Three Ways to Break the Hiring-Layoffs Cycle

Mortgage lending will always be a cyclical industry. But that does not mean mortgage lenders must be beholden to the cycle of desperate hiring followed by large-scale layoffs as the market’s whims dictate.

One of the most impactful investments by mortgage lenders is developing infrastructure that can scale headcount up or down without the financial, operational, and emotional burden of hiring and layoffs.

Even better: since the last “do more with less” era in the late 2000s, more options have emerged to power the capacity scaling that does not require you to double your human resources team. In this piece, I will highlight three options, and explain how they can position lenders to succeed in any market conditions.

Option 1: Outsource to a Specialized Staffing Agency

Specialized staffing agencies, some of which focus on financial services, make it possible to rapidly increase or decrease the amount of work your company performs. Moreover, they offer a known cost for that functionality, which is hugely helpful for financial forecasting.

But it is also true that if your organization is not currently using a staffing agency, you will likely have to adjust your internal operations.

For example, today, you may have full-time employees who do a combination of rote administrative and creative/complex work. To make the staffing agency model work, you may have to reallocate assignments so that internal people focus solely on complex or creative tasks and offload administrative or rote functions to an agency.

The good news is that a down market cycle offers a prime opportunity to make these assessments and adjustments so your team can scale up or down as the market shifts.

Option 2: Streamline Your Tech Stack to Boost Efficiency

Raise your hand if this sounds familiar: the market slows, so you go into capital preservation mode, meaning layoffs, hiring freezes, salary freezes, and no new investments.

Then, when the market turns, you are thrown into growth mode … scrambling to hire and fight for the same talent as your competitors. You become desperate to empower your staff to work faster, so you shell out for the tech solutions they request without worrying about how they may impact the rest of your tech stack.

That is the norm for many mortgage lenders—and it is a difficult cycle to break. But down markets are a great time to start.

One outcome of this boom-and-bust cycle is that many lenders are paying for more technology than they need or not using what they have to its full capability.

A technology audit can identify opportunities to streamline so that you are only paying for what you need and getting the maximum performance for the technology you are paying for. This kind of audit can also be a great complement to the operational audit mentioned above.

As you streamline workflows, you will be poised to identify opportunities to reassign and outsource various tasks.

Option 3: Charge Your IT Team’s Abilities via Generative AI

We were not discussing generative artificial intelligence (AI) solutions in the last market downturn. One of the most promising applications of the new generative AI available today is their potential to accelerate IT development. Generative AI that understands and writes code can provide a scaffolding that IT teams build on, letting them start much further along the path of any given project.

The implications are significant for mortgage lenders with unfilled IT positions or long queues of tasks for their IT teams. In the near term, generative AI-powered IT teams will enjoy greater productivity. As those highly productive teams clear ticket backlogs, their organizations will enjoy enhanced performance.

From there, a new world of possibility opens for digitally enabled lenders. If your IT team does not plan to tap the power of generative AI today, ask about this capability in conversations with IT and outsourcing partners.

Equip Your Team to Scale in Advance

Many mortgage lenders have “right-sized” their teams by this point in the market cycle, positioning themselves perfectly to assess their teams’ scalability.

Lenders who prioritize this now will be the best positioned to pivot when the market shifts, as their teams will have the operational and technological support to take on the influx of work created by the next boom cycle.

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Tim Von Kaenel

Tim Von Kaenel is Chief Strategy Officer at CI&T, a global digital specialist. CI&T’s Financial Services team specializes in customer experience management, mortgage operations, real-time payments, open banking, banking-as-a-service, and asset and wealth management.
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