Employee retention matters more than ever for credit unions
The financial services industry is facing an unprecedented staffing challenge. With competition for talent intensifying and turnover costs mounting, keeping your best employees has become a strategic imperative rather than just an HR concern. They don't call it the war for talent for no reason.
The true cost of employee turnover
When an employee leaves, the financial impact extends far beyond the cost of recruiting and training a replacement. Credit unions face direct costs like job postings, background checks, and onboarding time, but the indirect costs can be even more substantial.
Member relationships suffer when experienced staff depart, institutional knowledge walks out the door, and remaining team members experience increased workloads that can lead to burnout and further turnover.
Industry research suggests that replacing an employee can cost anywhere from 50 to 200% of their annual salary, depending on the role's complexity and seniority. For credit unions operating on tight margins, these costs can significantly impact the bottom line, depending on the role's complexity and seniority. For credit unions operating on tight margins, these costs can significantly impact the bottom line.
The numbers game
Understanding why employees choose to remain with an organization is the first step in building an effective retention strategy. The credit union movement and people-helping-people mission play a unique role in the passion employees feel for their jobs. However, the bottom line is, the paycheck is still critical.
About 93% of credit unions with assets of $1 million or more budgeted to provide salary or wage increases to at least some of their employees in 2025, according to the 2025 Compensation Resources Report. Staying competitive reassures employees that their value is seen and understood.
The information is out there. A resource for credit unions for 30 years, more than 800 credit unions shared their compensation data to inform the industry on how credit unions compare, not just in salaries, but benefits packages, staffing levels, and turnover. The Compensation Resources report covers 90 different job titles and enables credit unions to make data-driven decisions on compensation and remain competitive in the industry.
What drives employees to stay
While competitive compensation remains important, it's rarely the only factor in an employee's decision to stay or leave.
Career development opportunities: Employees want to see a future with your credit union. Clear paths for advancement, cross-training opportunities, and support for professional certifications and designations demonstrate your investment in their growth.
Workplace culture: A positive, inclusive culture where employees feel valued and respected creates strong emotional connections to the organization. This includes everything from recognition programs to creating space for employee-led communities to how leadership communicates during challenging times.
Work-life balance: Flexible scheduling, remote work options where feasible, and generous paid time off policies show employees that you respect their lives outside of work.
Meaningful work: The credit union difference and how credit unions approach member experience put credit unions at an advantage. Ensuring your team understands how their work supports members and strengthens the community will help them understand purpose in their roles.
Practical strategies for improving retention
These are all great ideas that feel simple in concept, but putting them into practice is another story. To begin with, do not focus on going all in at once. Instead, look at what will be the easiest lift or make the biggest impact for your team. Here are some starting points that can have big returns in improved retention.
Invest in onboarding: First impressions matter. A structured onboarding program that extends beyond the first week helps new employees feel welcomed, prepared, and connected to your mission.
Conduct stay interviews: Don't wait for exit interviews to learn why employees might leave. Regular conversations about what's working and what could improve give you the chance to address concerns before they become deal-breakers.
Offer competitive total compensation: Review your compensation packages regularly to ensure they're market-competitive. Remember that total compensation includes benefits, retirement contributions, and other perks beyond base salary.
Create mentorship programs: Pairing newer employees with experienced staff members builds relationships, transfers knowledge, and helps employees feel more integrated into your organization.
Recognize and reward performance: Regular, meaningful recognition reinforces positive behaviors and shows employees their contributions are noticed and appreciated.
Provide learning and development: Offer training opportunities, conference attendance, and educational reimbursement to help employees grow their skills and advance their careers.
There are plenty of ways and places to access opportunities for your team. America's Credit Unions has opportunities for training and conferences specifically designed for every role in credit unions.
Measure what matters: Track metrics like voluntary turnover rate, average tenure, and time-to-fill for open positions. Survey employees regularly about job satisfaction and engagement. Most importantly, analyze exit interview data to identify patterns and areas for improvement.
Creating a workplace that matters
Employee retention isn't about implementing a single program or policy. It requires an ongoing commitment to creating a workplace where people want to build their careers. The cooperative model is a powerful foundation and starting point. When employees see leadership investing in their success and well-being, they're more likely to invest their talents and loyalty in return.
To thrive in the credit union industry, credit unions need to recognize their employees as their most valuable asset and act accordingly.