Despite improvement since the 1970s, there continues to be a significant gender wage gap in the United States. According to the White House, “In 2014, the typical woman working full-time all year in the United States earned only 79% of what the typical man earned working full-time all year.”
Further research based on U.S. Census Data and published by the American Association of University Women breaks down how the gender pay gap varies by state. In North Carolina, for example, women fare slightly better than the national average, earning 85% of what men make. Louisiana comes in last out of the 50 states with women earning a mere 65% of their male counterparts.
Click image to view larger size. Source: AAUU
CU QUICK FACTS
Local Government FCU
Data as of 03.31.16
Headquarters: Raleigh, NC
12 Month Share Growth: 11.17%
12 Month Loan Growth: 14.65%
What’s A Credit Union To Do?
One credit union’s approach to equal pay eliminates negotiations and sets salary levels on clear, market-based data. Local Government Federal Credit Union ($1.7B, Raleigh, NC) has 153 full-time employees and outsources its delivery channels to a larger credit union, State Employees’ Credit Union ($33.3B, Raleigh, NC.)
“Treating people fairly is one of the core values set by our board of directors,” says Maurice Smith, CEO of LGFCU. “Salary negotiations can have disparate impacts on minority populations who might feel less empowered to negotiate.”
In order to prevent an adversarial relationship and build trust from the onset of employment, the credit union has not negotiated salaries since Smith became CEO 15 years ago. Instead, LGFCU sets salary levels based on market data for each of its staff positions. The credit union shares these levels openly during the hiring process along with its overall compensation philosophy.
The credit union’s “Time to Climb” salary structure encourages performance by giving employees a clear timeline to build their skills and earn what the credit union considers the market salary for their position.
Click here to read more about LGFCU’s salary philosophy in "How To Take The Emotion Out Of Salary Negotiations And Still Keep Employees Engaged Read."
Local Government FCU is serious about balance within the organization. Check out this demographic breakdown of the credit union's staff.
Black or African American: 35
Hispanic or Latino: 5
Native Hawaiian or Other Pacific Islander: 1
Two or More Races: 1
LGFCU also reviews salary levels annually to incorporate movement in the market and maintain equitable compensation for all employees.
“Behind the scenes, we’re ensuring we don’t unwittingly treat people differently over time," Smith says. "Each year, we cross-reference our salaries and look for any disparate impacts within our populations based on factors like gender, age, or race.”
The credit union doesn’t have tellers or other large segments of similar job functions to make direct comparisons, so its philosophy of paying each employee fairly based on what the market data shows is critical.
“If you pay someone based on the market value of the work they are bringing to the organization in a blind way, then any gender, racial, or age bias should take care of itself,” Smith says.
Fair Treatment Extends Beyond Pay
In addition to its compensation philosophy, LGFCU promotes work-life balance and encourages its employees to put family first.
“We don’t want to burn out our employees," Smith says. "If we do that, they’re no good to their families or to their employer,”
One way the credit union encourages balance is through an additional 16 hours per year of community service leave for each employee on top of vacation and sick leave. Employees can use this time to help at a child’s school, in a soup kitchen, or any other way they would like to serve their community.
If you’re not genuine, authentic, and fair with people, they will figure it out and it will undercut your credibility as an organization.
“A lot of our practices are not codified in terms of work-life balance, but we try to reinforce it through the way we treat each of our employees,” Smith says.
And although LGFCU doesn't force employees to take vacations, it does monitor and encourage time off each year so employees feel good about taking time to refresh and unplug.
How Do You Compare?
Check out LGFCU’s performance profile on Search & Analyze. Then build your own peer group and browse performance reports for more insightful comparisons.
Equity Starts At The Top
In the case of LGFCU, fairness starts with the credit union’s board of directors.
“Our intention to treat people fairly or neutralize the gender pay gap isn’t a tactic," Smith says. "It’s a board philosophy.”
By setting the credit union’s core values — including upholding the ideal of fairness — and putting policy in place, the board sets the stage for how LGFCU treats employees. Meanwhile, the credit union’s CEO executes through specific actions.
“If you’re not genuine, authentic, and fair with people, they will figure it out," Smith says. "And it will undercut your credibility as an organization.”
As far as advice for other credit unions, the veteran CEO encourages starting at the top.
“Any credit union that is intent on treating employees fairly should start with the board to codify that policy and hold the management team accountable for implementing it.”