Today’s competitive labor market means employers have to stand out from the pack. One strategy community banks can use is a well-rounded benefits package. Here are seven benefits that community banks have put in place to recruit and retain workers.
By Katie Kuehner-Hebert
Competition for talent is hotter than ever. Many community banks are weighing an expansion of their benefits packages to better attract and retain the workforce they need.
“Employees will quickly change companies for a small raise [but] will think twice if they know they are losing certain benefits … if the other organization does not offer them.”
—Valerie Utsey, ICBA
Competitive pay and quality healthcare plans are now table stakes. But many community banks are going above and beyond to offer benefits and perks that appeal to a wider swath of job hunters.
The typical percentage of total salaries that Alpine Bank contributes to its ESOP annually
Employee morale and engagement are directly linked to the benefits that a community bank offers, according to Valerie Utsey, ICBA’s executive vice president and chief human resources officer.
“Employees will quickly change companies for a small raise,” she says. “However, they will think twice if they know they are losing certain benefits that mean a lot to them if the other organization does not offer them.”
A competitive benefits package also enhances a bank’s employer brand, she adds. “Your employees become brand ambassadors, as they will be in the community espousing the unique benefits they receive as part of working at your company,” she says.
Employers are having a difficult time hiring workers after a tumultuous year, so they are broadening their search of potential candidates, which also means expanding their range of benefits, says Lydia Jilek who is senior director and intellectual capital leader of voluntary benefits solutions at Willis Towers Watson and is based in McKinney, Texas.
“For example, someone in their mid 40s coming back into the workforce now might be more interested in supplemental medical products like a critical illness plan than they would be in an employer helping them pay off student loans,” Jilek says.
In addition to the more traditional benefits offerings of medical, life insurance and 401(k) plans, here are seven benefits that may not be on community banks’ radars that could attract and retain the talent they need.
1. Employee stock ownership plans (ESOPs)
ESOPs have a number of significant tax benefits for both employees and employers, according to the National Center for Employee Ownership. Employees pay no tax on their contributions, only the distribution of their accounts, and that can be at a favorable rate. Employers can deduct for stock contributions to employees, as well as for cash contributions to ESOP reserves or to buy back shares, among other tax deductions.
Alpine Bank in Glenwood Springs, Colo., has an ESOP that’s free to employees after one year of service, says Kristi Shelton, executive vice president. The $5.6 billion-asset community bank makes a discretionary contribution each year, which historically has been 7% of total salaries.
“[Our ESOP] is an important part of our culture, as well as a valuable retirement benefit plan,” Shelton says. “Alpine gains long-term employees and the employees benefit from the company’s success.”
Having an ESOP or some sort of ownership structure for employees is “more meaningful now than it’s ever been,” says Jason Lavender, senior vice president, director of strategic initiatives at $752 million-asset TFNB Your Bank for Life in McGregor, Texas.
“COVID has certainly changed how employees view their job, responsibilities and life in general,” he says. “Having ownership in the success of our bank through an ESOP changes the mindset of employees. It’s not just a job for them.”
2. Education-related benefits
Education-related benefits can pay off for both employees, who gain new skills and insights, and employers, who keep talented workers instead of having to find new ones.
Julie Waddle, assistant vice president and digital marketing manager at $570 million-asset FNB Community Bank of Midwest City, Okla., is taking advantage of the bank’s tuition assistance benefit to attend the Graduate School of Banking at Colorado. “I feel extremely fortunate for this opportunity and working for a financial institution that values continued learning and education,” she says.
Bank of Clarke County in Berryville, Va., pays the cost of continuing education classes for any employee who holds a professional license such as a CPA and is required to complete classes to maintain the certification, says Kaley P. Crosen, executive vice president and chief human resources officer. The $1.2 billion-asset bank also reimburses all tuition fees for community college courses in business or banking and half for those at four-year institutions.
And thanks to the Consolidated Appropriations Act passed by Congress in December, all of these education-related benefits will continue to be tax-free for employees through 2025.
3. Pet insurance
More and more Americans are buying health insurance for their pets. The pet insurance market has grown an average of 24.2% over the past five years. In fact, these plans covered 3.1 million pets in 2020, according to the North American Pet Health Insurance Association.
While there is a variety of pet insurance policies, they are generally designed to cover accidents, illnesses and hospital visits, according to Canine Journal.
The reasons to obtain pet insurance are considerable. The average cost of unexpected veterinary care for dogs and cats is between $800 and $1,500.
Bank of Clarke County’s employees elect to have pet insurance “because they believe their pets are members of their family and they want to make sure they can pay any potential costs that may be associated with them,” Crosen says.
4. Giving back
Alpine Bank offers employees 24 hours of volunteer time annually “to make a difference” at their favorite nonprofit or school. The community bank is also willing to pay their dues for local civic organizations to encourage participation.
FNB Community Bank offers casual Fridays, where staff may wear jeans if they donate $1 a week to a community programs fund. The bank uses the funds to make donations to various organizations, such as the American Cancer Society, and charitable and community events. It also offers paid time off to employees who participate in its community volunteer program. Whoever has the most volunteer hours in a given year receives FNB’s Volunteer of the Year award and three additional days of paid time off.
Bank of Clarke County and TFNB both encourage employees to be involved within their foundations, and the banks also financially support employees’ favorite charities.
5. FSAs and HSAs
The Bank of Clarke County offers health savings accounts (HSAs) in conjunction with high-deductible health insurance plans, “letting the employees be in control of the insurance coverage that is the most suitable for them,” Crosen says. The bank contributes money to the HSA to help them meet their deductibles.
“We also offer FSAs [flexible spending accounts], as each employee’s situation is different. Some of them have medical expenses, while others might have dependent care needs with associated costs,” she adds.
TFNB offers both. “In today’s competitive environment, giving employees more options on possible ways they can have tax savings is important,” Lavender says.
6. Employee assistance programs
Employee assistance programs, or EAPs, provide counseling and other assistance and are designed to help employers reduce absenteeism, workers’ compensation claims, healthcare costs, accidents and grievances, according to the Society for Human Resource Management. EAPs can also help employers address safety and security issues, improve employee productivity and engagement, and reduce costs related to employee turnover.
Alpine Bank’s EAP is incorporated within its wellness program, one of its most popular benefits, Shelton says. “We started our wellness program in 1988 with a check sheet that paid you in ‘bank bucks’ for Alpine products,” she says. “It’s now evolved into a monetary incentive of $1,200 to complete fitness exams, blood draws, financial well-being classes and preventive exams.”
The community bank offers an additional incentive for exercising, pays half of the price of certain health-related activities and partially sponsors health coaching.
TFNB covers half the costs of several voluntary benefit offerings like identity theft protection and legal services for will planning, power of attorney and medical directives.
7. Social events
While it may not be the No. 1 thing employees say they want in an employer, having a fun, social and welcoming workplace can be a big benefit for some staff.
Prior to the pandemic, the Christmas party at Alpine Bank typically is “the event of the season,” Shelton says. Most of the community bank’s employees throughout the state attend, and “some travel for hours to be a part of the fun,” she adds.
Bank of Clarke County has a Fun Squad, an employee engagement committee that is tasked with bringing “fun back to banking,” Crosen says.
Cheers for Peers, one of the committee’s programs, involves Bank of Clarke County employees nominating and recognizing fellow outstanding coworkers each month. Winning employees and their nominators each receive a $50 gift card and a free lunch.
Katie Kuehner-Hebert is a writer in California.