Banking Compensation Trends for 2021
At the beginning of 2020 Crowe Bank Compensation and Benefits Survey published data that showed most banks stayed extremely busy administering PPP loans during COVID-19. This was the 39th annual bank compensation and benefit survey Crowe has publicly done. The data came from 386 banks and credit unions which included information on benefits, incentives, director compensation and human resource practices, salary, and bonus benchmarks for 273 job positions. According to the article COVID-19 Forced Changes In Banking Industry, Data Shows :
“For years, banks have been exploring reductions in lagging or low-performing branches to reduce operating costs.”
Said Timothy Reimink, a consulting managing director specializing in financial services and performance improvement at Crowe.
“With the pandemic accelerating the decline in branch foot traffic and forcing customers to adopt digital banking solutions, many banks have begun to move more aggressively to reduce their costs. A secondary impact of that can be seen in the data on job reductions and future hiring.”
In response to the survey:
5% of employees were laid off due to the pandemic
29% eliminated or deferred planned new hire positions
44% are planning smaller-than-normal raises for current staff
With banks considered essential businesses many kept hiring for their branch during various stay-at-home orders but allowed back-office staff to work remotely sometimes. Reimink mentions how working from home was a big shift for some banks because not everyone adapted to technology the same way.
The survey did find other key points:
- The 2020 median salaries of nearly all the positions recorded in the survey increased compared to 2018, though several were lower this year than compared to 2019.
- The position of CEO/president reported a 6% increase in median salary since 2019, for a 2020 average median salary of $245,000, one of the largest reported percentage increases of any position in the survey.
- Branch managers had a more than 5% drop in their reported annual salary in the past year, which, according to Reimink, is likely reflective of the branch reduction trend.
- Customer service representatives’ median salary increased by nearly 6% since 2019, a sign that keeping customers satisfied is a priority as banks compete for customers.
- Fifty-five percent of respondents reported provided gloves as personal protection equipment (PPE) for on-site staff and 18% provided face masks.
When you look at the age of each position broken down you notice that 50% of executives are 56 years or older and 28% of managers are in this range. Knowing that information Mark Walztoni was surprised that only 58% of banks had reported a board-approved succession plan.
“Executives likely have managers who they expect will be able to succeed them after retirement. However, it’s important to formally document that plan so board members know which executive roles might be filled from within the organization and which areas might require external hires. In a year that’s been filled with so much uncertainty, a long-term vision is critical for the health of the bank.”
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