Credit unions analyze reams of data every day that affect their bottom line. But many fall short when quantifying the impact of the engine that drives the train: their employees.
“Human capital is viewed as one of an organization’s foremost assets and one of its largest expenses,” notes Ronald Adler, president/CEO of Laurdan Associates, a human resources [HR] consulting firm. “The question is, shouldn’t investors be looking at some of the measurements of human capital? Because that may affect both short-term and longer term organizational results.”
This isn’t just an interesting exercise. Moody’s is considering how best to assess businesses’ HR management as part of its credit rating activities.
So it’s no surprise that CEOs, chief financial officers, and operational managers are now working with HR professionals to devise metrics that tie employee engagement and development to financial performance, and facilitate benchmarking with peer organizations and the wider business sector.
Credit unions’ use of HR metrics unions has intensified in recent years: 81% have begun using this data within the last decade, according to a May 2012 survey by the CUNA Human Resources and Training and Development (HR/TD) Council.
Still, only 5% of organizations provide metrics that accurately correlate talent initiatives and business performance, according to a recent business survey. To bridge that gap, Jessica Miller-Merrell suggests in her SmartRecruiting blog that HR managers pose this question to their CEO: “What keeps you and your executive team up at night?” Tailor your range of statistics to address those concerns, Adler says.
Here’s how some credit unions use HR metrics:
►SF Police Credit Union relies on HR metrics to monitor possible morale or management issues within specific departments, and to pinpoint operational issues. Noting that the lag time on filling vacant positions was growing, for example, the $730 million asset credit union added an extra human resources staffer.
Also, sensing an internal development deficiency, SF Police devised “ready for promotion” metrics to provide a road map for advancement.
►Cognizant of a survey by WorkUSA and Watson Wyatt showing that companies with highly engaged staff have 26% higher revenue per employee, $3.2 billion asset Mountain America Credit Union surveys all of its 1,167 employees at 72 branches each year to ensure everyone’s feedback is considered.
It also established an “Applause” program in which employees who are recognized by their peers for extraordinary member and internal service are eligible for cash awards.
►Although 87% of credit unions indicated in the CUNA HR/TD Council survey that they produce HR metrics without support from specialized software or vendors, $10 billion asset BECU in Seattle created a metrics and reporting manager position.
Credit unions that want to measure how their staff stacks up against the competition should “work backwards” by investigating what statistics are already available from peer groups, trade and HR associations, government databases, leagues, and vendors, suggests Kate Walsh-Bratton, senior manager of Employee Benefits/Business Insight for CUNA Mutual Group.
Further, involve upper management in the evaluation process because of their operational insight. Noticing high rates of turnover in its call center, execs at one of Adler’s client companies worked with HR staff to identify a key cost-saving opportunity, changing an employee’s first review to 45 days rather than the one-year mark to better weed out bad hires.
Lynn Stephens, senior vice president of human resources at Mountain America, says HR metrics speak to a central operating principle: “We always need to consider, ‘What can we do to give ourselves a competitive advantage to allow us to serve our members better?’ ”
For more information, consult the CUNA HR/TD Council white paper “HR Metrics: The Numbers in Support of Strategic and Operational Initiatives.”
White papers are free to Council members; $50 for nonmembers.