How to Find, Interview & Hire the Best Loan Officers – A Board & CEO Primer
Written By: Deborah Gavello
As seen in The Findley Reports Volume 30, Edition 6
There are two items I hear repeatedly from bankers every day of the week. “Do you know any good loan officers and how can you help us get more deposits?” In this article I am going to discuss how to find and hire the best people, the Rainmaker Loan Officers. I will save the tricks of how to gather more deposits for a later article.
First, I think it is important to look at the overall job of managing a sales organization. As Gary Findley mentioned in a recent article, one consistent fact about last year’s Super Premier Performing Banks was they are all true sales organizations. They are banks that focus on Sales goals, and performance. I teach a very specific Sales Philosophy called “Performance Management”. The program has a template that includes a one-page model. It outlines what every bank’s CEO/President should be doing daily in order to keep his/her bank in a sales mode. If you would like more information on the model, contact me directly, and I will send it to you. For this article I will list the three top quadrants of the model:
1. Hire Qualified People
2. Set Performance Standards
3. Train and Motivate
Of the 9 quadrants in the Performance Management Model the first one-Hire Qualified People is the most important. If this one item is done perfectly everything else falls into place so much easier. What amazes me is why so few bankers spend the necessary amount of time improving their skills in this area. In fact, I have never yet been at any bank where the employees do an outstanding job of interviewing people. If more time were spent on the front end, less time would be wasted on corrective action at the back end. Also, by hiring the best candidates from the beginning, executives have the ability in turn to reap the rewards of developing top performers. Right people are invigorating, and wrong people suck the living life out of everyone they come in contact with. Also the wrong ones historically don’t cover their own salaries and expenses. Therefore, the obvious implication is to look for the right people in the first place.
In order to head in the right direction, one of the World Class Sales Management criteria I recommend is for all executives within a bank to block out at least one hour a week to devote to recruiting activities (which doesn’t include interviewing time.) This is time set specifically aside to network, call colleagues, acquaintances and inquire if they know anyone that is looking for a job, and any great potential candidates that may be currently employed elsewhere. This includes calling clients and asking them, “Who is the best salesperson who has called on you in the last 30 days?” Do not restrict your choices to hire solely bankers: anyone that is successful and smart can be become a great banker. Most of the resumes that CEOs/Presidents look at are from bankers. Why be so overly concerned that loan officers have had banking experience? There are a lot of great salespeople out there, working in other fields that just need to get introduced to the wonderful world of banking.
Where have all the young people gone? When I look at the students in my Advanced Loan Officer training classes the average age is approximately 4850, and many students are in their sixties. There are so few young people in their twenties getting into banking. There are also so few, salespeople from other industries. There are plenty good fish out there in the sea of applicants. I know several very successful salespeople, that have MBAs in Business, were successful in another industry, but bankers reject interviewing them. Have an open mind; don’t throw good fish overboard without taking a better look at them. On a more careful examination one will discover that these salespeople probably know how to make cold calls into different industries which banks are unfamiliar with. They also might know how to read financial statements. I believe the next generation of bankers is going to come from college and university recruitment, and sales oriented companies. I predict that banks will be competing with the CPA firms who now actively recruit college graduates.
What I have found recently is, all the Rainmaker loan officers are gainfully employed, making great money, and outselling the competition. They aren’t on the market looking for jobs. Unfortunately, their resumes aren’t in the offices of the best recruiters, nor to be found on Monster.com. When times get tough, try other avenues such as, ask a group of loan officers who is the banker that is beating them the most out there? Then make a phone call and meet him/ her for lunch. Also, if there is a prospective client that won’t grant a loan officer an appointment because they say that they have the “best banker”, he/she should find out the name of that banker and that bank should go after and recruit that person.
Please don’t throw astronomical amounts of money at loan officers that are not rainmakers, but merely mediocre players. One recent example of a banker I know very well, because 1 have been out on calls with him, reportedly being paid a $140,000 base plus bonuses to move to another bank. I wish the bank that hired him had called me to ask about his sales abilities, I would have saved them a ton. He has current long-term clients that no one can guarantee he can bring over and he is awful on prospective new client appointments. Ask the important interview question, “Of the deals you currently have in your portfolio, how many did you source yourself?”
Furthermore, the mediocre and weak loan officers tend to stay at a bank for a couple of years, never bring in enough business to cover their salaries and expenses, go to the next bank and do the same thing.
They might have been through several mergers and acquisitions, but they don’t stay, or are asked to leave. Rainmakers don’t make a lot of job moves. They tend to have many years of posting great numbers of Loans/ Deposits at a fewer number of banks. Mediocre loan officers might look good on paper. However, with some good questioning techniques it is possible to sift through them rapidly and not waste precious interview time.
The art of interviewing is one my favorite Sales Management Skills. How many people are given several days of interviewing skills training? How many people have had their superiors sit in on an interview for the sole purpose of evaluation, not to facilitate a joint interview of a candidate? Although it is at the top of my Performance Management Model, interviewing skills are not traditionally taught in banks.
Bankers in general are not great at interviewing; of course, some are better than others. The biggest weakness is many bankers talk too much. The task of interviewing unfortunately becomes a chore instead of a pleasurable management activity. Prepare adequately in order to make hiring decisions based on quantitative reasons not gut feelings (subjective. reasons).
In order to make the process more rewarding, I find that having a typed list of prepared questions to ask makes a huge difference on the flow of the interview. It tends to keep the interviewer on track, and focused on business questions that will help screen out the good eggs from the broken ones. I am always adding to my list of good questions to ask on interviews. I tried several new interview questions this week. The same questions were asked to several candidates, and it made a huge difference in distinguishing between the individuals. (I put an asterisk next to the questions)
The following are some examples of questions you may choose to ask on Loan Officer interviews. These are in no particular order. Have the questions printed ahead of time, and take notes.
SUGGESTED INTERVIEW QUESTIONS (IN NO PARTICULAR ORDER)
- How do you go about learning something new?
- What was the last major change you went through? How did you handle that change? What would you have done differently?
- How would you learn our sales culture? How would you go about learning our, products and services?
- How do you get new business?
- How many new prospect appointments have you had in the last 3 months?
- How many new prospect appointments do you have scheduled for next week?
- What is your strongest sales skill? What sales skills could you improve?
- May I see your work Day-Timer or calendar?
- How many CPA’s do you currently receive referrals from?
- What does your next week appointments look like? How many appointments do you have set? With what type of companies?
- What is a day like when you don’t have appointments?
- Tell me about the most difficult account you ever sold.
- What qualities do you admire in a person?
- Who is the best boss you ever worked for and why?
- Of the clients you have in your portfolio how many did you bring in?
- How would that boss describe you? * What is your selling style?
- Will you supply me a copy of a recent write up you did on your own? (White out client name)
- Have you ever had a client angry with you? What did you do? How did you correct it?
- When did you last receive a referral? Where are you with respect to your percentage of loan and deposit goals, year to date?
- Who was number one in your group last quarter? (Out of how many people?) Where were you? How about last year?
- Tell me something about yourself that you wish came through on an interview, that we might see once you started working for us?
The idea is to look and listen to how candidates answer questions. Some of these questions they can’t practice, and if they are asked these again by another member of the bank’s team, the answers should be consistent.
In my classes I have the participants (senior management) make copies of ten to twenty recent resumes that have come across their desks. From these resumes teach everyone how to look for red flags, and not waste time interviewing the wrong people. Recently, I was picking one resume apart during a Sales Management Course, and the group said, “Stop, hold on, we hired this person.” I knew from the get go of reading his/her resume he/she wasn’t any good. I was correct, and just learned this week that this person is no longer working for my client. He/She worked at a lot of banks, wrote up a lot of complex deals, but was never ever successful! This could all be seen from carefully analyzing their resume- it was all job descriptions, not results, or proof of success! Look and find the successes in every resume you review. If the candidates have nothing delineated on their resume that shows they were successful, don’t interview them. If there is no description of any sales performance standings, #1, #2, #3 in their district, region, branch, or bank don’t waste your time interviewing them.
In summary, spend the time every week doing Recruiting Activities, mix, mingle, ask, and look for rainmakers. Prepare for all of your interviews, by looking over the resume for red flags, and for prior successes. Ask a ton of questions during the interview, take notes, and listen to how candidates answer questions. Smart people, can think on their toes. If during the first five minutes you think the person is wrong, stand up, thank him/her for their time, and end the interview. Think outside of the box, and look for non-bankers. Again, hiring qualified people and developing people is one of the most important jobs of the CEO/President. As always, good luck and good selling.
Do not re-produce in any form without written permission from Deborah Gavello (714) 478-8351 © Copyright 2010 Gavello and Associates