Hiring: Back To Experience

A new hiring horizon as rates dip

Insider

Contributing Writer

This summer, we have started what we hope is a long-term trend of mortgage rates decreasing. We have been waiting for this trend to start for quite a long time. The industry has endured waves of layoffs, company’s closing, and mergers during this era of higher rates. And with rates easing down, it is expected we will finally start growing again. That is very good news.

While we don’t expect the return of the pandemic induced boom times, we can expect a fairly robust refinance market, especially because rates have stayed higher for longer than we expected. Couple this with the additional detail that homeowners are sitting on a boatload of equity and will be ready to pare down debt or accomplish home improvements — we certainly can be more optimistic about the immediate future. We still have a long way to go, as we don’t expect rates to drop like a lead balloon — but the process has started.

Thus, we come back to the process of hiring. My guess is that there will be a host of “rebound” loan officers available when things get better. Today they may be working selling cars or bartending but like lemmings they will return when the call goes out. What you might want to remember is that these are the loan officers that did not make the cut when we did the cutting. That does not mean that they were not decent loan officers, but no one was getting rid of their cream of the crop when we cut back.

Yet, because they have “experience,” they will most likely move to the top of the list when we are hunting for hires in the future. The question is: are we better off filling our needs with those who were average or less than average within the industry or should we look at those who have the potential to be above average or even top producers?

In this industry, we have a history of hiring experience over potential. Why? Because we don’t have the capacity to train. This fact always brings me back to my own story — several decades ago. I was working for a Congressman on the Hill. What you might consider a prestigious job. Hint: it wasn’t. I played racquetball with someone who owned a real estate company and the president of his mortgage company. They hired me to be a loan officer inside a real estate office. I proceeded to close 600 loans during my first 18 months of closings — including 60 in my 12th month. If they did not know me from the racquetball court, there is no way they would have hired me. They knew nothing about my business acumen, intelligence or other attributes. They just knew I was aggressive on the court. If I had walked into ten mortgage companies and applied, I probably would have struck out because of lack of experience.

I am not suggesting that you hang out on racquetball (or pickleball) courts to recruit potential loan officers. I am suggesting that hiring the best person is a better objective than hiring strictly for experience. I can’t tell you how many times in this industry I have seen a manager hire someone because they had six months of experience — even though they did almost no loans where they came from, which is why they were looking for another job. These hires rarely work out.

Am I suggesting that we ignore the criteria of experience? Quite the opposite. I believe that experience is a key to any hire. But it may not be the same experience you are looking for. What experience is that? Stay tuned, as we will continue this discussion next month!