Bridgewater Bank executives say the pending increase in minimum starting wages in their institution to $20 per hour next month is necessary to keep entry-level employees on board and foster a positive work environment.
The need to offer additional amenities and starting pay increases comes as companies, including banks, face an increasingly competitive economic environment.
The Bridgewater Bank change covers all regular, full-time employees, beginning Aug. 1 and is well above Minnesota’s current minimum wage of $10.08 for large employers and $8.21 for others. Bridgewater President and CEO Jerry Baack noted that Bridgewater’s Strategic Leadership Board had discussed how the organization differentiated itself through its offerings and other amenities in a competitive employment market, including showing their entry-level employees their value to the organization. The increase represents an 11 percent rise in the bank’s existing minimum wage and will affect 14 percent of its full-time employee base. Five of 17 open positions will be impacted.
Dan McGuire, chief human resources officer at Mason City, Iowa-based First Citizens Bank, said the financial institution is also aware of the wage pressures. He feels those upward salary trends could be permanent, noting the competition to attract employees means First Citizens Bank must differentiate itself from its competition.
“It’s challenging,” he said.
During the pandemic, McGuire noted the $1.6 billion First Citizens Bank, which employs approximately 210 part- and full-time workers in its eight branches, has focused on retaining employees and using technology to take care of customers over the last approximately 18 months, avoiding furloughs in the process. During the last few months, that emphasis has shifted to recruitment as several employees retired. To address that need, First Citizens Bank has used social media and pitched its community-oriented nature to recruit potential employees.
Starting wages for bank tellers start at $13 an hour, but that number can increase depending on employee experience and beginning roles (minimum wage in the state matches the current federal standard of $7.25 an hour). McGuire said discussion on increasing the bank’s minimum rates will take place this year.
The competition for employees comes as the nation continues recovering from the COVID-19 pandemic. That struggle has stretched to some of the largest financial institutions in the world: Retail bank Wells Fargo has already raised its minimum wage from $15 to $20 per hour depending on employee location. Fellow banking giant Bank of America has raised its minimum wage to $20. Both plan to have their U.S. minimum wages at $25 per hour by 2025.
Banks are also facing competition from the public sector: Minnesota’s Hennepin County, where Bridgewater is headquartered, increased its minimum wage to $20 in March. The Federal Reserve’s July 14 Beige Book revealed a growing share of employers were raising wages by 3 percent or more. Numerous contacts also reported additional incentives, including hiring and retention bonuses and tuition reimbursement.
‘We would rather be ahead of the curve’
Bridgewater Bank, with headquarters in St. Louis Park and locations throughout the metro, is believed to be one of the first Minnesota companies to establish the $20 minimum wage.
“We would rather be ahead of the curve too, I think, with the wage accrual at the lower end of our staff, or what we’d consider our entry-level staff levels,” Baack said. “I think there’s going to be continual pressure on that sector.”
Baack attributed Bridgewater’s growth to its unique size and ability to attract members who have been impacted by recent mergers and acquisitions. Bridgewater secured 500 more commercial clients through the more than $950 billion federal Payroll Protection Program. For growth trends to continue, Baack said Bridgewater will continue executing on existing offerings and work from its new corporate center.
Bridgewater Bank, a subsidiary of Bridgewater Bancshares Inc., has $2.66 billion in deposits and $3.06 billion in assets.