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Everyone is sick of the pandemic (pun intended). More specifically, everyone is sick of the adjustments they’ve had to make to their personal and professional lives. Professional lives have indeed shifted. Whether your workforce is at home every day or not, it’s been over a year since you attended a conference in person, or your alcohol consumption has increased due to “Zoom Fatigue.” One area that certainly has changed, in some ways for the better and some ways not, is in the hiring of new staff. What are managers saying and doing, and what is STRATMOR observing with its clients?
First, during the last 12 months, thanks in large part to new technology (namely meeting software such as Zoom and Teams), recruiting new staff did not come to a halt as many had feared it would. In the past, owners and recruiters would travel to the city where they wanted to open a branch and meet new market leaders and their teams. Those companies hiring are now able to do so virtually and still meet eye to eye and share ideas over the internet, never leaving the comfort of their homes while continuing to add new markets.
And people are still changing jobs in 2020 and into 2021. Mortgage Loan Originators (MLOs) working for companies still become disgruntled with operational inefficiency resulting in delays in underwriting, pricing problems or overlays, a lender being too big or too small, layers of management, or a shift in culture.
Production has always been about the right people, pandemic or not. Adding production staff is easier to do in states where a lender is licensed, but most shops are open to talking to those in other states and starting the licensing process. And often those in sales come to a vendor or lender through word of mouth. Turnover is watched, as no lender wants to be known for “renting LOs.”
On the operations side of the org chart, those hiring in 2020 have seen much success recruiting outside of a lender’s footprint. A talented underwriter can be two miles from your corporate office or two thousand miles away. For many lenders, returning to the corporate office won’t be mandatory. There is more talent beyond a commute’s distance to a branch or headquarters, and ops staff may be less expensive outside of an existing footprint.
Anecdotally, the best recruiting source for operations comes from word-of-mouth referrals through a lender’s existing staff of sales and operations. Managers believe that retention and quality results on those hires are vastly superior. Lenders have been forced to offer increased hiring bonuses and employee referral pay outs for talent due to the competitive recruiting environment.
What does hiring in 2021 have in store for lenders? According to data from STRATMOR Group’s recent Operations Workshops, lenders are increasingly turning to recruiters to find qualified operations staff, along with hiring college grads and motivated, non-mortgage people interested in entering the residential lending.
On the production side, lenders are trying their best to shift to recruiting MLOs who are more purchase oriented. Sign on bonuses have quieted down, or are only used to cover the first month’s salary or insurance benefits. As pipelines level off or shrink, producers don’t have a huge pipeline to leave behind and may be more open to a move. Tactics for “mature” regions vary from new regions: Sales hires in a lender or vendor’s mature regions are opportunistic and/or are backfilling positions that are vacated. For new regions sales managers and internal recruiters work hand-in-hand. Seasoned outside AEs, who can bring relationships with them, are at a premium. In 2021 the MLO production mix could prove to be a make-or-break condition, in that the refi versus purchase mix is very important. But still, “Will the person fit?”
As for entry level operations opportunities, those only really reside in loan set up which more and more is being shifted offshore. STRATMOR found that clients are trying to establish introduction positions, such as “support specialists” or “file set-up” to bring in non-mortgage personnel and doing their best to promote from within.
For recruiters, as we return to some semblance of “new normal,” many foresee business travel as “when essential” only. As we move through 2021 and beyond, owners and managers plan on using technology more and more to continue enhancing their recruitment strategy. Don’t want to fly to Anchorage to meet a promising underwriter? Do a Zoom call this afternoon?
Regardless of the pandemic, recruitment focus will change as volumes and changes in the industry dictate. Anyone with more than a couple years under their belt know that residential lenders are always in a state of either too many loans, or not enough loans. With the pandemic we saw record low rates and corresponding high volume leading to high demand for operational staffing levels. Companies were desperate for staffing, and paid record level salaries, retention and signing bonuses, overtime, and production bonuses. Transition income usually required up to three months to cover a dip in income for originators.
Many hiring managers believe that the biggest difference in recruiting is the use of video, and that will continue in 2021. Recruitment is a relationship building process. Virtual meetings enable relationship building more quickly and with a broader set of team members in the hiring company and the originator. Further, virtual meetings will be combined with the meeting world, opening up where parties can again network and attend in-person educational and marketing events. There is certainly pent-up demand for these events, and recruiters will be using them to get “top-of-the-funnel” recruits engaged and then use phone and meeting software to continue to move the candidates through.
With the economy recovering, and rates pressured to creep higher, we will see a slowdown in production. The focus will quickly turn to sales recruiting and we will see nervousness in operational staff about the stability of their jobs. Sales recruiting will continue to be competitive with bonuses and guarantees at record levels as the industry players strive to keep their sales levels up and have money to spend. But unfortunately little of this bodes well for bringing pure new talent into the industry. We can expect to see the increased hiring of “permanent remote” employees due to the realities of the pandemic and as we’ve realized people can be just as productive, if not more so, working from home.
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