TAMPA-Expense management is the name of the game at Tampa Bay FCU, and a focus on cost control was a major lesson the credit union learned as part of the recession.
Diana Wozniak, human resource manager at the credit union, said TBFCU made major changes to its budgeting when the recession hit and loan losses began piling up, starting with assigning one employee the duty of examining every single bill that came through the door. That person checked for inconsistencies like overbilling or tax mistakes, and "in the first few years, found thousands of dollars in little things-and that added up," said Wozniak.
But staff size also hurt the bottom line, and in 2009 TBFCU instituted a 5% pay cut for employees at all levels. "The 5% pay cut hurt, but we have a CEO who was really honest, and he was honest all along," said Wozniak. "Our loan losses were increasing, and that drove the bus for us."
Layoffs also became an unfortunate necessity in early 2009.
"When we first did layoffs, we did them voluntarily," said Wozniak. "Here's the package, if there's something you've been dying to do and you want to, take this. We tried to make it as easy as possible. That helped people, because the rest of the staff could see that it was a choice for those people." Later that year, the CU began forced layoffs as well. And as far back as 2008 it did not rehire staff lost due to attrition. A pair of branches was also closed in 2008. All told, the CU has reduced its staff from a high of 127 in 2007 to 90 employees today. Between the end of 2009 and the end of 2011, compensation and benefits were reduced by 32%.
Changes in Benefits Relationships
Wozniak explained that changes were also made to the benefits program as a way to trim costs. While the overall benefits were not altered, the credit union stopped making matching and discretionary contributions to employee 401(k)s, did away with education reimbursements and cut all staff parties in 2009.
Additionally, employee health insurance-which was formerly covered at 100%-has now been reduced to 75%, with employees paying the other 25%. Travel and conference expenditures have also been reduced by 61%.
Tampa Bay FCU currently serves 27,000 members with $218 million in assets-$100 million less than in 2007. Since the end of 2009, the credit union's net worth ratio has risen from 5.52% to 7.56% today.
"As painful as these changes were for the organization and the employees, they were necessary to get us where we are today," said Wozniak. "We made the changes in the most humane way possible-giving employees all the information we knew as soon as we knew it."