UW Credit Union Raises Minimum Pay to $17

Wisconsin’s third-largest credit union announced Wednesday that it has raised its minimum wage to $17 an hour, up $1, as credit unions across the country make similar moves in a tight labor market.

The University of Wisconsin Credit Union (UW Credit Union) of Madison ($4.7 billion in assets, 307,053 members) set a new minimum wage that is up 35% since 2015, when starting pay was about $13.30.

The increase will directly benefit nearly 160 UW Credit Union employees – close to 20% of its workforce – and will be reflected in their Nov. 19 paycheck. The majority of impacted employees work as tellers and call center representatives across its 29 Wisconsin branch locations, with the majority located in the Madison and Milwaukee areas.

Part of Callahan & Associates’ quarterly Trendwatch webinar Tuesday was devoted to the issue. Alix Patterson, the credit union company’s chief experience officer, presented data she said showed credit unions have been struggling to increase their workforces over the past year.

“The ability to hire and retain employees is the No. 1 challenge credit unions are facing today,” Patterson said. “Every credit union we’re talking with says they have more openings now than they did a year ago or two years ago.”

Randolph-Brooks Federal Credit Union of San Antonio ($14.6 billion, 1 million members) announced Sept. 13 that it would raise its minimum pay from $15 to $18 per hour that month. Security Service Federal Credit Union of San Antonio ($10.3 billion in assets, 801,685 members) announced two weeks later that it was raising its minimum to $20.

The U.S. Bureau of Labor Statistics found pay for tellers last year was $15.85 per hour, or $32,960 per year.

A Callahan survey of more than 100 credit unions found the minimum wage was $14.91 among participants, and 2.5 times greater than the average minimum wage where they operated.

UW Credit Union’s $17 per hour is more than double Wisconsin’s minimum wage of $7.25, which has not risen since 2009. A news release from the credit union said “its longstanding practice of paying above-market wages has contributed to industry-low employee turnover and top workplace ratings.”

Turnover last year was 11%. The credit union cited data from a Compdata survey showing the banking and finance industry had an 18.6% turnover rate, which is one of the highest among all industries.

President/CEO Paul Kundert said UW Credit Union reviews its minimum wage, which it calls its “foundation wage,” each year to “to ensure our employees continue to earn a sustainable income.”

“It’s not just the right thing to do, it’s essential to attracting and retaining the talent we need to grow as an organization and to effectively serve our members,” Kundert said. “Outstanding member service is the result of engaged, talented employees who know they are respected and valued.”

NCUA data showed UW Credit Union has hired at a faster rate than the largest credit unions, but had some room to raise pay.

• It employed 768 full-time and 77 part-time employees as of Sept. 30. That’s the equivalent of 805 full-time employees, up 16.5% from a year earlier, with all the growth coming from full-time employment. By comparison, the 10 largest credit unions by assets increased full-time employment 4.8% to 43,501 employees, while cutting part-time workers 1.7% to 1,405.
• It earned $49.2 million in the nine months ending Sept. 30, or an annualized 1.47% of average assets, down from 1.81% in the first nine months of 2020. ROA for the Top 10 was 1.55%, up from 0.53% a year earlier.
• Employee compensation and benefits for the nine months was $55.2 million, up 12.3%, compared with average asset growth of 18.2%. Among the Top 10, pay and benefits rose 9.8% — well under average asset growth of 16.7%.
• Employee costs as a percent of total non-interest expenses were 49.9% for the nine months, down from 50.6% a year earlier. Top 10 employee costs were 52.2% of operating income, up from 51.7% a year earlier.

In addition to a competitive base wage, UW Credit Union recently enhanced its pay premiums for bilingual employees in member-focused roles to better serve its diverse membership. Eligible hourly Spanish-speaking employees now earn an extra $1.25 per hour. Eligible salaried Spanish-speaking employees receive an additional $100 per pay period. This amounts to approximately $2,400 to $2,600 in additional compensation per year for full-time employees.

Patterson of Callahan said credit unions should rely on more than money to find and keep talent. One of their best assets is the ability to offer workers the opportunity to make a difference in the lives of others.

“We have to learn to tell the story differently, because we need these employees to be the ones on the front lines selling the credit union brand,” she said.