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credit-union-employee-turnover

Based on an overall turnover rate of 19% and average total compensation of $31,000 per employee, the cost of turnover among Texas, Oklahoma and Arkansas credit unions actually surpassed $68 million in 2013. This startling fact emerged in the most recent Compensation Survey conducted by the Cornerstone Credit Union League.

Now that the survey has quantified this massive financial impact, what can credit unions do to reduce employee turnover? After a review of the relevant literature, we believe a 2013 study appearing in the Journal of Business Economics and Management 1 identifies the factors that will be most effective in helping businesses—including credit unions—to retain employees. The factors are listed below, along with explanations by the study’s authors.

Compensation. “Pay is the main consideration because it provides the tangible rewards for the employees for their services as well as a source for recognition and livelihood. Employee compensation and benefits includes all forms of pay, rewards, bonuses, commissions, leaves, recognition programs, flexible work hours and medical insurance.”

credit-union-employee-satisfactionCareer Opportunity. “Increase in skills and the opportunity to manage their career successfully help to retain employees…It is the responsibility of managers to encourage employees to take responsibility for their own careers, offering continuous assistance in the form of feedback or individual performance and making available information from the company about the organization, career opportunities, positions and vacancies that might be of interest to employees.”

Training and Development. “There is significant statistical evidence to support the positive influence of training and development on commitment…The key consideration in organizing the training development program is to ensure quality and relevance…”

Job Autonomy. This is defined as “the degree to which employees are allowed freedom, independence and discretionary powers when performing their tasks and responsibilities.” The study also notes, “In organizations where job autonomy is high, the workers will view their work outcomes in terms of their own efforts, initiatives and decisions, rather than because of instructions of the supervisor or as the result of procedure.”

Work Life Policies. “Managers must not forget that there is a new attitude towards work and family concerns and responsibility…The days of an individual working for a single company throughout a career have become rare…People are seeking many ways to live that are meaningful and less complicated and this new lifestyle actually has an impact on how an employee must be motivated and managed.”

Get the 2015 Strategic Planning Guide 1 Ahsan, Fie, Foong & Alam. Journal of Business Economics and Management. Volume 14, Issue 5, 2013: pages 903-922.

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