Commercial Loan Automation
Credit - Small Loans
hiring and retaining commercial bankers
It seems our entire industry is experiencing a dearth of commercial bankers between the ages of 30 and 50. Twenty years of no credit training programs from the large banks coupled with highly specialized lending staff and gravitation toward the hunter/skinner model have yielded an aging Relationship Manager (RM) workforce with little succession and bench strength behind them.
This situation has been aggravated by the industry's reputation crisis. Being a banker isn't on most college graduates' top five list of jobs. As many regional and supercommunity banks resort to reinstituting their own training programs, the number of available candidates continues to shrink. And, even if the right people get hired, they are often lured away by competitors long before they become fully productive.
At our recent Commercial Banking Forum we discussed this issue, and came up with some thoughts to address this industry-wide problem.
- Characteristics of the ideal candidate. Most HR recruiters still look for RM candidates with high GPAs, affable personality and strong math aptitude. But when I ask our Forum attendees what is the typical background of their best rising stars, they mention average GPA, team sports and an entrepreneurial bent. This mismatch has been identified before, but it appears to persist. The most successful RMs are not academically inclined. They are go getters, people who understand the value of collaboration and are self-motivated and driven.
- Personality testing. One way to ensure you recruit the right person is to test their personality and approximate the profile of your best performers. Several testing services are available throughout the industry, from Predictive Index and AQ to Talent+ and Gallop. It has been said, and I agree, that you can train for skill but not for attitude. One can't get a personality transplant. Getting the right person upfront greatly improves the odds of success.
- Training. Many training programs are ill-suited to the younger generations. They are long, tedious and credit-focused. Offer training that has some variety to it, and include a stint at the workout department as well as loan review. Pair your trainees with BDOs to learn how to sell and how to listen and identify client needs. Credit skills are indeed critical, but are often the main focus for way too long.
Further, offer a structured training program with specific and frequent benchmarks to inspire your trainees to achieve. Our typical programs don't have clearly delineated milestones, and the periods for which performance is measured are too long for the audience. Shorten the gap between feedback sessions and your trainees will be more engaged
Last, consider game-ification of some of the curriculum. Learning, especially credit skills, can be tedious. Use phone-based games, contests among trainees and team projects to make it more fun and improve engagement.
- Creating job satisfaction for the right people. Your trainees want to make a difference in the world. They do not realize that banking is the business of making people's dreams come true, of funding small business and creating jobs. It truly is the foundation of the American economy and its success and stability. Explaining this clearly and providing paths to your trainees to help their community become more economically sound are important elements to their job satisfaction and can lead to improved retention.
- Do not dummy down the job. Splitting the hunter and skinner functions to the point of having a BDO-like RM and a skilled credit person and Portfolio Manager (PM) behind them doesn't only fly in the face of true community banking, but it also reduces the perceived impact of true RMs-in-training. Giving the RM the opportunity to fully serve their customers is a win-win all around - for them, for the clients, and for the bank.
- Create longer-term incentives. Consider giving your trainees frequent (such as semi-annual) raises for the first couple of years, and add bonuses or stock that will be paid over 3-5 years. Refreshing such awards annually will create a meaningful enough pot of gold at the end of the period such that competitors will find it too pricey to hire them away. Using hold-backs is another effective way to get there for both new and incumbent RMs.
- Frequent and helpful feedback. Make the time to casually see your trainees frequently, at least monthly, and provide them with feedback, encouragement and learning. They thrive on it, and besides, it is a manager's role to add value to their team.
In the final analysis, you can't keep someone who doesn't want to stay with your organization. But if you hire the right people in the first place, and then nurture them and help them achieve their goals, they will stay with you and be even more productive and profitable then lift-out teams who may not share your credit culture and target markets. Although it is tempting to characterize the younger generation unfavorably, they are the ones who will be taking over our business, and it's important to recruit, train, and retain the right people.