Next week, I am speaking at the Calyx Software conference on how to recruit and retain Millennials. While preparing for this session, it struck me that while Gen Y is the most talked about generation, not much is really happening at the ground level to attract these individuals to mortgage banking outside of Quicken’s efforts.
There is no question that this is a difficult topic for companies because recruiting rookies will require a large investment and significant structural changes in sales organizations. At the same time, companies are facing major technology investments and a more difficult purchase money marketplace on top of lower volumes. But the reality is that in less than 2,600 days, the Millennials will compose 75% of the workforce and they view their careers very differently than Baby Boomers which could spell trouble for mortgage companies.
Let’s start with what really motivates Millennials in choosing a career. According to LinkedIn’s research, there are three important issues for them:
- Financial security (comp package)
- Professional development
- Opportunities for advancement
Financial security is not a surprising issue since many Gen Ys grew up during the Great Recession and witnessed their parent’s financial problems first-hand. A 100% commission structure may work in a refinance-driven marketplace, but in a purchase money market this is problematic and not an attractive option, especially considering that many Gen Ys have racked up significant student loan debt. This requires companies to rethink the pay structure in mortgage banking.
Professional development is another challenge for mortgage companies for a number of reasons. At many firms, professional development is often defined as an annual sales rally with a motivational speaker but the rest of the year, originators are left on their own except for product and technology training. Selling is complex and requires consistent training to master it. A once a year effort is not enough to make a difference in sales results. Similarly, tasking producing managers with cultivating professional development in their originators is a scenario that doesn’t work. Learning new sales behaviors requires ongoing, targeted training.
In my opinion, opportunities for advancement is the biggest challenge for mortgage banking companies. Our industry has slotted people into specific career paths that rarely deviate. Once an individual is a loan officer, the chances of moving into something else is slim unless he or she is recruited by another firm and given a manager’s title. Typically, the individual hasn’t been trained to be a manager nor do they necessarily have the right competencies to be a good manager. The quality of front-line managers is critical because they drive improved productivity. Without a career path where employees are invested in and developed, mortgage firms will not be an attractive landing place for Gen Y.
Time is running out for companies to determine how they will attract a new generation of mortgage bankers. If mortgage firms want to have a viable sales force in the future, preparation must begin today!