Payroll Report: Community Banks Raising Pay and Compensation Benefits to Retain Executive and Non-executive Staff
Community Banks are facing serious challenges in retaining top talent. The industry is reeling under intense pressure due to lack of skilled workforce. And, with rising inflation costs, even the existing workforce are demanding competitive compensation or community banks risk losing these employees to competitors or other industries. A recent report highlights the various challenges linked to compensation and HR talent retention costs.
According to The 2022 Compensation Survey, conducted by Bank Director and sponsored by Newcleus Compensation Advisor, almost all (98%) of responding directors, human resources officers, CEOs and other senior executives of U.S. banks increased non-executive pay. 85% of the surveyed respondents increased executive compensation in response to the heightened competition to recruit and retain key talent in 2021. In totality, the survey finds that wages were under pressure in 2021.
The findings of this report provide Directors and Officers in financial organizations with valuable planning and strategic information.
“Our most recent survey of talent and compensation challenges facing community banks affirms these pressures we have observed in the current environment – escalating compensation and benefit costs and a struggle to find and retain good employees,” said Flynt Gallagher, President of Newcleus Compensation Advisors.
Flynt added, “Today, community banks are competing with diverse industries for talent, and there just aren’t enough qualified candidates to go around, driving up compensation costs. Clearly, the findings in our survey reveal the struggle our industry faces to find and keep the people necessary for their success.”
The study examines wages, compensation management and the special challenges that organizations face when hiring and retaining the valuable employees that make up their key leadership teams as well as their workforce overall.
The survey executive summary says, “When asked about the specific challenges their organization faces in attracting and retaining talent, bankers and directors point to an insufficient number of qualified candidates (76%), rising wages in their markets (68%) and rising pay for key positions (43%). In anonymous comments, respondents describe other difficulties, such as competition from other industries, challenges with remote or hybrid work and younger workers’ disinclination for certain types of long-term compensation.”
The survey gathered data on CEO and director compensation, CEO turnover rates and performance measures, as well as additional talent needs and online recruiting and reputation monitoring for community banks.
The views of 307 independent directors, CEOs, HROs and other senior executives of U.S. banks below $100 billion in assets were gathered in 2021. Compensation data for directors, non-executive chairs and CEOs was also collected from the proxy statements of 96 publicly traded banks.
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