TheMReport

28 | TH E M R EP O RT FEATURE ers have attempted to manage the complexity of compensa- tion using the standard fall- back of an Excel spreadsheet, a risky solution according to Dudley Strawn, EVP of Hu- man Resources at Dallas-based PrimeLending. "Mortgage compensation is complex," Strawn says. "If you're trying to manage your commis - sion accounting process with spreadsheets, you're going to make mistakes." PrimeLending has taken great pains to ensure it maintains compliance with all federal com - pensation rules. Yet, that hasn't prevented PrimeLending from offering their LOs and other staff flexibility regarding compensation. "There are a lot of different types of compensation plans out there, but what we try to do is focus more on structure because as long as our structure is sound, we know we're going to be compliant. If we're consistent in how we're paying, then the plans can be more individual or market driven to serve our business needs," Strawn added. What has helped PrimeLending manage the breadth of com - pensation plans it maintains is automation. Prior to automating management of its compensation plans, PrimeLending's commission team was responsible for review - ing and administrating compensa- tion calculations and reports each pay period, often spending late nights and weekends at the office to ensure employees were being paid correctly. Not only has automation improved the quality of life for PrimeLending's commission team by simplifying compensation oversight, it has also provided additional benefits in the form of efficiency and transparency—two areas in which lenders are always striving to improve. "Automating the compensation process has ensured better results for PrimeLending by enabling us to be more consistent and paying people right the first time," Strawn explained. "It has also saved us tremendous amounts of time by giving our sales force and branch managers access to compensation information so that we don't have to manually dis - tribute commission reports. Now our sales force has full transpar- ency into how they're going to be paid at any given time. They can access our compensation system and see where they're trending from a commission perspective virtually in real time." PrimeLending isn't the only lender that has benefited from utilizing an automated platform to manage its compensation schemes. For Houston-based Envoy Mortgage, the ability to manage its various compensation plans has been crucial as the company has grown over the past few years. With more than 1,500 employ - ees and originators licensed in 49 states, Envoy has seen first-hand the impact of flexibility in com- pensation on the ability to remain competitive in the market. "Across the country, there are different price points. You've got your rural areas and your metro- politan areas, and the compensa- tion plans could be quite different for each of these areas," said Kris Benson, Vice President of Human Resources at Envoy Mortgage. "There are also certain pockets of the country where we have to pay a higher commission in order to be competitive within that certain area, so we must have the flexibility to be competitive with other mortgage companies, but we also have to ensure that we remain in compliance." At Envoy, prior to automating compensation management (and pre-Dodd-Frank), branch manag- ers were responsible for manually reporting monthly commissions to the corporate payroll/HR department, making it difficult at times to get that information in a timely manner to ensure LOs were paid accurately. Now that Envoy has automated its compensation management, communication between branch offices and the payroll depart - ment has improved significantly, eliminating errors regarding compensation and bonuses. In addition, all Envoy employees must use the automated system to confirm their compensation plan, providing Envoy with a defini- tive record of the compensation paid on any given loan—a benefit Benson says is invaluable from an audit perspective. Automation has also helped Envoy manage the differences in compensation across its retail and correspondent channels. LOs in Envoy's correspondent division are paid commissions on volume and performance metrics, whereas, on the retail side, Envoy pays its LOs an upfront draw based on an hourly wage and recoups that draw from commissions earned. Not only does Envoy's compensa - tion platform help payroll staff keep track of each retail LOs draw balance, but it also provides employees access to this same in- formation, providing full transpar- ency into compensation. In addition, Benson's staff con- ducts an hour-long training session each month for managers and staff on Envoy's compensation manage- ment system to ensure everyone is familiar with the compensa- tion system and can access their comp plan information at any given time. Branch and regional managers are also trained on how to pull reports from the com - pensation system to complete the monthly profit-and-loss statement for their individual branch. "We're trying to automate every- thing so that there's less chance for human error and to make my staff as productive as possible— that's our goal," Benson said. Ultimately, for lenders like PrimeLending and Envoy Mortgage, automating compensa - tion management allows these organizations to remain flexible in the face of increased competi- tion for top talent while also staying in compliance with federal labor and compensation rules. Furthermore, eschewing the "management by spreadsheet" methodology eliminates much of the risk and headache of com - pensation management, enabling lenders to maintain compliant oversight of their various com - pensation schemes no matter how large they grow. More money, fewer problems— that's a sentiment a lot of lenders can get behind. LORI BREWER is President and Founder at Macon, Georgia-based LBA Ware™, provider of the CompenSafe™ automated compensation management system. She can be reached at lori.brewer@ lbaware.com. "We're trying to automate everything so that there's less chance for human error and to make my staff as productive as possible– that's our goal." —Kris Benson, Vice President of Human Resources, Envoy Mortgage.

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