“White Lies” that Drive Low Retention

Recently, an originator asked me for advice about changing lenders. The grievances that the originator had with the current lender centered on three issues:

  1. Failure of the lender to have a consistent follow-up system or CRM to contact the originator’s previous customers and expecting the originator to do it on their own.
  2. Failure to give him an assistant, even though the originator was producing close to $20 million in annual volume.
  3. Compensation and overtime issues versus what others were doing with their originators in the marketplace.

The originator lamented that during the recruiting process, the lender verbally agreed to provide both a CRM system and an assistant. Once the originator was hired and asked about these conditions, the lender denied that they had made these promises. When the originator went to the manager’s boss, the senior manager supported the local manager who was then upset with the originator for speaking to his manager.

Does this sound familiar? Unfortunately, this scenario happens often in mortgage lending. I receive these types of calls frequently and my role is to act as a sounding board to enable these producers to voice their complaints. The reason I am sharing this story is that while common, it is also completely preventable. In my view, if a better process was in place by the recruiting manager and the originator, all the anger and hurt could be avoided.

In our current world of mortgage origination, there is no question that the pressure to hire originators is intense. Crushing competition for sales talent means that encouraging an originator to join another lender is hard work. During the recruiting period, both sides want to present themselves in the best light. Promises are made whether the lender has the deliverables in place or not.

This is further complicated by the fact that companies don’t hire rookies and there is no contingency plan for when originators leave and need to be replaced. As a result, there is always a mad scramble for sales personnel because of the finite number of experienced originators in our industry. Until senior managers decide to invest in rookies, there will be no end to the recruiting wars.

I think that it is inevitable that overpromising and underperforming occurs. Oftentimes, the real working conditions are not shared until after the originator has joined a company. When recruiting is focused entirely on selling the lender as a place to work, an objective evaluation of the candidate and the lender’s work conditions are not adequately addressed. Consider that most written offers don’t cover what support the lender will give to the sales candidate besides the usual verbiage regarding compensation.

When companies don’t get the recruiting process right, new hires may feel duped and angry if the lender did not represent themselves accurately. At some point, these individuals will leave the new firm because their expectations were not met. On the flip side, originators eager to leave their current company don’t listen or ask enough questions to nail down the situation during the recruiting and interviewing process. Because they are so unhappy at their present lender, they don’t want to rock the boat during the interview and figure that things will work out.

Experienced originators need to insist that commitment for lender support is discussed and agreed upon. This can be included in the written offer or emailed so that the new lender and the new employee are on the same page. Failure to do so can set the stage for retention issues down the road.

Isn’t it time to recognize that little “white lies” during the recruiting process can lead to an unhappy originator who will not stay at the new lender when another opportunity arises? Ideally, the recruiting process requires honesty and authenticity from both parties, similar to handling a consumer during the lending process.  Honesty and transparency is how all good relationships flourish.