Jan./Feb. 2024 EditionStrategic Planning

Minimize Staffing Ebbs And Flows Through Strategic Tech Planning

Ours is a notoriously cyclical industry. Often, those cycles are known and anticipated. For instance, when facing an impending recession, or when unemployment numbers or interest rates start a slow escalation over a period of time, we shouldn’t be surprised by the fact of constant change.

Some cycles, however, are more unpredictable and dramatic. For instance, take the bursting of the housing bubble in 2008 that brought on the Great Recession. Or, conversely, when the COVID-19 pandemic sent city dwellers to the suburbs, unexpectedly driving home sales upward.

More recently, there was the refinance boom when mortgage rates plummeted in 2021—a boom that ended rapidly when rates went back up. The result? A huge number of lenders lost their jobs, effectively decimating an entire lending sector.

These particularly dramatic cycles make it difficult for mortgage and title insurance companies to manage staffing, and they find themselves in a merry-go-round of hiring and firing to effectively address the rise and fall of volume.

Neither the mortgage nor the title industry has the luxury of simply putting bodies in seats when there is a sudden escalation in demand. These industries are complex and highly regulated, and—at least for the foreseeable future—there is always a need for experienced individuals to fill vacant positions. Plus, there’s the added strain that recruiting, hiring and training puts on managers and their teams. That lag period rarely corresponds with the often sudden acceleration of order volume, leading to a strain on operations.

We’ve long known that implementing key automations would make a major dent in the hire/fire cycles to which the mortgage and title industries are so beholden. Identifying technology solutions to address the biggest time drains within the complex process of underwriting loans or managing title, escrow and closing can minimize the ebb and flow of staff during these volume transitions.

The time to plan for the next wave or trough is before you find yourself in the middle of it.

Here is a six-step process for creating a strategic plan around your use of technology in a way that will help you reduce time expended on each aspect of the process and allow you to retain a leaner but more experienced staff during the highs and lows.

Step 1: Where are you?

The best place to begin is to make an honest assessment of your current tech stack. Here are some high points to consider when conducting this analysis:

  • Consider the ROI of your current investment. Do the benefits justify the cost?
  • Are there obvious technology gaps that would improve efficiency or customer experience?
  • What innovative technologies would create greater time/money savings?
  • What new investments would maximize revenue generation?

Once you have a detailed analysis  of your tech stack, line the technology up with your current processes and procedures to assess where there may be roadblocks that could be eliminated by technology.

Step 2: Where are you heading?

Before you start plugging in random tech fixes to your systems, it would be wise to step back and take a look at technology investments in light of your 1-, 3-, and 5-year plans. How can technology help you meet your short-term goals as well as your long-term goals?

This will require you to sit with your IT team to understand the big picture, so that potential short term investments keep you at the forefront of technology, rather than creating a patchwork of investments that keep your company one step behind.

As part of this process of operation-wide discernment, you may want to begin by understanding who your borrowers are today, but also how the characteristics of your borrowers may change in the coming decade as a new generation moves into the homebuying process, and as current homeowners contemplate refinancing or buying their next home.

Working with your team, create a map of your borrowers’ journey, understanding that this map may be affected by distinct stages of life. Within those parameters, you can identify how technology can intersect at various points to create better customer service, improved communication, greater efficiency or time savings for your staff.

Step 3: Explore the technology landscape

Now that you have an assessment that looks at where you are, where you want to go, and how you want to improve your customer journey, it’s time to take a look at what kind of technology can help you meet your goals while staying within your targeted budget.

Here is where you need to tap into all of the resources at your disposal to determine where you can make the most effective investments.

Talk to your peers about what kinds of solutions have been most effective for them in serving customers, saving time and money, or growing market share.

Make sure your IT team is exploring opportunities with you and doing their due diligence on available solutions, so they can weigh in on the time and expense of integration and training.

Create a wish list for short-term investments that can elicit an immediate benefit. For instance, if you find yourself with a reduced staff in the current environment, which of the solutions you are looking at will provide an immediate time-saving benefit? Remember to assess the solution not only on cost effectiveness in terms of outright pricing, but also which offers a quicker integration, or shorter training time.

In the process, be cognizant of how what you are purchasing today can best integrate into the long-term plan. Avoid throwing money into a product that may become obsolete in light of your overall technology investment goals.

Step 4: Bring in the team

At any step along the way, from mapping the customer journey to planning for the future to assessing available solutions, make sure you are engaging your team. Your staff will be far more dedicated to the process if they are engaged in the planning stages and have a thorough understanding of the objectives.

In addition, employees working in the trenches can have great wisdom and insight to add to each stage, including:

  • Pinpointing pain points
  • Sharing knowledge of existing solutions that were effective in their last job
  • Identifying emerging technology they believe would improve workflow
  • Providing insight into the customer journey

Without this in-depth knowledge at the most foundational level of your company, you may find your bright new shiny solution is misaligned to the day-to-day challenges of your business.

For short-term solutions, you may find it is best to focus on only one aspect of the business that you are trying to improve. But for your long-term ambitions, you may want to conduct individual assessments on marketing and sales, processing, underwriting and closing, as each of these segments will have their individual requirements.

Step 5: Cost/Benefit Analysis

Factoring the financial benefit of modern technology is where the rubber meets the road. It is imperative that you do your due diligence when it comes to the actual time or cost savings a new solution may provide.

For instance, if you know that it is costing you $140 per loan for your loan officers time, and you can reduce the time investment with the aid of the recent technology to bring that number down to $120 per loan, you can quickly determine the cost savings over a years’ time.

That cost savings becomes one of the benchmarks for evaluating the efficacy of the investment. Another benchmark is the opportunities that the savings open up for raising salaries or growing the business more effectively.

Step 6: Set realistic timelines

Once you decide to invest in technology, work with the provider, your IT team, and staff to establish timelines for the implementation and training.

Another aspect of your timeline consideration may be in the timing of the purchase itself. You may want to align your investment to the growth of the market. For instance, do you hold off making the investment until your loan count starts to accelerate and there is more of a necessity to reduce how much time is spent in loan generation or underwriting? Can you get a better handle on your hiring pace by implementing greater efficiencies through a technology purchase at the appropriate time?

When you make the decision to invest in technology, more than anything else, be realistic about when you may see the benefits reflected in the bottom line. With some solutions, the benefits are obvious and immediate and well worth the time and effort that goes into your assessment and research. Sometimes the benefits are subtle and more difficult to track, for instance how the improved customer experience may contribute to market share growth over time.

In the cyclical ebb and flow of the mortgage industry, technology can be a huge benefit in reducing the challenge of growing or reducing staff through the peaks and troughs. Properly aligned technology can also reduce training time and get new hires up and running more quickly.

In addition, creating an effective tech stack can provide your experienced staff with the bandwidth they need to be more efficient and freer to focus more time and energy on serving your customers.