In a recent article from The MReport, mortgage managers discussed their strategies for selecting and retaining new hires. While many managers easily evaluated sales candidates based on production reports, they often had difficulty trying to assess an originator’s people skills.
To help them finalize a hiring decision, managers said they frequently relied on how well the candidate interviewed and whether they’d worked with the salesperson before.
Unfortunately, interview performance is not a reliable indicator of whether a sales candidate will succeed in the originator position. Research shows that interview performance accurately predicts job success only 14% of the time.
Of course, most mortgage managers are well aware of the high cost of hiring the wrong person. A single poor hiring decision can impact sales organizations in a number of ways, from creating a toxic work environment and delivering a sub-par customer experience to lost revenue. That’s why it is so essential for managers to get hiring right!
Hiring in 2022
Hiring is on everyone’s mind because with lower refinance volume forecast for 2022, growth will be challenging in the coming months. In my view, lenders have two choices: hire using the same old methods depending on production reports and how candidates interview OR move to a more scientific-based approach that analyzes a candidate’s innate characteristics and behaviors to ensure a better match.
If you’ve been in the industry for any length of time, you’ve hired at least one salesperson who aced the interview and met production benchmarks – on paper – but failed to perform past the onboarding process.
During my management career, I certainly hired my fair share of candidates who talked a good game and worked for well-known banks but couldn’t sell if their life depended on it.
This exact scenario is why I’ve been involved with research-based pre-hire assessments for the past 20+ years. When I started my consulting practice, it was important to me to partner with industrial psychologists who were scientists using data-driven analysis to help take the guesswork out of hiring.
Can Scientists Predict a Candidate’s Sales Success?
So, can scientists really predict whether a candidate has what it takes to sell? The simple answer is “Yes!” Sales success predictions are not always 100% right but they are significantly more accurate than relying on interviews and past sales performance.
With a pre-hire assessment, managers still have to interview but having an analysis that identifies a candidate’s strengths and weaknesses, and predicts sales success is worth its weight in gold.
For lenders that recognize the quality of their salespeople is critical for long-term success, investing the time and money to get the hiring process right is a no-brainer.
It still amazes me how many lenders, large and small, resist using employee selection tools that could greatly improve their hiring results and their revenue. Some managers are reluctant to use an assessment if the candidate is a top producer. Others say, “It’s too hard to recruit and I don’t want to add any more hurdles to the process.”
If senior managers truly believe that who they hire matters, there’s no reason not to adopt a more scientific approach to assess a candidate’s job and organizational fit.
Not All Assessments are Equal
While hiring assessments have been around since World War II, it can be confusing to differentiate one vendor from the next. The bottom line is that the assessment must be job-relevant and normative, namely, it should match to the specific position that it is measuring. Vendors should provide data that the assessment does what it says it does. Proof is in the validation study. DISC instruments do not meet this high standard because the research these tools are based on is generalized and not job-specific.
A reputable vendor will gladly provide their validation research to a lender.
Validated assessments provide two significant advantages for companies:
- They improve legal defensibility because they are relevant to a specific position.
- They remove unconscious bias from the hiring process. No longer does a lender have to worry whether a branch manager conducted a biased interview. Employment testing standardizes the evaluation.
Think about it like this: Would you make a loan to a home buyer without a credit score or a tri-merge credit report? No, you wouldn’t, even if the borrower was someone you knew. The same sentiment should apply when hiring loan officers – the people responsible for driving revenue and creating long-term success for your lender. It is time to adopt a more advanced analysis and level up your hiring process.