Taking advantage of any opportunity to lessen the pain of employees who must accept reduced benefits or pay more of their own benefit expenses can pay big dividends in employee motivation and loyalty. Employee loyalty will be especially important as the economy strengthens, the labor market becomes more challenging, and, within a few years, the first of many waves of retiring baby boomers leave the working world, with fewer young workers entering the job market. If a cost-free way to help your employees compensate for losses from increased contributions to benefits or reduced raises or bonuses appeals to you, the credit union industry can help.

On the basis of traditional assumptions, your employees may believe credit union membership is not an option for people who do not work for Fortune 500 companies and who are not teachers, government workers, or members of unions. Nationwide, however, thousands of companies of all sizes and types are proving the world of credit union membership has changed dramatically in recent decades. These companies offer their employees credit union memberships, which bring employees better interest rates on savings and the appealing loan terms that consumers expect from credit unions. In some cases, credit unions also provide contemporary financial service options many consumers associate only with large banks.

The Potential Benefit for Employees and Employers Alike

A robust and varied benefits program also is a great way to sell your company as an employer to the top-tier employees whom you want to attract. According to the Employee Benefits Research Institute's 2001 biennial survey, benefits continue to be very important in job selection. Seventy-seven percent of workers reported that the benefits a prospective employer offers are very important in their decision to accept or reject a job.

The excellent customer service typical in the credit union industry may also help reduce your employees' stress levels as they manage their financial affairs, enabling them to be more productive. Credit unions have had the number one ranking in customer satisfaction among all financial institutions for the past 10 years, according to the American Banker Newspaper annual customer satisfaction survey.

Joan Morrison agrees. A credit union member since her days in the accounting and human resources/employee relations departments at Unisys, Morrison is now the HR manager at Farmington Hills, Michigan-based Virginia Tile. The tile distributor offers its 200-plus employees membership in USA Federal Credit Union, which is headquartered in the Detroit suburb of Auburn Hills. About 40 percent of Virginia Tile employees currently use the credit union membership opportunity.

"As a human resources manager I am very sensitive to the need to provide good service to my 'customers' -- our employees," says Morrison. "I expect the same high-quality service myself and want it to be the norm at any organization serving our employees. And, for example, if an employee can get a very fast response on an auto loan application when a car has to be replaced quickly, I know that has a positive impact from a work and productivity standpoint."

Things to Consider When Choosing a Credit Union If you are considering credit union membership for your employee benefits program, here are factors that you may want to consider in the decision-making and selection process:

• Consider the menu of services that a credit union can provide to your employees. Especially if you have many technically oriented workers, they are likely to appreciate a broad range of electronic banking services, such as online bill paying. Also, Morrison emphasizes that, in her experience, most workers want wide availability of ATM services as well as appealing interest rates in loans and savings programs. Some credit unions are also now offering investment services that appeal to families saving for educational expenses, retirement, or larger homes.
• Look for a credit union that will provide internal promotions, presentations, and materials that inform your employees about the credit union's membership and services. A credit union with an active promotion program makes the membership benefit truly "free" to you as an employer by not requiring large time commitments from your human resources staff. Your HR personnel should only serve as liaisons with the credit union, not spend a lot of time answering employee questions about it.
• Inquire about whether the credit union can help you save on payroll expenses by encouraging employees to sign up for direct deposit.
• If you have questions about credit unions, check with a helpful resource: the National Credit Union Association (NUCA). The NCUA insures the savings of about 80 million account holders in all federal credit unions and many state-chartered credit unions. The NCUA website at http://www.ncua.gov has a wealth of information. A typical credit union is organized via a charter from the NCUA to serve a group or groups of employees, people in a particular community, or members of an organization or association. The NCUA website includes a directory listing credit unions by state, which is a helpful starting point. By contacting an individual credit union or visiting its website, you can learn more about the terms of its charter and whether it can potentially accept your employees as members.
• As you consider bringing a credit union into your benefits program, its representatives should present its services to your company's management team to ensure the match between your company and the credit union is a good one.

Tom Alter is executive vice president of Auburn Hills-based USA Federal Credit Union, which provides financial services for employees of 180 companies, most of them in southeastern Michigan. For more information, visit http://www.usafcu.org.