Employee efficiency and productivity are two components that are vital to the success of credit unions. Well-oiled operations along with motivated, well-trained employees bring about better performance across the organization.
But there are other metrics human resources departments should monitor to identify areas for improvement and ensure the cooperative’s success. Here are seven.
1. Assets Per Employee
Asset per employee measures the dollar amount of assets the credit union manages for each full-time employee. Higher values are more desirable because they indicate the institution is managing more money with fewer employees. This efficiency metric gives insight into the productivity of the credit union and how effective it is at managing members’ money.
External factors impacting this ratio include technology, employee training, delivery channels, and loan concentration.
2. Members Per Full-Time Employee
As human resources costs are generally the largest operating expense at credit unions, this ratio is critical. A higher ratio means the credit union is serving more members with fewer employees and is generally more productive. To increase this ratio, a credit union might consider implementing new technology, increasing employee development, or employing remote delivery channels.
In conjunction with members per full-time employee, credit unions should examine product penetration, members per branch, membership requirements, and distribution of membership throughout different geographic areas.
Factors that influence this the ratio include growth, product development, service goals, and technology.
3. Income Per Employee
Income per employee measures how much income each employee generates. A higher number indicates the credit union is generating income while managing fewer employees. Primary contributors that will drive up this metric include fee income strategies, workforce training, and management spread.
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4. Shares Per Employee
By and large, a higher ratio of shares per employee derives from higher employee productivity and efficiency. A credit union that attracts and retains members and employees generally reports higher ratios.
The shares element of the ratio can be influenced by factors such as marketing effectiveness and the economic situation of members and potential members.
5. Loans Per Employee
The higher the loan per employee ratio, the more productive credit union employees are at generating loans to their members. A high ratio indicates effective use of delivery channels in providing loans or a large concentration of high-balance loan products, such as mortgages. The loan component reflects the lending philosophy of the credit union and the members’ willingness and ability to borrow.
6. Accounts Per Employee
The number of loan and deposit accounts per employee measures how well employees and operations are able to serve high volumes of accounts while maintaining service standards. Cooperatives that employ a full-service strategy are apt to have a higher ratio, which usually means the credit union is more productive.
7. Income Per Employee Versus Salary And Benefit Per Employee
Examining the average salary and benefit per employee along with income per employee allow a credit union to gauge if higher salary and benefits correlate with higher income. A high salary and benefit per employee along with low income per employee could suggest inefficiencies within the credit union.
Several external factors impact the average salary and benefit per employee, including geographic location and cost of living, employee productivity, organizational structure, and the credit union’s compensation philosophy.