Q/A with Rick Glass of Rick Glass Executive Search

MBA NewsLink recently posed questions to Rick Glass, CEO of Rick Glass Executive Search, Sacramento, Calif. He has more than 25 years of experience working with the mortgage industry to identify and secure top-level executive talent. He is available at Rick@RickGlassExecutiveSearch.com.

MBA NEWSLINK: What are the major issues for lenders and vendors in recruiting top executive talent in today’s environment? In particular, how are you accommodating lenders’ need to attract more diversity for key positions?

RICK GLASS: There are several major issues in play for lenders and vendors as they recruit senior executives today. Perhaps most important among them is the concept of commitment, both competitively and corporately.

The highest caliber prospective candidates, the ones who are surpassing performance objectives, have well-defined goals and a vision for their careers going forward. They may be completely content in their current positions, but nevertheless may be asking themselves if their present jobs offer the challenge and rewards they seek long-term. So when considering a new position, the first question they will want answered is whether the new company ‘in it to win it,’ or will they be part of the mainstream pack?

To attract the best people, companies must ask themselves that same question and be prepared to deliver cogent responses. This may require introspection and a thorough understanding by the C-suite on where they are going, how they intend to get there and what differentiates them from other mortgage companies.

An ancillary aspect that candidates will be looking to have answered is whether the company’s rewards system is aligned with its plan for performance. It is unrealistic to expect to attract the talent you need to get to the Promised Land if the compensation and advancement prospects are insufficient in the minds of candidates.

Third, companies need to appreciate the dynamics of the most successful searches, and this is where so many are in the dark. C-level executives often take the path of least resistance by leveraging their own contacts and people with whom they have worked in the past. But to achieve the best results and bring new blood into the organization instead of recycling former associates, a tremendously analytical process is required.

And that’s where people in my industry come in–to help lenders, servicers and vendors position themselves to attract the very best candidates for their key management and executive roles. Once the target is identified, a critical additional component comes into play, and that is working with the candidates and clients to ensure they have sufficient information to make decisions that are in their best interests. This is an art unto itself.

As to executive diversity, my experience has been more organic rather than targeted. Among my most recent 70 senior executive placements, the diversity ratio is 32.9 percent among hired executives. This has just happened and was not planned. Diversity may be more of an issue in general staffing than it is at the highest levels of management, whether in lending, servicing or among vendors.

NEWSLINK: What can lenders do to encourage greater diversity in their workforces, beyond the executive ranks?

GLASS: Many articles have been written about this and most of them are concerned with outreach by industry companies to minorities and young people. While this is a valid approach, my feeling is that the mortgage industry in general needs to get out of the foxholes and raise its profile as a place to do important and satisfying work. We have been targeted for years by regulators and legislators, but hopefully the worst of that is in the past and the industry can look forward to improving its image as a great place to build a career.

I have been writing recently about the Millennials and among the things I have discovered is that they want to feel they are doing important work that helps people achieve their dreams. What better place than the industry that enables people to own their own homes?

The industry has also been consolidating, with the huge numbers of companies becoming a more manageable group representing depositories, non-banks and third-party providers. As this happens, more focused growth is occurring and that leads to job creation in general staff ranks. Outreach efforts are happening now among many companies seeking new talent from all sectors, including the diverse segments all around the nation. As the industry becomes more attractive to newcomers, significant progress should be seen in workforce diversity results.

NEWSLINK: What role are Millennials playing in your recruiting efforts?

GLASS: Their role is increasing substantially, which is predictable in view of the massive size of the generation. Given the relatively advanced ages of mortgage professionals, there is a sharp generational divide coming as more Millennials become homeowners.

Looking back 20 years, many of the candidates I found for mortgage banking roles became leaders. Now they are clients and are interested in finding the emerging leaders who will be moving into upper management and the C-suite in time for the next generation of homebuyers. Most of the more senior executives realize that the next wave will be even larger than their own generation and will require a different way of doing things, so they want to be ready for the years ahead with new strategies and tactics. Additionally, the mortgage crisis and its residual effects steered much potential talent away from the mortgage industry, but that is starting to change among new and recent college graduates who are looking for their first, second or even third job since college.

For Millennials that entered the industry a few years ago, this means they have a head start and a number are rising rapidly within the various mortgage sectors. Pinpointing the ones that are ready for senior roles can be challenging, but I have been finding success in helping companies that want that profile, particularly over the past two years.

NEWSLINK: Why do executives search the mortgage industry for different employment opportunities? Have their priorities changed over the past 5-10 years?

GLASS: Not much has truly changed over the past 5-10 years, but there is a new wrinkle. The usual reasons are still there: broken promises, unfulfilled expectations, the “stuck” feeling within organizations that aren’t providing the advancement originally sought and the desire to earn more and have greater impact and contributions. These are classic reasons executives desire to move on and they probably always will be. Things have also heated up due to the intense regulatory pressure, the costs associated with compliance and the aftermath of the foxhole mentality.

The new wrinkle comes in the form of companies that have made commitments over the last few years to grow market share and footprint, both organically and through acquisition. These are mainly nonbanks and they are offering opportunities in many parts of the country that are luring executives who are actively seeking and those who are presently satisfied, at least to take a look and consider them. Similarly, the vendor space has consolidated and the now-larger firms are constantly looking for executive leadership that can move their growth agendas forward.

You can’t underestimate the importance of impact among top prospects. It stands to reason that the most desirable people would be the ones who are offered authentic opportunities to make a meaningful difference within organizations and the industry as a whole. My practice has thrived by identifying and sourcing these individuals because my clients and their searches provide opportunities to make that type of impact and contribution, supported by the culture, requisite runway and resources that attract talent.

NEWSLINK: How often do counteroffers play a role in the process?

GLASS: Effectively addressing counteroffers is a must to all recruiters and a standard operating procedure in my practice. Why? The biggest risk for any client of a recently hired executive is that executive’s inability to formally end the relationship with their current employer, specifically after formally agreeing to join the client. The most common and effective method for current employers to prevent high performers from accepting career opportunities outside the firm from leaving is the infamous counteroffer. Spiced with emotional manipulation and promises, counteroffers continue to be very alluring to unprepared candidates.

But the acceptance of counteroffers are notorious for jeopardizing careers, revealing serious character flaws and kicking problematic issues down the road until they snowball and surface later. The employee who accepts a counteroffer blindly places their career at risk. On the other hand, the current employer extending the counter offer, often by manipulating emotions until accepted, saves face, prevents disruption, doesn’t risk losing momentum and foregoes the investment of time and resources in the process of replacement. It is a completely self-serving tool that often secures at least another few months before having to address the real issues. And let’s not forget–the trust was broken.

Part of my job is educating the prospect, making them aware of this technique and preparing them to professionally handle the enticement and promises which continue to capture the attention of many unsuspecting resigning executives. It is never a good idea for them to rescind acceptance, go back on their word and remain with their current employer. As Forbes observed in a 2015 article: “Statistics say, as the anti-counteroffer crowd likes to point out, that the average person who accepts a counter offer is gone from his or her job within six months anyway.” Industry statistics claim that 89 percent are gone within six months and 93 percent within 18 months.

NEWSLINK: What pitfalls do mortgage lenders need to know about in recruiting senior talent?

GLASS: There are numerous pitfalls, but that’s not surprising given the importance of senior executive hiring decisions. Here are six that I see frequently:

Pitfall 1: Taking the easy route in recruiting. Things have changed. We are operating in a chaotic environment under extreme regulatory scrutiny that requires a unique potential to learn, adapt and stay on top. Seek out individuals who have demonstrated the ability to adapt and grow into increasingly complex roles and environments while leading, innovating and inspiring through chaos and change. Pre-crisis success does not automatically guarantee post-crisis success; it is a new ballgame.

Pitfall 2: Not uncovering the “real story.” Most organizations lack the ability to determine potential by asking the right questions to uncover prospective candidates’ true attributes. It goes beyond their knowledge and expertise: What are they doing to improve their performance? What do they do to broaden their thinking? Their experiences? How do they manage personal development? There’s a process to do this properly and surprisingly few truly understand and use it because it is difficult and time consuming.

Pitfall 3: Not knowing “were the beef is” right now, today. Over time, people get quite good at saying what others want to hear when talking about employment, particularly in the senior ranks. Employers need to be able to sift through the chaff to uncover the grain. Where in the performance curve is the prospect? Have they peaked? What challenges have they addressed in the past 12-18 months? What is their approach, thinking process and their results? How did they engage their teams? How have they evolved over the past few years?

Pitfall 4: Ensuring that your leadership team stays on point, and carries the message of your culture. Inconsistent leadership messages are ‘red flags’ that scare high performance talent. In the complex process of finding, assessing and acquiring the best talent, employers need to be aware that senior candidates are scrutinizing just as much as they are being scrutinized.

Pitfall 5: Understanding prospects’ motivations. It’s not a given from verbal answers alone–in my experience, extensive evaluation analysis is required. If an employer is not able to understand prospects’ real career motivations and drivers, they can’t expect a sustainable, productive relationship.

Pitfall 6: Making empty promises. I have seen it time and time again with highly talented people in executive positions. When expressed or implied promises go unfulfilled, these leaders feel compromised and resentful. It most often happens when they are forced to operate below capacity due to politics, structure or some other company decision outside of their control that limits their success. It is perhaps the greatest source of job dissatisfaction among high performers, and I’ve been highly successful in recruiting them for clients that provide levels of contribution and impact lacking in their former employment.

NEWSLINK: What factors can affect hiring decisions at the last minute (i.e. compensation, track record accuracy and why they desire to leave their current employer)?

GLASS: Last-minute issues at the offer stage “altar” are usually not as sudden as they appear. Most actually occurred months earlier, but were brushed under the carpet, temporarily forgotten, ignored or just pacified. It is not uncommon for a “red flag” concern to slip through the process without great diligence. The recruiter’s function is to identify and address all red flags and prevent these last minute roadblocks from occurring. This is accomplished by continually keeping in contact with the candidate throughout the process, understanding them both professionally and emotionally and addressing potential issues–which can involve some drama.

Top recruiters are always hypothesizing “what-ifs” and “when this happens how will you react?” scenarios in order to solve problems before they arise. Recruiters will walk the candidate through a virtual offer and acceptance many times before it actually happens, so that when it does, there are no doubts–just carefully thought-out responses.

We continually contact and monitor the candidate, checking and rechecking their true motives, ensuring the opportunity with the client addresses each motivating factor and nothing has changed since the last conversation. Before an offer is extended, the best recruiters ensure all obstacles are removed so that absolutely nothing can prevent candidates from accepting a fair offer from the client, formally resigning and providing their current employer a two-week notice. I don’t allow my clients to extend a formal written offer until one has been verbally accepted by the candidate. When all the bases are covered, then we can formally execute without obstacles.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor does it connote an endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions; articles and/or Q/A inquiries should be sent to Mike Sorohan, editor, at msorohan@mba.org.)