Latest executive moves in Denver
Many senior banking executives made moves in Denver over the last few months at banks including BofA, BOKF, Huntington, Wells Fargo, and Vectra. 25% were internal promotions, 37.5% were in market but external, and the balance or over 1/3 were out of market. To be fair, of the out of market hires, 2 used to reside in Denver.
Denver external leadership hires came in higher at 75% compared to the national average of 69% according to Paul Davis, The Banking Slate. Bench strength is an ongoing challenge for all banks across the country. We still have 55% of the baby boomers set to retire over the next 5 years. Succession planning is key especially regarding hiring at commercial lending and credit levels. By having a long-term vision and hiring a candidate with capacity and capabilities to aspire to a leadership role, the bank will set themselves up better for success.
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Age Gaps in Commercial Lending
A 2023 survey by MGIC found that 66% of loan originators are aged 50 or older. In addition, there is a notable scarcity of younger professionals entering the field, with few entering the pipeline to replace retiring veterans. The commercial lending space is mentally taxing, requires hard work, and can be a hard sell to younger members of the applicant pool. The formal credit training programs run by large banks in s have, for the most part, been shutting down since the beginning of the 2000s. In addition, commercial banking is often viewed in a negative light along with investment bankers, buy-side analysts, and sell-side analysts.
Whew, that’s a lot to contend with in attracting the best banking talent!
The solution
- Build alternative recruiting relationships. Build a pipeline of talent by cultivating strong relationships with local universities. Serve as guest lecturers for local finance professors, teaching students directly about the realities of commercial banking. A role on local campuses also gives bankers a chance to identify students with high potential for critical roles like relationship managers or underwriters. Start networking with campus faculty who have access to the leaders like athletes, students involved with leadership positions in Greek, clubs, etc. Ask for referrals. Internships is another way to provide on-the-job training and real-world experience that can lead to full-time positions come graduation.
- Launch a solid recognition program. Commercial lending is highly demanding, competitive, and draining. Rejection is a big part of the experience. Recognizing hard work and key achievements authentically with your team and organization carries a lot of weight in retention. It can be as simple as an email or during a team meeting. Don’t wait for the annual review.
- Help your employees work efficiently. Design a comprehensive onboarding program, streamline operations, and implement tools to increase efficiencies for bankers. Good employees want to be successful and productive, so put parameters in place to allow this. Be proactive but anticipate blocking and tackling for them too.
- Offer competitive compensation packages. Today with compensation published on job postings, commercial bankers are well aware of the market price for what they do. Get creative and the compensation package layers to land the best candidate. Also consider that top producers will want a formulaic bonus program so they get a cut of what they individually bring in.
Perhaps you’re already doing some or all of the above and if so congratulations! Keep it up. If not, enhance your current programs to attract and keep the best in commercial banking!
