandard market rates for executives. Do you:
- Know how your overall executive compensation compares to not only credit unions in your marketplace, but to banks, insurance companies and other competitors for the same talent?
- Have performance metrics that support appropriate rewards for excellence?
- Have insight into your executives as individuals to know what forms of rewards would motivate retention and top performance?
Let’s take a lesson from the Packers, who clearly understand what it takes to thrive in a highly competitive arena. Being creative with executive options creates a win-win that benefits the organization by preserving the investment it has made and keeping star players right where they belong.
John Pesh is the Director of Executive Benefits Advanced Sales Support at CUNA Mutual Group.
Executive Benefits and Retirement Plan Services from CUNA Mutual Group provides first-class options when your board seeks new executive benefits and retirement planning services. Designed with maximum flexibility, their offerings allow organizations to remain competitive and compliant while watching the bottom line. Learn more and fill out an online interest form today.
