Employee retention is an area of concern for many credit unions,
although only 13% of credit unions responding to a recent Callahan
& Associates survey offer a formal retention program for branch
employees. Two years ago, First Financial Credit Union implemented
a retention plan that has been successful in reducing branch employee
turnover by half. The California credit union has $538 million assets
and over 74,000 members.
Carlton Mussman, the credit union's chief operating officer, was
charged with improving employee retention. His first step was to
conduct research on retention rates, to find out the scope of the
problem industry-wide, and how others were tackling it. He discovered
that branch tellers have one of the highest turnover rates among
all employee groups, lasting only about 11 months on average. By
comparison, fast food workers stay put two months longer, about
He next held a focus group with the branch employees affected -
tellers, new account representatives and phone representatives -
in order to get their insights.
The plan developed uses higher pay as a prime motivator, and reps
are hired at a competitive salary. Raises are based on employees
meeting skill and productivity goals at 3- and 6-months' tenure.
The scorecards include some of the following items for each position:
- Tellers: transactions per hour, booked checking account referrals,
loans closed from referrals, score on service quality survey
- New account and phone sales reps: loan products booked, new
checking accounts, score on service quality survey
- Phone service reps: funded checking accounts, cross sales,
results of internal phone audits, abandonment rate, score on service
Full-time employees that meet the scorecard criteria are eligible
for a 5.0% salary increase (7.5% raise for part-time employees)
at 3 and 6 months.
First Financial is pleased with the impact of this program. According
to Mussman, ''The benefits of lower turnover include decreased
errors and training time as well as cost savings. This program has
added an average 6 to 8 months tenure for our branch employees.''
Find out how your credit union's branch performance stacks up against
its peers - and how others are changing aspects of the traditional
branch in order to meet the needs of current and potential members.
here for more information.