Employee Pay and Performance are Key to Branch Enhancements

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.

 
 

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 13 months.

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 quality survey

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. Click here for more information.

 

 

 

March 24, 2003


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