Benefit Best Practices [Credit Union Management]

Employees value benefits that provide a combination of security, fun and flexibility

While many businesses are slashing benefits and cutting expenses wherever they can, many credit unions are finding ways to offer competitive benefit packages, some even winning awards as best employers.

$1.3 billion/80, 0 00 -member First Calgary Financial (www.firstcalgary.com) with 500 full-time equivalents in Calgary, Alberta, was recently recognized as one of Canada's Top Employers for Young People, based on the benefits and programs offered. First published in 2001, the Canada's Top Employers for Young People competition is organized by the editors of Canadas Top 100 Employers.

Several factors contributed to First Calgary Financial's recognition, says Jackie Barber, SVP/human resources and governance: "We focus on the employee experience as much as our member experience, we celebrate the unique professional and personal needs of each employee and we have a company-wide career development review program that supports young professionals to grow their career at the pace they want." In addition, she says: "We round out the employee experience by supporting employees' passion for volunteering in the community."

First Calgary Financial's Volunteer Involvement Program offers grants for employees' personal volunteer commitments. An employee-led social group - L.I.V.E. (Leadership, Involvement, Volunteerism, Employees) - offers fun activities that have involved curling, a golf outing, dragon boating and a Whitewater rafting adventure.

"There has been a lot of focused effort over the past 18 months on creating a really solid employee experience from the time you walk through the door and the orientation process, all the way through when you've been with us for 20-25 years." The award, she says, "is primarily an acknowledgement of some of those things."

While the award is focused on young people, she says the credit union is not deliberately focusing on young people in its efforts.

At $985 million/71,500-member Advancial Federal Credit Union (www.advancial.org), with 150 FTEs in Dallas, benefits are great but it's the culture that drives its recognition as a "Best Company to Work for in Texas," says Suzan Dick, chief human resources officer. "We are very intentional about protecting our culture and developing it and making sure that we're taking care of our employees," says Dick. "We do that in a lot of different ways; one is compensation and benefits." Advancial FCU ranked second among medium-sized companies in the award program (www.bestcompaniestx.com).

$1.9 billion/160,000-member Veridian Credit Union (www.veridiancu.org) with 512 FTEs in Waterloo, Iowa, was recently named to The Principal® 10 Best Companies for Employee Financial Security (www.principal.com). Veridian CU offers full-time employees 100 percent employer-paid medical insurance premiums for employees and dependents. Part-time employees and retirees get 100 percent CU-paid medical for the employee only (not dependents).

All employees also enjoy a health savings account, a 401(k) plan with a 100 percent match up to five percent of pay, a profitsharing plan with an average contribution of 10 percent and 100 percent employer-paid premiums for long-term disability and life insurance. But, like Dick, Renee Christoffer, SVP/administration at Veridian CU, points to a "great culture" as a key driver of its success.

When it comes to great benefits - benefits that help them recruit, retain and engage great employees - these credit unions and others have found that it takes a combination of security- oriented benefits, fun and flexibility, and a lot of good two-way communication to make a measurable impact.

It's not easy. Both the economic environment and employee demographics are changing rapidly. And, of course, health care reform looms.

A Changing Environment

David Martin, director of employee benefits product management for CUES Supplier member CUNA Mutual Group (www.cunamutual.com) in Madison, Wis., has seen a lot of changes during his 25-year career. The biggest change today, he says, is that employers are shifting away from paying for as much as they have paid historically for employee benefits. "That's no surprise - as the cost rises for them, they need to pass on some ofthat cost back to the employee," he says.

He also sees employers paring back in terms of the percentage of costs they have traditionally covered. In the life and disability area, for instance, he says, they used to pay 100 percent; today they are giving employees a choice of whether they want these products or not. "That's probably the biggest change," he notes.

Another big change Martin has seen is the shift toward consumer- driven health care. Employers, he says, "are trying to get employees to have a greater understanding of how the health care dollar should be spent so they have some 'skin in the game.'"

To accommodate some of these shifts, Martin says, it's possible that employees maybe willing to take on an even greater share of the cost of their benefits. But they need to be communicated with and to be part of the decision-making process to create that kind of engagement.

"We have stats to prove that employee engagement diminishes significantly because an employer asks an employee to contribute more to their benefit plan, but doesn't give them much choice in the matter," says Martin.

He uses a car example to help illustrate. Suppose someone came to you and said: "Fm going to buy you a car - you have to pay 20 percent ofthat car and I'll pay 80 percent." At first you might be very excited. But suppose you don't have any input into the selection ofthat car and, when it shows up, it's an old jalopy, it's slow to start and once you do get it running you find that it eats oil and burns gas like crazy. Not such a great deal after all. But what if, instead, you split the cost 50/50 and, within some parameters, were able to select your own car? "You'd be much more engaged in that process and much more excited," says Martin. "That kind of shift and increased involvement, though, is not yet happening broadly enough."

Not surprisingly, says Jim Gowan, chief operating officer of CUES Supplier member Total Administrative Services Corp. (www. tasconline.com) in Madison, Wis., employees' benefit concerns tend to begin with impacts on their own current and future financial security.

Financial Security

The biggest benefit for employees, not surprisingly, is health insurance, says Gowan. In fact, he notes, health insurance represents the biggest benefit cost for employers. Increases in that cost - still running at about 20-30 percent a year, he says, are leading to changes in coverage options and the amount of contributions employers are kicking in. "We're seeing a lot of employers in general going to highdeductible health plans," he says. In some areas, he adds, employers are cutting back on how much they contribute to premiums and funneling those dollars into health reimbursement accounts.

To help minimize costs, some employers are offering incentives to employees who choose not to take coverage, says G o wan. In cases where an employee maybe covered through a spouse's plan at another company, for instance, the employer might offer the employee some extra money to spend on other benefits, or as cash.

Options are important, notes Christoffer, especially in an environment where employees may range from the very young - and may be more interested in benefits related to having children - than those about to retire who are likely to be more interested in retirement benefits. "Try to offer as many options as you can for people who are at different places in their lives," she advises.

While health insurance benefits address financial security-related issues for employees who want to ensure they have the coverage they need to address health needs, wellness programs are another way credit unions can provide value to employees. And there's value for the credit union as well. These programs have the added benefit of improving employee health which may ultimately lead to lower overall health care costs. Veridian CU's wellness program was noted as a factor in its recent "best company" recognition.

In fact, special perks like wellness programs, fun events, recognition and other activities are widely valued by employees and contribute to a strong culture and positive environment, notes Dick.

Fun and Flexibility

Advancial FCU has a lot of employee events, Dick says, big and little. Events held at the corporate branch are replicated across all branches which, she says: "isn't always easy because we're pretty spread out." But, she adds: Brent Sheffield, CME, CSE, CCE, Advancial FCU's president/CEO and a CUES member, "really communicates to employees that we care about them in a lot of different ways."

Most notably, he does it in memorable ways. For instance, the annual winter event was held at Gilley's, a western-themed venue, and an all- staff meeting recently featured photos of Sheffield in full cowboy regalia riding the bull. A lip -synch contest was held during the Halloween season and employees were encouraged to come to work in costume based on the song they planned to lip-synch to.

Flexibility is also important to employees and a wide range of both benefit-related activities and benefit-related options.

At First Calgary Financial, for instance, a "healthy living account" provides funding for employees to support whatever healthy living means to them, says Barber. "If they want to join a gym, they'll have funding available for them. If they want to pay for doggy day care because that's their family, there are funds available. We're trying to be as broad as we can around the kinds of things that are likely to either attract or retain people."

That desire for flexibility among employees has fueled another trend that Gowan is seeing - the use of voluntary benefits. While he says he is not seeing it as much in the credit union industry, he expects it will be an area of growth. Also called "supplemental" insurance, these types of benefits are opted into by employees who pay the full cost, but the premiums are competitive because of group rates. Benefits are also portable, meaning employees "take them with them" if they leave the company or retire.

Voluntary benefits offer options. The No. 1 voluntary benefit, notes Martin, is coverage for critical illness. "People are really in fear that they're going to get a critical illness and that's the No. 1 cause of bankruptcy today." Disability and long-term care are also popular options. "Income protection is really big," he notes.

Martin adds that the increased popularity of these types of benefits is being impacted by impending health care reform considerations. "Employers realize they'll be covering more employees than they ever were." Giving employees more choices can help employers deal with the impending issue of how to pay for all benefits for all employees.

"We're also seeing fun things," he adds. "We're seeing pet insurance being offered, travel discount programs, travel clubs - things that employees can get excited about at open enrollment time."

Communication Is Key

How do you know which benefits are most valued by employees? Ask them. Seems simple, but not all credit unions go to the trouble to ask - and then really listen - to their employees when it comes not only to the types of benefits they most value, but the important attributes of those benefits.

Veridian CU does. "What makes our benefit program work well is the communication we have with our employees regarding their benefits and the ownership that that instills in them to ensure that the benefits are successful," says Christof fer. "Communication is key."

In addition to ongoing communication and maintaining open channels so employees feel free to share their thoughts and opinions regularly, Veridian CU conducts an annual survey seeking feedback on its benefit program. And, adds Christoffer: "We also touch base with them any time we're looking at offering new benefit programs to determine what their interest is."

Employees aren't the only ones who gain from this opportunity to provide feedback. Veridian CU benefits as well, says Christoffer. "It's a lot easier to develop and implement something when you have input from the people who are actually going to be using the benefits," she says.

Advancial FCU also takes employee communication and outreach very seriously, says Dick. "One of the things we do that seems to make a big difference to employees is that [Brent] and I travel to every branch and we meet with every single employee on an individual basis, both here at corporate and in all of our branches, just to listen to them and hear what they have to say about their jobs, their work environment and their ideas for making Advancial FCU a better place to work."

That practice has been going on for several years, she says, and "it's done annually. We conduct an employee survey annually, so after we get the survey results, Sheffield and I meet individually with each employee in each department and branch. The survey results serve as the basis for the conversation, but the meeting belongs to the employee, who can direct the conversation to whatever he or she wants to discuss. Now that we've been doing this for a while, some employees even take the time to prepare a long list of discussion items in advance in order to take advantage of their private time with the president."

But getting information from employees is just half of the equation. Another important element of communication is ensuring that employees understand their benefit options - and the value of those benefits, says Martin, who notes that few employers, including credit unions, are doing this well.

In fact, 2011 research by CUNA Mutual Group indicated that more than one-third of the credit unions responding did not communicate face to face with employees regarding benefits - 30 percent used email or Web only. Only 22 percent considered their employees to be highly engaged in benefit communications.

That's where credit unions like Veridian CU, Advancial FCU and First Calgary Financial are different and likely how they achieve and maintain recognition among employees, the community and award organizations as great places to work.

"I think it's critical to let employees know the reason for something," says Dick. "These are smart people and if you can tell them the reason for something, whether it's good news or not, they at least understand why."

For instance, Advancial FCU recently moved away from paying 100 percent of health care coverage to pass some costs on to employees. "It wasn't done for financial reasons so much as it was done to make them more accountable for their health care spending," she says.

The change and communication process began well over a year before the change. "We let them know that it was going to happen and put in a program where they can get discounts that would bring it almost back down to where it was before through certain wellness initiatives," she says. The results of an annual employee survey indicated that their opinion of the credit union's benefits "hardly changed at all," she says. "I think that was because we let them know well in advance that we were doing it, we let them know why we were doing it and we were very open about it."

In addition to an annual employee engagement survey, First Calgary Financial has an employee-led committee that meets several times a year to consider issues and communicate with HR about opportunities for improvements related to benefit needs.

"There are no silver bullets," says Martin. What will make the difference in terms of how employees value the benefits they're provided is the perception that your employees have of what it is that you're doing for them. That will be based both on understanding what's important to them and on communicating clearly what it is you're offering and being explicit about the benefits these offerings provide to employees."

"I think it's critical to let employees know the reason for something. These are smart people and if you can tell them the reason for something, whether it's good news or not, they at least understand why."

Suzan Dick

Resources

Read more articles about HR and benefits at cumanagement.org/archive.

To help credit unions attract and retain talent, CUES has partnered with CUNA Mutual Group to offer Executive Benefits and Retirement Service Solutions, Presented by CUNA Mutual Group. Learn more at cues.org/execbenefits.

By Un Grensing-Pophal, SPHR

Lin Grensing-Pophal, SPHR, isa free iance writer and human resource management and communication consultant in Chippewa Falls, Wis. She is the author of Humna Resources Essentials (SHRM, 2002) and Motivating Today's Employees (Self-Counsel Press, 2002).