Attracting talent: How lenders stack their rosters

Last month, the U.S. Department of Labor released a report that reinforced the country’s economic strength. The U.S. job market continued to swell as employers added 266,000 jobs in November 2019, marking 110 straight months of job gains. Driven by this economic expansion, the unemployment rate dipped to 3.5% — the lowest level in the past half century.

However, the prosperity has fueled a competitive landscape, as lenders have mounted bids for top executives and fended off poachers to retain the talent they’ve developed.

“If I don’t have [my staff’s] buy-in, I don’t have anything,” said Mark Medrano, assistant vice president of loss recovery at Veros Credit. “I’m really only as good as my staff.”

Attracting, developing and retaining top talent is a challenge, and in this current employment landscape, the risks and rewards are heightened.

In the past year, top auto lenders have lost senior leadership to competitors. Bank of America’s 15-year executive Kal Valakuzhy joined Wells Fargo Auto as head of digital channel products and strategy, and Chase Auto’s Tanya Sanders was named Wells Fargo’s head of retail credit and fulfillment. Meanwhile, BBVA Compass auto lending chief Chuck Berend joined First Investors Financial Service, while the bank’s National Sales Director Brian McGuigan signed on as lender development manager at Cox Automotive.

Senior executives have left captives Hyundai Capital America and Nissan Motor Acceptance Corp. in recent months, as well. City National Bank enlisted HCA Chief Risk Officer Marcelo Brutti as its risk chief in July 2019. NMAC Director of Collections and Loss Recovery Brian Massey joined Cox subsidiary Manheim in November.

What qualities to look for, how to mitigate top challenges, and how to retain developed and trained staff are questions every senior-level leader strives to answer.

Target Traits

Qualifications for new hires can depend on the specific role, but certain personality traits can make or break an employer’s ultimate decision. For prime lenders Huntington Bank and BMO Harris Bank, experience is highly valued.

“When I’m recruiting new staff, I think about attitude, aptitude and experience,” said Huntington Auto Finance President Rich Porrello, noting “the first two are the most critical.” Porrello, who oversees 275 employees, added that experience is critical to maintain consistency, especially from the perspective of being able to live and work through economic cycles.

At BMO Harris, target traits vary depending on whether the bank is looking to hire someone in a new or existing market. For new markets, “we definitely want an experienced individual — somebody who has been in the automobile business who hopefully has a dealer base and relationships that they can bring along when we hire them,” said Craig Harter, senior vice president and head of U.S. indirect lending.

On the other hand, BMO Harris broadens its scope and redirects its focus when hiring a replacement in a mature market. “We see a lot of success with people who are just good salespeople,” Harter said. “Sometimes we have to teach them the business, but because of their personal skills and work ethic, they don’t have to have that experience like you would entering into a new market.”

Washington State Employees Credit Union’s director of digital lending Ryan Brooks values eagerness to learn, an eye for detail, and adaptability as key characteristics for new hires. “With the growing digital world, small details can result in large errors,” Brooks said. “Likewise, working in the digital era, many things are subject to change. Being able to pivot quickly can help an individual be successful in this changing world.”

Meanwhile, senior leaders at subprime lenders Veros Credit and Global Lending Services scout new hires based on teamwork skills and staff referrals. Atlanta-based GLS primarily looks for candidates who exhibit strong teamwork and great problem-solving skills, along with exceptional ownership and drive. “With these three core competencies, we can teach much of the technical skills required to be successful,” said GLS Chief Executive Steve Thibodeau, who grew his staff 50% year over year to 750 employees. Many of the company’s best candidates have come from referrals from current associates, he added.

At Santa Ana, Calif.-based Veros, Medrano looks for dependability as a key trait among new hires. “Are you going to be here on time? Are you going to be here every day? Are you getting the job done?” Medrano said. “The biggest gift any person in my position can receive is the peace of mind from that employee, knowing that I don’t have to worry about him or her.”

However, coachability is more valuable than dependability, for Medrano. “I get a lot of folks who have it all figured out, who don’t need me or anybody,” he said. “Unforunately, it’s very hard to train those people, and it’s very hard to have more objective conversations in how we can get better.” As such, Medrano tries to fill open head count with entry-level positions, to shape employees from the ground up.

Stiff Competition

Competition is the biggest barrier to finding top talent, lenders noted. “As a relatively young company, we don’t have the brand recognition of many of the more established banks and lenders, yet we are fighting for the same great talent,” said GLS’s Thibodeau.

To combat the competition, Thibodeau relies on a recruiting team dedicated to sourcing talent and an “aggressive” employee referral program that rewards existing staff for recommending friends.

For WSECU’s Brooks, overcoming cultural perceptions of the financial services industry and getting people to apply can be challenging. “Financial services typically isn’t a line of work people grow up aspiring to work in, but it’s more than just front office work,” he said.

Harter and Medrano agreed that competition, especially in today’s employment landscape, is the biggest hindrance to securing talented staff. “We have the best employment rate in this country since 1969, what more do I need to say?” Medrano said. “Basically, we’re all competing in a small pool.”

To offset the lack of candidates, Medrano restructured his department about a year ago, a move that boosted productivity nearly 80% while saving costs. Specifically, leveraging technology and breaking his team into divisions with specific areas of expertise has allowed Medrano “to do more with less manpower,” he explained.

Porrello, meanwhile, said patience is the biggest challenge when hiring new staff. “It’s really important to be patient and to find the colleague that has all three — the attitude, aptitude and experience,” he said. Porrello leverages the bank’s personnel infrastructure, or “bench strength,” to mitigate the risk of hiring an employee too quickly. He noted that when the company is in a bind to hire someone promptly, he might ask a senior-level colleague in a different role to stretch bandwidth.

Tackling Turnover

How do managers retain the talent that they’ve spent time and resources to find and train? Corporate culture plays the ultimate role when battling turnover. An attractive benefits package and merit-based bonus incentives help, too, according to GLS and Veros.

Porrello credits Huntington Auto’s staff retention on transparency and communication. Annually, the Columbus, Ohio-based lender asks employees to fill out what is called a “Voice Survey.” Each segment and team develops action plans based on survey results “so that we lock arms on what’s important to them and what’s important to us,” he noted.

At BMO Harris, turnover remains low among the 77 employees in Harter’s division. Harter owes that, in part, to the company’s culture of investing in employees.

“We try to make sure we’re doing a really good job of talent development,” he said. Twice a year, BMO executives discuss topics like learning opportunities, new skill sets and job-development activities for team members.

“We want to make sure that we recognize, ‘Okay, here are the individuals who we think are ready to move onto the next level, what are we going to do to get them there?’” Harter said. “If you’re not doing it, you’re just going to lose them to something else.”

Editors’ note: This article first appeared in the January 2020 issue of Auto Finance News, available now.