Recently Bank Director published its annual compensation survey. One of the report’s findings was related to a topic we’ve discussed before on the Purposeful Banker podcast – hiring commercial lenders.
Bank Director found that 43% of its respondents felt there was a lack of available lending talent in the market.
Interesting numbers, to be sure. But what do they mean? In one article about the survey, the editor of the Triangle Business Journal, Sougata Mukherjee, was fairly dismissive of the finding.
“To that, we say – Why bother? Has anyone noticed a big spike in commercial lending that would make banks hire real talented commercial lenders?”
Mukherjee softened that statement a bit in the next paragraph by noting that it clearly matters to bankers – as 40% of the Bank Director survey respondents listed commercial lending recruitment as a “top challenge for 2016.”
“Maybe commercial lending will be a little more robust this year,” Mukherjee wrote.
That logic seems based on an if/then statement: IF commercial lending is growing, THEN it makes sense to start hiring lenders.
There’s some truth to that – if you’re a company that’s growing, you need to hire enough people to keep up with the growth and avoid a plateau.
But there’s another side to that story. Just because your sector’s growth trajectory has leveled off doesn’t mean that you should start ignoring its needs. Then it becomes a self-fulfilling prophecy: The sector slows, so you stop putting resources into it, which then ensures that it will stagnate.
Skilled lenders can make a tremendous impact on a bank’s bottom line; the distribution of lender portfolio sizes at banks is a classic example of a Zipfian Curve, with the best performers producing much, much more than their less talented colleagues.
While it’s frustrating to hear that bankers are having a hard time finding talented lenders to hire, it’s encouraging that they’re making that recruitment effort a top priority. It’s a sign that they see potential in commercial lending, and that one of the main ways to tap into it – and spur profit and growth at their banks – is to focus on finding talent.
To be sure, this only one step in an arduous journey. There are all sorts of questions that need to be answered: Are colleges producing enough graduates with the right backgrounds for commercial lending? Are banking graduate schools attracting enough applicants? How do the compensation levels for commercial lenders compare to other jobs in the marketplace? And once lenders are hired, how well are they being trained and nurtured?
Still though, the Bank Director survey shows that the industry is recognizing that finding top-notch commercial lenders – i.e. your “Price Getters” is critical. And that’s a tremendously vital step to take.
Price Getting is the focus of Chapter 3 of our book Earn It: Building Your Bank’s Brand One Relationship at a Time. Click here to read it.
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