AUX Blog

Fresh off the press is a brand new industry whitepaper that we’d like to share with our blog readership today on: trends that make accounting difficult for small credit unions.

As an outsourced accounting provider, we have been able to compile data from dozens of small credit unions across the country to produce this in-depth whitepaper. Over the past five years, we’ve consulted with a wide swath of credit unions and found insightful trends in the <$100M asset range. From credit unions in sparsely populated rural regions, to niche credit unions residing in major metropolitan cities, read on to learn what some of the biggest obstacles small credit unions are facing today.

2018 brought with it a 3.7% unemployment rate — the lowest in roughly 50 years. In the short-term, a low unemployment rate makes it more difficult to fill available jobs at small credit unions. The power of choice shifts to the job candidate, who may be entertaining multiple offers.

To make a strong offer when it comes to hiring for a full-time accounting position, you’ll need to be competitive in terms of compensation and consider offering perks that are otherwise hard to come by, such as remote days and unlimited paid time off.

All that said, most small credit unions have a hard time offering competitive compensation when it comes to operating in a major metropolitan area with a high cost of living or conversely, a rural area with a small local talent pool.

Because the economy is so close to full employment, your small credit union has the best chance of retaining top talent when your physical location exists somewhere in between a large city and a small town.

On the larger city extreme, consider a place like San Francisco. The cost of living is 80% higher than the national average. The median cost to rent a 2 bedroom apartment is $4650/month (a yearly cost that’s more than the median yearly US full-time salary).

Being able to adequately compensate an entry-level accountant will undoubtedly be difficult for the average small credit union. Being able to afford the desired salary of a CFO-level employee in a big city is completely out of reach for the average small credit union.

A quick fact about our outsourced services: our pricing doesn’t change by locale, allowing you to effectively pivot away from this potential issue if your credit union is located in a high-cost-of-living city like San Francisco, Washington DC, or New York.

Small credit unions face the opposite type of problem, as well:

You’ll similarly find your resources overextended when trying to attract capable entry-level and especially CFO-level accounting employees.

Small towns mean a limited pool of locals to pick from. Because of this, they invoke the necessity to create incentives to get capable accountants to move closer. This was certainly the case for our client in a rural Midwest town, who had a lot of trouble finding people to fill their higher-level positions.

The major issues for small credit unions in rural areas involve a “No” answer to all of the following questions:

1. Are there capable job candidates living within a reasonable commuting distance of your credit union?
2. Are candidates willing to move to work at your rural credit union?
3. Can you pay capable candidates enough to incentivize them to move?
4. Will your new employees be able to learn credit union accounting in a short period of time?

Any of these hitting a nerve? Click here to download the full whitepaper and see the rest of the trends that are affecting small credit unions.

If there is a topic you would be interested in seeing, contact us and let us know!