Banking New England Jan/Feb 2016

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A CRISIS OF OUR OWN MAKING?

Solution to the Credit Analyst Shortage Could Be Easier Than We Think BY NEIL BERDIEV

Neil Berdiev is managing partner and co-founder of DNB Advisory LLC, a Bostonbased advisory firm. He is a career commercial banker gone entrepreneur, a credit guy with passion for business development. He may be reached at dnb@dnbAdvisory. com or at 617-233-1405.

O

ver the last decade the message from commercial banks across the country has been quite consistent – there is a shortage of experienced credit analysts, and the job of a credit analyst is a revolving door. But there are some signs that the shortage may be artificial and self-inflicted. One of the primary indicators is a poorly-thought-out approach to the positioning of the role with recruits and employees. The career pathing of a credit analyst is an afterthought in many respects: from the career progression and talent pipeline, employee retention, how teams are designed and staffed, the creation of underwriting processes and workflow management. For a newly minted credit analyst, the goal is clear – get out of the role as quickly as possible. Here are the key contributions to the credit analyst shortage.

Elimination of Credit Training Programs

The most obvious explanation for the lack of experienced credit analysts is a gradual elimination of credit training programs and severe reduction 22 BANKING NEW ENGLAND

in training and development budgets. Commercial banks compensate for the lack of formal, structured credit training by signing up analysts for individual courses and informal, on-the-job training and coaching – and of course, the time-honored tradition of stealing more experienced analysts from competitors. For smaller banks, one-off classes and on the job training are the primary methods of training credit analysts. It’s been made to work, but the quality of the “final product” in the form of a well-trained credit professional varies widely, even on the same team. However, lack of training and development is only a part of the problem.

Recruiting Efforts and Messages Promote Turnover

For many years, the job of a credit analyst and subsequent steps has been positioned as a means to an end, with the end being the role of a relationship manager. Prospective applicants and certainly existing analysts know that moving onto the relationship and business development side offers considerably more money, sales incentive compensation, more growth opportunities internally, broader employment opportunities