February 2014

TheMReport — News and strategies for the evolving mortgage marketplace.

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Th e M Rep o RT | 29 Feature swing as much as 30 percent in less than a year's time," said Michael Baker, director of busi- ness development at Sutherland Global Services. "That volatility presents execution risk and added costs as lenders struggle to staff or are faced with excess capacity." Gillian at GES offered his market-based perspective: "I think the focus should be on where the financing is coming from. Projects are starting to break ground all over the U.S., but the financing is coming in from abroad and not from our own banks. Until that changes, the growth on this side of the real estate industry will continue to drag." The bank behemoths must resort to layoffs to react to lulls in market activity, but what about other mortgage players? "It is difficult to predict whether small companies will remain small or pursue a mergers and acquisitions strategy to strengthen market share," Blake said. "Regardless, there are risks to dramatically increasing employee workload." Rising employee turnover and a weakened company culture are problems that could strike at a financial institution's overall brand. Rather than "hire and fire" based on the ups and downs of an eco- nomic cycle, mortgage companies are favoring alternate workforce strategies, including outsourcing or leveraging temporary labor forces. "Outsource providers can provide companies with a variable cost structure and often a lower cost structure through the use of a 'right shore' approach, a model using both onshore and offshore resources," Adkisson said. "In ad- dition, when using temporary or contract labor, it allows companies to employ a 'try before you buy' model for talent." Cost reduction, best practices optimization, collaboration, and the creation of an incubator for process innovation are all advantages to business process outsourcing in the mortgage industry, but it is not without its own set of challenges. "It is important for companies to identify an outsourcing partner who invests significant efforts to get as close as possible to the customer's business culture," said Ramachandran Ariyur, SVP at SLK Global. "This has been identified as one of the major reasons for several engagement failures, and it is necessary that conscious attempts are made by the BPO vendor to mitigate this risk. Companies need to identify BPO partners that show immense initiative, implemented and controlled by senior management, to drive the customer culture into the operating teams that work for the customer." There are also strategies for mortgage companies to help balance and reallocate work- load "in a way that minimizes backlash from employees," Blake said. "Cross training can help employees gain new skills and keep them on a growth trajectory while allowing a business to pull resources from a low-volume part of the mortgage operation to a high-volume department, leverag- ing capacity management tools and true load balancing to share the workload." Of course, good ol' technol- ogy can be used to achieve greater process efficiencies, thus alleviating workload pressures from mortgage employees. Also, outsourcing some of the more resource-intensive tasks can not only provide more efficient cost structures, as Adkisson men- tioned, but also gives mortgage companies the agility to react to sudden twists and turns in the fast-paced marketplace. And what of the marketplace? "With refinancing at an all- time low and the pure difficulty in financing, whether you're buying a home or applying for a construction loan, I wouldn't expect to see hiring tick up in this sector anytime soon," Gillian said. "Firms will, more than likely, continue to keep the workloads heavy on existing staff, until they find a way to sell new formats of mortgages and refis and make it somewhat easier on the consumer." Methods and Strategies S ocial media platforms, such as LinkedIn and Twitter, are also popular recruiting chan- nels in the mortgage industry. In addition to talent sourcing, these outlets can be used for employee referrals, recruitment marketing, and employee brand maintenance. "The key to using social media for talent acquisition, to use marketing dollars most effectively, is targeting specific populations or groups, rather than casting a wide net," Adkisson said. "Social media enables active recruiting as well as maintains connectivity with pas- sive job seekers." "Mortgage companies turn to their HR departments, which have a tendency to rely on social net- working and job boards," Gillian countered. "Those that hire the best talent utilize their real person- al networks first. When you call a recruiting shop, I recommend finding out how well known the shop is and what type of clients they actually serve." Number crunching for boosting employee counts is another criti- cal facet for mortgage companies. "Enhanced recruitment analytics" with regard to historical data will allow an HR director to predict how long it will take to fill an open position. "We have seen a reduction by 20 to 25 percent in hiring cycle times," Adkisson said. "Once tal- ent is recruited and on-boarded, a key element of retention is providing employees with clearly defined career paths and incen- tives aligned with individual and business unit or corporate goals." Targeting new graduates, internal mentoring programs for proper staff development, and even a "buddy system," which pairs new recruits with seasoned veterans, can make a big dif- ference in hiring and retaining quality staff. "Mentoring across departmental lines helps the new recruit ramp up faster and get a better grasp of the complexity of the profession and company's internal structure," Blake said. "The 'buddy' helps the new employee develop professional relationships and reduces the learning curve that all people experience in a technical field, especially mortgage technology. By pairing the recruit with someone other than his or her boss, that staff member is more likely to open up and ask the questions he or she perhaps wouldn't feel comfortable asking otherwise." Also, the Mortgage Bankers Association offers specialized educational courses, and its train- ing program educates staff mem- bers on the nuances of working in today's volatile market. "We find that the more we invest in training up front, the higher the "once talent is recruited and on- boarded, a key element of retention is providing employees with clearly defined career paths and incentives aligned with individual and business unit or corporate goals." —Kelly M. Adkisson, Accenture Credit Services

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