CUs Boast Low Turnover Rates

But that's no reason to be complacent, new CUNA survey says.

January 18, 2012

The recently released 2011-2012 Credit Union Turnover and Staffing Survey, published by CUNA, recounts revealing data, much of which is consistent with recent and expected trends.

Turnover in the credit union industry is low for all job classifications, from management to front-line staff—at 12% overall, according to the survey. But credit unions shouldn’t get complacent.

They must monitor staffing at their credit union closely, to see not only why employees are leaving, but also why they’re staying. Information gained then can help determine future moves for the credit union—and help minimize damage when employees do leave.

“Analyze how you’re compensating employees that are in positions you find really hard to fill,” says Beth Soltis, CUNA’s senior research analyst. “How can you make them stay? Sometimes there are things other than pay that you can do to keep these quality employees.”

She cites opportunities for professional development and retirement benefits as two such incentives.

One instance of professional development is taking place among front-line staff, reports the survey. As members demand financial advice, more front-line staff are acting more as member service representatives (MSR) or customer service representatives (CSR) than tellers.

But the survey also reveals an increase in part-time and multitasking staff. Credit unions hesitant to hire full-time employees instead are hiring part-time staff.

Today, 16% of employees work only part-time. They’re turning to multitasking staff to cover other duties too. This way, they don’t have to hire as many employees, and they can bolster productivity by having multitasking employees work in absent employees’ places.

Meanwhile, turnover rates for employees in management positions are very low—at 5%, according to the survey. While it’s positive this number remains low, Soltis points out there are few qualified candidates for management positions, and therefore, a lot of competition for the best management staff. This includes the CEO.

“With the recession and with the slow recovery we’re having, a lot of CEOs haven’t been getting pay increases,” says Soltis. “They’re steering the credit unions through this really difficult time so they’re definitely putting a lot into their position. But if they continue to do that and don’t get compensated accordingly, eventually they’re going to lose their motivation, or they may get inspired to lead somewhere else.”

But compensating employees properly is increasingly difficult because costs are rising in the financial services industry, thanks to increases in organizational and compliance costs. Compliance costs have risen largely due to high costs from interchange legislation and health-care reform, according to the survey.

Larger credit unions may suffer less than smaller credit unions though, thanks to economies of scale, says the report. It takes fewer staff for a larger credit union to work efficiently, proportionally that is, compared with smaller credit unions. Organizational and compliance costs are also proportionally higher for smaller credit unions.

Still, credit unions are managing to hold onto employees. While this is due to a number of factors, one reason may be because few employees would consider looking for a new job until other organizations begin hiring again, according to the survey.

While credit unions’ turnover rate is actually higher than it was in 2009 (12% versus 9%), it’s still significantly lower than all other industries’ rates, including banking or finance. These rates stand at 16%.