Why Rookie Training Programs Driven by Producing Branch Managers Don’t Work

There is no question that an aging sales workforce is a top concern for many in the mortgage industry. The numbers are frightening when you consider that the average age of mortgage sales professionals is from the late 40s to early 50s. At this point, it is clear that experienced mortgage bankers (25+ years) far outnumber Millennial sales professionals — a trend that doesn’t bode well for the future of our industry.

The lack of younger workers has obvious negative consequences for long-term growth plans at banks and independent bankers. As I mentioned in a previous post, in less than 2,600 days, Gen Y will make up 75% of the workforce and yet mortgage bankers are hesitant or unwilling to make the investment needed to hire and train them. The issues that I see are structural from 100% commission pay plans to expecting producing managers to drive the program.

I frequently receive calls from mortgage executives about their annual sales rallies where they want to convince branch managers why they should hire rookies. In my opinion, pushing this critical task down to the branch level is a fatal strategy.

When companies with branch sales organizations expect managers to produce their own volume as well as recruit and train rookies, the outcome is rarely successful. Branch managers in their mid-50s are often preoccupied with maintaining their current income and lifestyle vs. growing the business. Frankly, rookies are not something that they are even interested in spending their time on. Companies know this but they still want the local branch to absorb the costs and devote the time to rookies. It is wishful thinking that producing managers will be motivated to do so.

It is interesting to me that corporate management teams see their role as making investment decisions mostly on back-end issues such as technological improvements. Technology is definitely important because speed matters today but as we move into a period that is projected to be mostly purchase money, the industry’s success will be based on more than just “cool” technology. Investment in the sales workforce is essential for these individuals are the key drivers in creating loan demand. Today, originators get one shot at a potential customer compared to multiple contact points during the buyer’s journey. That’s why company’s need to have the best salespeople on the front lines. This requires an ongoing commitment to training and development.

Since a purchase money market is mostly driven by first-time home buyers (Gen Y consumers), it seems obvious to me that the mortgage industry should have sales professionals with the skills to match current marketplace needs. To shift the prevalence of retirement-minded Baby Boomer sales professionals, companies need to recognize that it is their responsibility to recruit rookies and invest in them. Expecting branch managers to lead this effort just doesn’t make sense nor does it work consistently enough to make a real difference in a company’s sales results. In many ways, putting a rookie program in place should be prioritized in the same way as buying a CRM system.

Isn’t it time that senior management teams address this effort at the corporate level instead of pushing it down to branch managers? Producing managers have enough on their plates in a rising interest rate environment.