Over the past several years, the mortgage industry has been increasingly focused on creating a diverse, inclusive and welcoming place of employment for all people, regardless of gender, age, religion, race, ethnicity, cultural background or sexual orientation. Not only is this the right thing to do, it’s simply good for business.
By hiring more people with similar traits and backgrounds as your clients, you stand to get more of their business. You also inject new ideas into your company by listening to voices you may not have heard before, all of which can help advance an organization’s success.
The demographics for becoming more diverse are certainly in the industry’s favor. The racial, ethnic and gender profile of the U.S. has and will continue to change. Today’s borrowers are more likely to be women, African American, Asian American or Hispanic American than ever before. And these trends will continue to grow for subsequent generations.
Generational diversity also is critical as the homebuying population matures. A Stratmor Group report from November 2020 states that “millennials have arrived en force, representing more than half of all mortgage purchase loans year-to-date.” Millennials — generally defined as those born between 1981 and 1996 — were responsible for about 52% of purchase loans and 41% of all mortgages in 2020, according to the Stratmor Group report. Generation X and baby boomers were each well below this figure with shares of about 26%.
It would be wise to keep these quickly changing demographics in mind for your recruiting efforts. Your employees will need to look like your clients and understand their needs if you want to earn, retain and grow this type of business.
Increased innovation
Studies also have found that a diverse workforce leads to more innovation and better financial performance. The latest McKinsey & Co. report on diversity and inclusion reinforced the idea that the business case remains robust for maintaining a diverse workforce. It also found that the relationship between diversity inside leadership teams and the likelihood of financial outperformance has strengthened over time.
Additionally, numerous studies have shown that a diverse workplace is both a great tool for recruiting new employees of all kinds as well as for retaining talented performers. These are true imperatives for all mortgage companies.
As many lenders know, it has become quite difficult lately to recruit loan officers of any kind, so they need to do whatever they can to stand out to prospects as a great place to work. Promoting diversity is not only a great way to differentiate your organization from your competitors, it also helps you to expand your recruiting pool.
Meaningful work
There are many strategies that mortgage companies can use to attract and retain more diverse employees. Referrals can be a great resource. Your leadership should be sure your employees know about your focus on growing a more diverse workforce. Company executives can ask employees to recommend candidates to create a talent pool of qualified options.
Another strategy is to look at your marketing materials and the language you use when recruiting. Both should target a wide range of candidates. Also look at the imagery you’re using and attempt to include a wide range of photos that reflect a more diverse team. Today’s candidates are increasingly looking for work that’s meaningful. According to Harvard Business Review research, 90% of people are willing to earn less money in order to do more meaningful work. This research also showed that people who find meaning in their work are 69% less likely to quit in the ensuing six months and stay in their positions seven months longer on average, which bodes well for retention.
When it comes to recruiting in the mortgage industry, this may mean emphasizing that your company has the programs and resources to truly help first-time or low-income homebuyers, or that you’re able to put more people in homes. Knowing that they will be making a difference in their clients’ lives can be meaningful and will appeal to potential employees.
Empowered workforce
Candidates looking for meaning in their work also will be drawn to mortgage companies where they feel they will be empowered and able to contribute in a significant way to the company’s growth. In addition, potential employees will seek out companies that offer paths for advancement in their careers.
If your technology is cutting edge, be sure to emphasize this in your recruiting efforts. Millennials in particular are looking for employers that embrace technology and innovation. About seven in 10 millennials say that the degree to which an organization embraces technology and innovation is a factor that influences where they work, according to the Computing Technology Industry Association.
There are plenty of examples of efforts within the mortgage industry to increase diversity. Fannie Mae and Freddie Mac, for example, have managed to do so by implementing new practices to recruit and promote a diverse workforce. According to a Government Accountability Office report released last year, the government-sponsored enterprises (GSEs) have adopted measurement and accountability standards for their diversity and inclusion goals, and they have targeted requirements for diverse candidates. These diversity programs are led by senior management and received a commitment from the GSEs’ top leaders.
These efforts should be constantly measured as well. At Fannie Mae, senior leaders are responsible for assessing whether the company’s diversity and inclusion goals are being met, and for identifying ways to improve their diversity strategies. The agency’s vice president of the Office of Minority and Women Inclusion is responsible for ensuring diversity and inclusion strategies are embedded within the organization’s initiatives, programs and practices. The GSEs also use quantitative data to create benchmarks and measure progress toward their goals.
Outside resources
While many mortgage companies are fully aware of this information and the steps they need to take, they may still not be sure how to go about it. Fortunately, there is no shortage of support and resources for mortgage companies taking a serious look at becoming more diverse.
To its credit, the industry has answered the call. For instance, the Diversity and Inclusion Resource Center at the Mortgage Bankers Association (MBA) provides lenders with tools for developing more diverse organizations. But this isn’t the only resource. Here are some of the groups and organizations that can help your company achieve its goals of becoming a more diverse workplace. Many of these organizations offer regional or local chapter meetings, national conferences, training and education programs, job boards and recruiting assistance.
● NAMMBA: The National Association of Minority Mortgage Bankers of America is a national trade association that provides education, career development and resources to increase the engagement of minorities and women in the mortgage industry. The group currently has 30 chapters, mostly in the Sun Belt states, with plans to add at least a dozen more over the next 18 to 24 months. It also partners with local colleges and universities, including historically Black institutions, to develop programs and initiatives for introducing and attracting minorities and women into the mortgage industry.
- AMDC: Part of the Five Star Institute, the American Mortgage Diversity Council promotes diversity and inclusion throughout the mortgage industry via membership groups, publications, conferences and education services. The organization develops and provides tools and strategies to improve diversity of thought, experience, race, ethnicity, culture, religion, style, sexual orientation and gender identity.
- mPower: Part of the MBA, mPower — which stands for MBA Promoting Opportunities for Women to Extend their Reach — is one of the largest networking organizations for women in real estate finance. It serves as a platform for women to strengthen their networks, achieve professional growth and development, and to exchange ideas and information about the industry and the broader economy. Among its resources is a library of articles and videos to help women advance their careers in the mortgage industry.
- NEXT: A women’s executive mortgage summit, NEXT specifically aims to offer a place for high-ranking women executives to meet, learn and exchange information. The group sponsors three networking events each year that are attended by senior executives and decisionmakers. About 90% of attendees hold the title of vice president or higher while about 85% of attendees are women.
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You may know of other organizations dedicated to building a more diverse mortgage workplace. No doubt more such groups will blossom in the years ahead as diversity becomes a more critical element in organizations that hope to succeed in this rapidly evolving landscape. Support these organizations and encourage your employees to join and participate in them.
While these organizations can help you diversify your workplace, diversity and inclusion efforts require sincere effort on your part. It can’t be about window dressing because people will tend to see through that. You need to be serious and show you’re committed. But the rewards — both psychological and financial — will be well worth it.
