Unveiling the Power of Analytics in Talent Acquisition: Heidi Iverson from MMI

Heidi Iverson is Vice President of Strategic Partnerships at Mobility Market Intelligence (MMI).

It is a truth universally acknowledged that lenders’ resiliency depends on their producing talent. However, in an industry where the competition for top talent is fierce and the stakes are high, a data-driven strategy is essential to ensure hiring managers engage with candidates who fulfill specific criteria.

By leveraging analytics, recruiters can gain valuable insights into key performance indicators (KPIs) and better understand the talent pool, enabling them to make more informed decisions and craft tailored recruiting strategies that align with their business goals.

Assessing the Recruitment Landscape

Recruiting top talent requires significant resources. The average cost per hire is around $4,700 but can be significantly more, depending on the position. A recent study from the Society for Human Resource Management (SHRM) found that some employers spend three to four times what they pay annually for the position for which they are recruiting. Thus, lenders need to approach recruiting with an eye towards efficacy to ensure those dollars are invested wisely.

Before deciding who to hire, recruiters must understand the pool from which they are plucking talent. There are 177,912 producing LOs in the industry today, representing a 46% decline from just a little over two years ago. Turnover data indicates LOs change companies roughly every four years for an average annual turnover rate of 25%. As such, 44,478 LOs will likely be on the market for a new employer in the next 12 months. This significantly reduced talent pool signifies a highly competitive recruitment environment, requiring managers to be more strategic in their LO target and understand current production trends.

Over the past year, loan officers have averaged 21 units, equating to just under two loans per month, resulting in $6.6 million in production. Naturally, lenders aim to attract the highest performers. To be in the top 1% of loan officers today, it’s essential to consider both volume and units due to regional home price variations. Over the last 12 months, the top 1% by volume averaged $85 million from 164.1 units. Examining the top 1% by units, over the past year, they averaged $62.7 million in production from 226.9 units, equating to an average of 19 units per month.

Achieving such high production numbers is impressive, but attracting top producers to switch companies is challenging. There’s a recruiting sweet spot for each market, but generally, LOs doing four to six loans per month are the most willing to have a conversation. Knowing how candidates rank against their peers is key to determining where and how to allocate recruiting resources. The following tiers provide a general guideline for where LOs fall based on their production.

Percentage of Tier	LO Count	Production Volume ($)	Avg Production Volume ($)	Units Per Last 12 Months	Avg 12-Month Unit Count	Average Monthly Unit Count
Top 1%	1,900	$121B	$63M	438,800	220	19
95-99% (Next 4%)	7,700	$248B	$32M	830,400	110	9
80-95% (Next 15%)	28,700	$456B	$16M	1,404,200	49	4
60-80% (Next 20 %)	37,800	$280B	$7M	808,900	21	2
30-60% (Next 30%)	55,000	$147B	$3M	427,000	8	1
1-30% (Next 30%)	44,800	$26B	$585K	81,000	2	0
Less than 1%	2,000	$786M	$395K	2,200	1	0

Recruiting without looking at the data is illogical in an industry rooted in numbers. By focusing on the volume tiers of LOs, hiring managers can craft a recruiting strategy that fits their business’s specific goals. 

Finding the right “fit”

Of course, production stats provide a broad picture of an LO’s overall performance but little insight into an LO’s compatibility with a given organization. Every hiring manager would love to snag an LO generating more than $100 million in volume annually, but these LOs represent only 1% of the overall talent pool. Furthermore, production volume alone may not tell the whole story of an LO’s value. Thus, determining “fit” requires hiring managers to take a more nuanced look at an LO’s stats before engaging in a recruiting conversation.

For example, an LO that specializes in government-insured loan products may have a lower annual production volume than an LO that only originates conventional loans, but depending on an organization’s needs, the government lending LO specialist may fulfill a business need that a top-tier LO cannot. An organization seeking to grow a team may seek to cultivate talent internally versus acquiring it on the open market, and relying solely on volume data may cause a hiring manager to overlook newer LOs who are eager for success and possess the right attitude but haven’t yet reached top producer status.

In addition, KPIs such as customer satisfaction scores, retention rates and the ability to navigate regulatory changes can offer organizations a better understanding of how potential candidates may fit into the lender’s overall culture. Softer skills like building and maintaining relationships, adapting to market fluctuations, and effectively communicating with clients and partners can be equally valuable as units and volume in the right circumstances.

Ergo, recruiters should look at potential LOs’ entire production profile (units, loan types, tenure, skill set, etc.) and not just their average production volume to ensure they invest resources wisely and target the right candidates to meet their organization’s needs.

Determining drivers of success

Long-term success in the origination business is also contingent on existing relationships and referral partners. Data shows a strong correlation between the average number of buy-side agent relationships an LO possesses and overall origination performance.

Agent relationships can offer critical insights into an LO’s areas of specialty, whether geographical or product-driven, which can also help hiring managers identify candidates that meet their needs. Furthermore, digging into these relationships can help managers determine a candidate’s new business trajectory. For example, an LO may have 10 agent partners they’ve worked with throughout their career, but if half of those agents are no longer active, those relationships are not as valuable as they may seem on paper.

Another indicator of expected future success is the amount of a candidate’s business that comes from existing referral relationships versus new relationships. Wallet share, or the amount of a single agent’s business an LO receives, can be equally as telling about that candidate’s room for growth (or lack thereof). Doing this legwork to better understand a potential candidate’s “current state of business” before reaching out ensures more productive conversations and, ultimately, better hiring outcomes.

In short, leveraging data in recruiting provides an essential foundation for making informed decisions in the competitive landscape of LO recruitment. By thoroughly understanding the talent pool and recognizing the value of comprehensive production profiles, recruiters can better identify candidates who align with their organizational needs and culture.

As the industry faces a significantly reduced talent pool and high turnover rates, a strategic and holistic approach to recruitment ensures that resources are invested wisely, ultimately safeguarding the organization’s productivity, morale and bottom line. By integrating analytics into the recruitment process, lenders can enhance their ability to attract, retain and develop the right talent, positioning themselves for sustainable growth and resilience in a dynamic market.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)