Recruiting & Retaining LOs

BY GREG SAYEGH

The key to success for lenders in any market phase is profitability & relevant loan officers are the key to profitability. Effective hiring that enhances your bottom line requires looking beyond traditionally used indicators to find & retain loan officers that align with how you do business.

The lending industry has seen annual turnover of over 35 percent in recent years. This is not sustainable. Companies must find ways to find & connect with best-fit candidates, achieve greater effciency in the recruiting process & increase retention.

It all starts with accurate data & detailed loan officer assessment criteria. The ability to predict productivity boosts return on investment due to greater effciency, leads to less turnover and enhances your company reputation as an employer of choice.

Past performance is the best indicator of future performance, and a candidate’s historical performance is a window into their potential future contribution. “Performance” includes more than just volume. Other important considerations are an LO’s product mix, the ratio of purchase vs refinance business, percentage of past client referral relationships, referral partnerships, and how a candidate’s volume compares to market trends. InGenius data shows that 90 percent of the volume is closed by the top 50 percent of loan officers. The question becomes, do you want to hire from the top of the food chain or the bottom?

Beyond the resume, it is essential to assess how a candidate’s experience aligns with your company culture & job expectations. All recruiting decisions should take the following into consideration: How frequently has this loan officer changed companies to chase a deal or better officer?

If they’ve made a move from one category to another – such as from a call center to an external position, a bank to an IMB or vice versa – how well did they do after the change?

What’s their overall success history? The answers to these questions provide great insight as to whether a candidate is likely to maintain & grow their business when they join you & contribute to the culture of your organization – or disrupt it.

Making hiring decisions based on loan volume only is problematic. Effective interviewing techniques are crucial for identifying positive behavioral patterns & potential red flags. Structured interviews that probe into past experiences can reveal a candidate’s problem-solving abilities, teamwork, leadership qualities & other soft skills vital for the role. Bottom line – will their ‘likely’ behaviors enhance or degrade your brand?

Finally, once the data has helped you uncover candidates, you must incorporate an unbiased, standardized, profiling personality tool to use for all candidates. Such tools can provide deep insights into a person’s work style, motivation & interpersonal skills. This objective measure helps ensure a fair & equal assessment process for all candidates, as well as another dimension of insight into the probability of a successful, long-term tenure.

Reviewing these four components – historical performance, experience alignment, behavioral interviewing & personality profiling – and integrating them into your recruiting process creates a robust framework for new hire assessment that can be reviewed & tested against the current hiring paradigm. In times of decreased volume & compressed margins, accurate data combined with this solid recruiting process will decrease your margin of error.

The steps outlined here are sound & literal. But there's a critical figurative aspect to achieving desired outcomes that can decide the success or failure of the entire loan officer hiring process:

While reviewing past performance is an important starting point, it's important that decision makers don't select candidates based on dollar volume alone.

Before embarking on the loan officer assessment journey, leaders must set the vision for the company's mission & values, and define the type of candidates that will advance their companies' unique goals. Look at your current team & identify elements in background, experience & production to help you formulate a profile of the candidates that match your organization's strengths in the areas of product mix, geography & demographics, and culture.

It’s unrealistic to expect that every hire meets 100 percent of your profile’s criteria. But following a defined assessment process will illuminate the factors that you should evaluate on a deeper level to drive your hiring decisions & process.

Greg Sayegh has been a senior executive in the mortgage production industry for 35 years. InGenius is a growth multiplier for the lending industry, delivering leading edge, proprietary data in the areas of mortgage loan o cer & broker recruiting, CRA compliance & Fair Lending, and RE agent relationships & analytics.