Do More With Less

How MECU doubled its assets while holding staffing expenses steady.

In 1996, Motorola introduced the Motorola StarTAC Wearable Cellular Telephone. At 3.1 ounces, it was the smallest and lightest mobile phone available and was among the earliest mobile phone devices to gain widespread adoption among consumers. Also in1996, Michael Murphy began working at Motorola Employees Credit Union. At the time, the Schaumburg, IL-based credit union had approximately 44,000 members with an average share balance of $4,500 and an asset base of $221.6 million.

Today, eBay uses the word vintage to describe the StarTAC, and consumers are wearing mobile phones on their wrists. Things are different at MECU, too. Its membership has dropped to slightly fewer than 39,000, yet its average share balancehas more than quadrupled to $20,000. Its asset base has grown, too to $861 million. All this growth, yet MECU has been able to hold its staffing numbersto around 100 employees, plus or minus a few here and there.

Data as of December 31
Callahan & Associates |

Source: Callahan & Associates’ Peer-to-Peer Analytics

According to Search & Analyze data on, it has more assets per full-time employee than peer credit unions with $500 million to $1 billion in assets $8.4 millionversus $3.9 million, respectively. It has more loan and share accounts per employee than its peers, 999 versus 853; it serves more members per employee than its peers, 378 versus 350; and it earns more loan income per full-time employee than its peers,$183,128 versus $114,998.

Attaining this kind of productivity is an achievement in and of itself, but MECU has done this while facing hurdles not only in the financial services environment landscape but also within its core sponsor’s market.

MECU Productivity Metrics

  • Assets per FTE: $8.4M (peer is $3.9M, industry is $4.3M)
  • Loan and Share Accounts per FTE: 999 (peer is 853, industry is 925)
  • Loan Income per FTE: $183,128 (peer is $114,998; industry is $124,783)
  • Net Income per FTE: $54,596 (peer is $29,055; industry is 32,436)

Sponsor Hurdles

During the past 10 to 12 years, Motorola has gone through a series of changes, divisions, and sales that have resulted in overall downsizing meaning there has been little opportunity for MECU to bring on new members. Instead of focusing on attractingnew members, MECU turned its energy toward growing its wallet share among existing ones.

We’ve been able to grow the credit union without the need to bring in new members, says Murphy, who is now chief operating officer at MECU. It’s not to say we wouldn’t like to have grown members, it’sjust there wasn’t a great opportunity to bring in new members. So we adapted to the situation and grew the credit union through share of wallet

The credit union focuses heavily on member advocacy; a metric that measures whether MECU simplifies members’ lives, protects their privacy, and generally provides a good experience for its members. According to Murphy, the member advocacy scoreis highly correlated with a member’s future purchase intention. MECU monitors the score monthly and uses it to incent its staff. That effort has resulted in a member advocacy score that increases year after year.

Source: Motorola Employees Credit Union

Staffing Advantages, Membership Challenges

Despite growing its assets, MECU has been able to keep the number of people it employs fairly consistent. It had 95 employees in 2008 and 102 at year-end 2013, according to Callahan’s Peer-to-Peer analytics. This has allowed the credit union tokeep expenses down and return a higher value to its members in the form of lower loan rates, higher savings rates, lower fees, and in some years a patronage dividend.

It takes the same number of employees to handle an account that has $5,000 versus an account that has $20,000, Murphy says. You don’t need more employees to handle four times as much in assets.

But MECU’s staffing model might change in the future. The credit union is actively looking for new sponsor companies to expand its membership, which has presented a new set of challenges. Namely accessibility. With the exception of its main office,MECU’s branches are located within the businesses they serve and are not available to the public.

Our business model going forward is to target members who prefer to do business through automated services, Murphy says. Even today we don’t have branches in all the places our members work.

MECU has members in all 50 states and many of those have no access to a brick-and-mortar branch. Instead, they rely exclusively on remote services such as online banking, mobile banking, e-statements, and mobile deposits. As the credit union works togrow its membership, it is targeting new members who prefer to use mobile services. This minimizes the need for a physical presence to deliver services.

MECU aims to have 65,000 members and $1.5 billion in loans by the end of 2025. And as membership grows, MECU plans to maintain a steady members-per-full-time-employee ratio of 378 to 1.

In order to accomplish that, we’re continuing to focus on remote services, Murphy says. Also, rather than expand to a community charter, we are focused on sponsor organizations. In our view, that is a more cost-effective approachthan expanding into a community that requires a more elaborate branch structure.

July 24, 2014

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