The Keys to Reducing Originator Turnover

Congratulations to the Denver Broncos on winning Super Bowl 50 and Peyton Manning — a class act. Now, on to the world of mortgage banking.

A recent Stratmor report on originator tenure revealed that almost 40% of producers have less than one year with their lenders. While this is not surprising to me since I am at companies performing sales audits, the ramification of this turnover rate is gut-wrenching for companies and their customers. A constant churn of talent has far-reaching consequences for mortgage lenders and their ability to deliver an exceptional customer experience.

In other times, this percentage of new originators might be an indicator of growth and expansion but Stratmor’s lender study noted that this was more of a turnover issue due to originators leaving for involuntary or voluntary reasons. Involuntary turnover is when the company terminates an originator because of poor performance. Voluntary turnover is when the employee leaves for another lender. Regardless of the reason, when an originator leaves a company, the result is increased expenses associated with filling the vacancy and getting the new employee up to speed.

When a producer leaves voluntarily, it is easy to rationalize that “the employee left for more money and we need to change our compensation plans.” In research conducted by the Saratoga Institute, a world leader in third-party exit interviewing and employment commitment, “89 percent of managers believe that most employees are pulled away by better pay. Yet, in 86 percent of voluntary turnovers, something besides money is the root cause. The disconnect between belief and reality allows managers to deny responsibility for correcting and preventing the root causes of employee disengagement.” The Saratoga Institute lists as seven root causes of voluntary turnover:

• The job or workplace was not as expected.

• There is a mismatch between the job and the person.

• There is too little coaching and feedback.

• There are too few growth and advancement opportunities.

• Workers feel devalued and unrecognized.

• Workers suffer from work-life imbalance.

• There is a loss of trust and confidence in senior leaders.

As evident in Saratoga’s findings, the importance of the first-line manager cannot be overstated in reducing originator turnover. As we move into a more challenging environment, the key question all senior leaders need to be answering is: Do you have the right people in the manager’s role in 2016?