PERSON OF THE WEEK: LO retention and recruiting has taken on new meaning in this second stage of the pandemic, as the mortgage market shifts to a purchase market. Soon, LOs will be playing a more critical role in helping lenders gain market share. That’s why lenders should be focused on retaining their top-performing and most experienced LOs. To learn more, MortgageOrb recently interviewed Joe Welu, founder and CEO of Total Expert.
Q: Why is LO retention more important than ever for lenders?
Welu: According to a survey of nearly 250 lending institutions by The Mortgage Collaborative (TMC), LO retention is the most critically important issue to lending organizations today. And after dealing with sky-high volume for over a year, lenders are bracing for a 40% decrease in origination volume in 2022.
With warm leads at a premium, top-performing LOs will look to their employers for the tools and technology to help them be successful at their jobs. Employers that show they listen to and understand their LOs by delivering that technology will earn their loyalty as they weather next year’s drop in volume.
For example, say one lender asks its LOs to sort through lengthy contact lists for qualified leads. Meanwhile, its competitor provides a steady stream of well-qualified leads directly to their LOs’ pipelines. The latter lender shows its commitment to helping their employees be successful in their business and will be rewarded with better retention rates.
Q: How can lenders retain their top performers in today’s lending environment?
Welu: In this industry, we’re all familiar with one of the key tenets of customer engagement: it’s almost always cheaper to retain an existing customer than it is to acquire a new one. The same applies to our employees: retaining the high performers you already have is easier and more cost-effective than trying to recruit away from a competitor.
In that vein, view LO retention as an extension of your recruitment strategy. When your employees consider a career move, they are essentially weighing multiple job offers. One job they already have — but on which side of the fence is the grass greener?
View your organization through the eyes of your employees, and remember, LO compensation is often a function of their origination volume. Ask yourself the following:
- Do we have modern, effective systems in place?
- Are marketing and sales efforts unified?
- Does the customer receive consistent messaging?
- Do we set our people up for success?
- What advantages do our LOs have over their competition?
- Are we communicating to LOs the connection between our technology and their loan production?
- What do we represent as a company?
- Do we pursue a mission that sets us apart from our industry?
Then, compare your responses to those of your competitors. Do they stack up?
There should be a high level of continuity between your brand and the standard operating procedures within your organization. Your current employees know the realities, good and bad, of your company — and they’re bombarded with highlight reels from your competitors. It’s one thing to mandate your mission statement into every employee’s email signature, but it’s another to ensure everyone lives out your stated mission and values in their day-to-day work.
Similarly, management teams need to walk their talk. If a company consistently describes itself as innovative but operates with outdated systems and a reluctance to take calculated risks while embracing new technologies, it undermines its credibility to current employees. Audit your employee experience in the same way you carefully craft your customer experience.
Q: What are some common LO pain points that could be addressed to help retention?
Welu: To balance multiple relationships with different customers, LOs are often required to swivel between various devices and logins, which makes it easy for missed connections to fall through the cracks.
By integrating disparate systems into one platform, lenders can set up their LOs for success by developing a single source of truth with a complete view of each customer. From there, LOs can focus on high-priority tasks and follow-ups while humanizing critical communications at key touchpoints. Or, in other words, focusing on what they do best: building real relationships with their customers.
That’s a common theme when it comes to LO retention: outsourcing, automating, or assisting your employees with the everyday tasks that prevent them from focusing fully on the most critical aspects of their jobs. With the capacity to automate marketing to existing prospects, referral partners, and previous customers, LOs can sit back and manage new leads as they hit their inbox.
Q: How can I develop a LO retention strategy?
Welu: In mortgage, we’re obsessed with the customer experience, but the employee experience is equally as important. Remember that compensation packages are only one aspect of their experiences — and by focusing primarily on dollar signs, you’ll build a culture rooted in instant gratification (rather than long-term success and sustainability) of “basis point chasers” eager to jump ship at the next best opportunity.
Employee retention strategy should focus on solving pain points within their day-to-day lives. The lenders that set their LOs up for success by solving their problems, outsourcing tasks they don’t want to do, and positioning them to win more business, will be the ones that keep hold of their best employees (and attract new ones by word-of-mouth).
Survey existing staff members on what your company does well, and what you could do better. Positioned between customers and lenders, LOs serve as the “humans in the middle” throughout complex financial transactions. By uncovering areas of improvement at your organization, you can empower them to provide modernized outreach while maintaining a human connection during the origination process — and beyond.
Q: I already have the latest and greatest technology — why would my LOs still leave?
Welu: According to research from the STRATMOR Group, lenders are quick to buy and install new technology, especially since the pandemic began, but they’re slower at fostering adoption and seeing a full ROI. During a time when retail lenders are spending double per loan on technology than they were five years ago, lenders should ensure that new tech delivers its return on investment. They should ensure new technology:
- Integrates with existing platforms and processes
- Can be deployed by an effective (internal and external) implementation team
- Solves real pain points (uncovered in their employee – and LO – experience audits)
Without effective implementation teams, easy integrations into existing systems, and quick, easily identifiable improvements to employee experiences, technology spend can simply add another grievance to unhappy employees’ work lives. When asked to adopt a new system, employees should know how it will help them be more productive in their jobs. If they don’t, adoption rates will suffer, desired ROIs won’t be achieved, and employees will continue to manage the same problems they had before.
The challenge of implementation is the reason platforms like Total Expert are disruptive in the financial services industry. Normally, with generic CRM and customer engagement platforms, the build and implement phase can take years. Platforms built already for mortgage lenders, on the other hand, provide customers an accelerated timeline and ease in reaching ROI for LOs and for the overall company. Quick time to value drives early success for our customers, which results in snowballing returns with each passing year.