Employment in Credit Unions (Part III): Employee Productivity

This is the final article of our series on employment trends and statistics focusing on headcount, salaries & benefits, and productivity in the credit union industry from December 2000 to December 2005.


Note: This is the final article of a 3-part series on employment trends and statistics between December 2000 and December 2005. The previous articles discuss Headcount and Salaries and Benefits.

While employee productivity can be measured by any number of criteria that are specific to a credit union’s service strategy, we use the following three to gauge productivity trends: members, assets and operating income per Full Time Equivalent (FTE) employee.*

Of these three metrics, assets per employee and operating income per employee have been rising since 2005. The members per employee ratio, however, has been declining.

Members per FTE employee

The number of members per employee has been declining since 2000. This decline is due to decreasing membership growth in the same period.

Members per employee fell from 420 in December 2000 to 389 in 2005. The annual decrease has ranged between 1% - 2% and is supported by the fact that the annual increase in FTE employees is higher than the annual membership growth leading to a fall in members per FTE employee. ( Click here to read the first article in this series on headcount.)

One reason for this could be the addition of new branches by credit unions in the last few years. In 2004, credit unions added 795 new branches to their network, followed by another 523 new branches in 2005. Since new branches take more time to bring in members locally, this could have driven up employee headcount with no parallel increase in membership.

On the flip side, this is good news for credit union members as this signifies the industry’s attempt to offer greater ‘in-person’ service and personal attention to their needs.

Assets per FTE employee

Assets per employee have been rising. Since 2000, total industry assets have grown by $264 billion at a compounded annual growth rate of ten percent while FTE employees have grown by four percent. The differential has pushed up the assets per employee ratio from $2.4 million in 2000 to $3.1 million in 2005.

However, much of this increase can be attributed to the growth of real estate loans in recent years and the fact that real estate loans tend to be higher value loans. In 2000, the real estate loans comprised only 27 percent of all assets of the industry but by 2005, this number had grown to 32 percent, thereby contributing to rising employee productivity.

Operating income per FTE employee

Operating income 2 per FTE employee has also risen over the last five years, from $102,353 in 2000 to $124,268 in 2005. During this period, the operating income grew from $18.3 billion to $27.5 billion at a rate of 8.5 percent annually.

The rising operating income during this period is also driven by strong growth in the non-interest income for the industry. Growing at a compounded annual growth rate of 15.3 percent since 2000, non-interest income accounted for 13.3 percent of the total income for the industry in 2005 compared to 7.9 percent in 2000.

Employee productivity is one of the most important performance criteria for credit unions since it measures service delivery to the members against their most important but expensive resource: the employees.

The first step towards using this tool is establishing meaningful benchmarks by comparing yourself to other credit unions in your regions or state. Software like Peer-to-Peer or www.cuanalyzer.com can help HR managers identify their peer credit unions and establish correct benchmarks for measuring employee productivity.

  • For the purposes of this analysis, we assume that two part-time employees equal one FTE.
  • We calculate operating income =, Net interest income (after provision for loan and lease losses) + Fee Income + Other operating income



April 10, 2006


  • It would be interesting to divide the average salary and benefits per employee by the average net operating income per employee to see if productivity by this measure is actually rising.
  • Author's reply: Although since 2000, that ratio has moved in a tight band averaging around 38.5%, productivity by this measure is falling. 2005 marks the 4th straight year in a row that this ratio has been increasing. Mimicking the national employment trends, the average salary & benefit as a percentage of average net income per employee has been 37.7%, 38.7%, 37.4%, 38.4%, 39% and 39.8% for each of the year between 2000 and 2005.
  • What about software programs to improve employee productivity?I have tried a few for example Rescue Time, then I found http://www.timedoctor.com .Its the best software because it makes it very hard for the person to be unproductive.