Tackle the tough questions about training in the mortgage industry

Kenneth L. Kanady, director of learning, Wendover Consulting Inc.

As published in Scotsman Guide's Residential Edition, June 2012.

The strength of a mortgage brokerage or bank ultimately depends on the collective strength of its individual employees. Considering that, proper training has always been a hot topic in the mortgage industry, especially as it applies to originators and loan officers. Developing and implementing truly successful training programs often is easier said than done, however.

Managers, brokers, bankers and loan officers themselves would be wise to carefully consider any and all training initiatives that their companies undertake. With that in mind, here are eight questions — and eight answers — that every mortgage company should review when formulating or evaluating its in-house training.

1. Training in general

Perhaps the most pressing question an organization can consider is the very existence of training in the first place: Do mortgage companies even need highly trained loan officers to enhance sales performance?

Arguably, mortgage companies don’t necessarily need highly trained loan officers to succeed; well-trained will suffice. In many cases, instituting too much training can be as counterproductive as instituting too little. Instead, having experienced, credentialed and well-recruited loan officers is the factor that will lead to higher sales performances. Putting the wrong person into a quality training program still can lead to poor performance — even if that person is a veteran professional.

With that in mind, managers should err on the side of quality recruiting practices, solid management and reliable field-support resources. Good sales training certainly is important, but not as valuable as quality learning. Ultimately, training is just one of many methods for improving sales performance. The same also can be said about giving loan officers better technology, more competent managers, clearer direction or stronger selling strategies. Training is a tool; learning is an outcome.

Senior managers should even consider abandoning their common concept of training altogether, substituting that term with “learning.” As soon as this is done, practical decisionmaking processes start emerging. It’s far more important to help loan officers learn — and learn how to learn — than to hope that they complete training successfully or find a magical return-on-investment (ROI) metric that justifies financial decisions.

2. Key figures

Related to the nature of training itself, mortgage companies also may find themselves asking who has the greatest impact on the effectiveness of loan-officer training. Is that person the trainer, the manager or even loan officers themselves?

When considering this question, it’s helpful to perceive training as composed of three different phases: the period before training, the period during training and the period post training.

Before training, the manager is most important, in that it’s the manager who sets expectations, prepares the loan officer to learn, ensures the quality of the program and ensures that the program is aligned with actual needs.

During training, the trainer is most critical. Even a poorly designed curriculum can be successful if a truly qualified trainer is bringing the subject matter to life, cutting through less important details, interpreting meaning, simplifying complexities and empowering the program’s trainees.

Post training, the most important figure is once again the manager, who must ensure that the training is being applied properly in the field via direct coaching, feedback, problem-solving and personal support. Loan officers, of course, have ongoing accountability for their own learning, but it’s the manager and the trainer who have the biggest impact on training effectiveness.

3. Assessment

Evaluating the value of training is a topic that’s certainly worthy of thorough consideration, but how exactly should CEOs and managers approach assessing the effectiveness of loan-officer training?

There are two commonly used ways to measure successful loan-officer training:

• Productivity improvement: Greater output achieved, higher volume and improved customer satisfaction, among other improvements.
• Performance improvement: Changes in officer sales behavior, knowledge, practices or values.

Both of these evaluation methods are important. That said, however, isolating and attributing an increase in sales productivity to a specific competency improvement can be inaccurate or even misleading. There are simply too many variables that can impact sales outcomes, including changes in the marketplace, product features, regulations, pricing, competition and consumer demographics. Each of these factors — among others — can directly impact even well-designed ROI or cost-benefit-ratio formulae. Tracking results is helpful for planning and managing purposes, but this is ultimately limited in terms of capturing precise correlations to productivity.

Assessing training’s effectiveness with regards to performance improvements can be, at times, more useful than tracking productivity improvements. Changes in sales behaviors are directly observable and, furthermore, can be benchmarked, refined, practiced, improved, redirected and reshaped over time. All things considered, the best evaluation strategy is to assess the effectiveness of a training program by measuring both of these improvement types simultaneously.

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