Electric cooperatives having a hard time attracting and retaining employees for hard-to-fill positions now have new tools at their disposal.
Homestead Advisers, NRECA’s financial services subsidiary, is helping co-ops create customized incentive and bonus programs for employees in technical roles, linework and other in-demand fields. Funding for the bonus and retention awards is invested in a money market mutual fund, which, when vested, goes to the employee.
“We created these programs to meet demand and the workforce challenges co-ops are facing,” said Homestead Advisers President and CEO Mark Santero, who promoted the two programs during the five NRECA Regional Meetings this fall.
Large, publicly traded companies can offer stock options to motivate workers, “but one of the challenges is that a co-op can’t do that,” Santero said.
The retention and incentive programs aim to help co-ops stand out in today’s competitive labor market by rewarding high contributors and building employee loyalty by “keeping workers long enough to educate and train employees on the benefits of working at a co-op,” Santero said. He added that co-ops could also use the plan to encourage lineworkers approaching retirement to stick around and help train and mentor young apprentices.
Participating co-ops can structure their plans to recruit or reward staff members for meeting particular job targets, Santero said. “They can attract, retain, and reward employees with either one of those plans or both. And the plans can be amended if an individual’s role changes or the person gets promoted.”
Homestead Advisers will help co-ops create their own programs by providing templates, forms and other assistance. Co-ops can choose vesting periods, amounts, percentage of salary and payment options.
Employees and co-op managers will get quarterly account statements “to serve as a consistent reminder of the potential award that’s coming down the road—or the amount potentially left on the table if the employee were to leave,” Santero said.
And when bonuses vest, Homestead Advisers will contact employees to offer support and financial wellness guidance.
Co-ops are experiencing unprecedented turnover across all positions, but particularly among lineworkers, broadband specialists and engineers. In 2021 and 2022, turnover at co-ops shot up by more than 20%, according to recent NRECA workforce data.
Santero meets regularly with co-ops on economic issues, and attracting and keeping workers is a hot topic; the new programs were borne out of one of those sessions.
“Co-op broadband specialists are vulnerable to the T-Mobiles and the Verizons of the world, and co-ops are losing warehouse people to the Amazons, Targets and Walmarts,” he said. “Every year a line apprentice goes through training, they become more vulnerable to IOUs and contractors wanting to hire them.
“When we look at our crystal ball, it’s not going to change anytime soon. I hear it time and time again. Every part of the country is going through labor issues.”
Homestead Advisers provides a range of investment advisory services, including financial planning, and also serves as the investment adviser for the Homestead Funds, a family of registered mutual funds.
Homestead Advisers Corp., a registered investment adviser with the U.S. Securities and Exchange Commission, is an indirect, wholly owned subsidiary of NRECA.