I recently asked what their most important take-away was in their respective careers. Across the board, these managers said that hiring the right people in your sales organization is mandatory for success. This is no surprise. In my own corporate career, I learned firsthand that your team is only as strong as your weakest link.
The best in the business understand that the success of any one group or team depends on whether individuals fit with the company’s overriding vision and to what degree team members support each other. Great teams have no silos—they just get the work done and are happy about their contribution to the group’s success. According to psychologists, these employees are well-matched to their specific positions and the corporate culture. So, if hiring is such a critical issue, why aren’t more managers committed to installing better hiring practices at their firms?
As we move into the second part of the year, it is a good time to review the most common mistakes companies make when hiring employees. A recent survey conducted by the Young Entrepreneur Council revealed a dozen plus mistakes that result in hiring the wrong candidates for a position. I want to focus on the top five:
- Not Casting a Wide Enough Net. When companies hire employees on the fly, this almost always results in hiring candidates who are available versus those candidates who require more effort to attract but are ultimately better matched to the organization. Rushing through the hiring process is never a good business strategy as it results in poor performance and high turnover further down the road.
- Making “Starstruck” Hires. Candidates who have worked for well-known lenders are not necessarily the best fit for a smaller, more entrepreneurial company. Just because an employee worked at a top five lender does not mean that he or she will succeed at a middle-tier lender. The large lender’s brand may have driven the individual’s volume and an impressive W-2 does nothing to indicate whether the candidate has the selling skills needed to generate loan demand.
- Overvaluing Experience and Undervaluing Job Fit. Hiring experienced originators in hopes that the new salesperson’s customers will switch lenders is a faulty premise. According to industry research, half of an originator’s referral sources may not move to a new lender. This is especially true for average performers who have not cultivated strong relationships with their referral sources. Mortgage managers’ tendency to hire experienced originators who have not demonstrated the ability to self-source has hampered the industry from hiring more rookies. The result is an aging sales force and serious questions about who will replace originators who opt for early retirement.
- Not Having a Structured Interview Process. In the rush to hire, many managers depend on a W-2 review and whether they like how the candidate interviewed to make a decision. Research has shown that evaluating candidates based on their interview performance is only 14% predictive of job success. This is where a validated pre-hire assessment can be a game-changer as it evaluates whether the sales candidate is a fit with what’s required to succeed in mortgage origination.
- Failure to Hire for Culture Fit. Oftentimes, top producers’ volume can mask the fact that they can be disruptive to a firm that does not have the resources or bandwidth to manage them. While a $100 million producer can cure production problems, every salesperson is not a good match for every lender. If the individual is a prima donna, the time spent cajoling the originator and revising workflows to accommodate the person may not be worth it in the long run.
While there are other issues that result in poor hiring decisions, it is clear that hiring better originators starts with making sure that the right recruiting and selection processes are in place.
Pat Sherlock is the founder of QFS Sales Solutions, an organization that helps organizations improve their sales talent management and performance. For more information, visit https://patsherlock.com.