A hallmark of any successful organization is efficiency - being able to achieve the most, in terms of results, with the least amount of wasted effort or resources. When gaining new members, a credit union shouldn't have to add staff at an equal pace. Technology should support your credit union, allowing you to maximize the effectiveness of each team member. If credit union member growth is leading to exploding operating costs then you may need to take a closer look under the hood. 

Efficiencies can be found in every process and every activity if you have the data and the awareness to look for them. To uncover the source of waste, an organization needs to have data that is tracked over time on the key performance indicators that matter to their business. For credit unions, the KPIs where you'll often find the most opportunities for change are the ones that factor in your people. When you measure your loans, net income or members against your number of employees, you'll start to see if your staff has the training and resources they need to be as efficient as possible. Members per Employee can be one of the simplest and most telling KPIs a credit union can learn from.

The Members per Employee Formula

Members per employee is calculated by dividing the number of members by the number of full-time equivalent employees.

Members per Employee = # of Members / # of Full-time Employees

This formula measures the productivity of the credit union’s employee base. Given that human resources costs are typically credit unions’ largest operating expense, this ratio is critical. In theory, a higher ratio means a credit union is more productive, but other factors also play a part. When examining the ratio, credit unions should also consider product penetration rates, members per branch location, the geographic distribution of the membership, and field of membership requirements. The national average as of 2018 was 385. How does your credit union compare?

Strategic factors that impact the ratio include organizational service level goals, growth, and product and technology development. Technology is used to increase efficiency, and automation even more so. For credit unions, the hub of this technological aspect is the core and, if it's working correctly, has the potential to double the national average of members per employee. If your core technology is doing what it was designed to do, your staff totals should be decreasing relative to your membership numbers. 

Member Growth 

If your core technology is effective and supports your credit union's efficiency, then focusing on growth should not be painful or costly. To grow your membership, consider some of these suggestions:

• Reach Out to Younger Members - Credit unions are inherently friendly and helpful organizations and young people that are just beginning their financial lives could truly benefit from the personal touch and investment in membership that CUs offer. By helping these younger folks learn about their options and the impacts their financial decisions can make on their future, your credit union can help build a lifetime member that truly believes in and is dedicated to your organization.
• Build Evangelists - Referrals and the experiences of other people have become one of the greatest marketing tools in recent years. This outreach tactic is fueled by good member experiences, and for credit unions, this focus on people-first service is a tenant making this an ideal way to grow your numbers. If your members value the banking experience you provide, they will sing your praises to others and it costs you nothing. 
• Innovate - No business operates in a vacuum. If members are seeing that they can access other businesses, like their dry cleaner or lunch spot - through a mobile app, they're going to expect their credit union to offer similar functionality. Look at your member data and determine what services and features they are looking for and then seek out the technology that can help you provide it efficiently. Modern core software should provide the data you need to examine, as well as the features they expect you to offer. 

With a combination of smart membership growth initiatives and the right core technology to support that growth, your efficiency ratios will continue to improve. Technology can be a boon to your productivity and help your credit union stay competitive. Learn about the other KPIs you can use in our download.