Banking Exchange Magazine Logo

3 ways to keep talent pool filled

Build—and retain—good lending talent today

3 ways to keep talent pool filled

Last week we discussed the possible future shortages in properly trained lenders faced by many community banks. This is a real possibility, so from a defensive point of view we should also consider ways of retaining and “growing” the lenders we already have or will attract into the pipeline.

Here are three rules that will help you build and retain your loan staff for the future.

Rule #1: Invest in personal growth and development, with a strong bias toward “more is better.”

A dozen years or so ago the Harvard Business Review published a study with significant implications for the issue of employee retention. The author noted that, increasingly, younger members of the workforce identified with their functional job descriptions rather than with the employer.

In other words, a young lender is more likely to identify himself as a “lender” than as an employee or officer of “XYZ Bank.”

A companion finding within the study was that opportunities to build individual skill sets was the #1 factor among several in overall job satisfaction trumping even financial compensation.

Why, I wonder, were these conclusions not evident to the banks themselves? Why do we have to be told something as important as this by outsiders, rather than sensing it among our own people?

Common sense says that better-trained employees benefit a bank’s business model by increasing customer satisfaction through more professional and quality interactions between banker and customer.

For this common sense reason alone why wouldn’t bank managements enthusiastically support increased educational opportunities?

Many do, of course, and make both internal and external growth and development opportunities available for employees. But some do not and “Exhibit A” in this sense is the way that training budgets at many companies were slashed in the wake of the Great Recession. That seems very short-sighted unless one’s perspective is no farther out on the horizon than the next quarterly earnings release.

Rule #2:  Create a career path for professional credit and lending development.

Career pathing is an activity that most large employers routinely do. It’s a way of assuring “bench depth” of talent by thinking through a series of logical career experiences to expand the personal horizons of the professional staff.

One growing opportunity that integrates with the professional and management needs of the bank is the level of experience and competence in protecting the bank’s brand through the quality of the branch staff.

In many banks the delivery of commercial credit products and services remains largely through the branch system. This means that lenders should be completely familiar and comfortable with the branch environment. It’s probably the best source of face-to-face contact with borrowers and borrowing prospects. At the same time, I know from my own experience that many lenders tend to disparage the branch environment. This is unfortunate and is a disservice to the overall business model of the bank.

Traditionally, branch career opportunities were tied to operational sorts of disciplines. This is rapidly becoming an obsolete notion as many staff members trained as consumer and small business lenders are finding themselves occupying positions of greater supervisory and management positions within branch systems. The old paradigms are giving way to more diverse work experiences, to the benefit of both the individual and the bank itself.

Rule #3:  Deliberately reinforce the bank’s credit culture through a series of basic experiences.

This may appear to be a variant on career pathing, yet there’s an important difference.

The lending process at every bank includes certain core elements. The first is the functional competence embodied in the Cs of Credit. All lenders should have the opportunity of experiencing the principal components of underwriting. In The Bank of New York’s Loan Officer Development Program, participants did statement spreading, credit investigations and inquiries, and formal credit analysis under the watchful eye of a permanent and experienced staff of credit professionals. We were plugged into the basic workflow of the credit function as participants and not just as observers.

The other prime component of building a strong credit culture is an understanding and appreciation of credit’s internal controls. This includes credit policy, loan review, documentation, and compliance. One’s credit education is incomplete without firsthand experience in appreciating the value of these processes. A strong credit culture requires both the functional skill sets of credit analysis and a rigorous commitment to enforcement of the bank’s controls.

Some of these experiences can be as simple as forensic analyses of failed lending deals.

How and why did the bank lose money on particular loans? 

What mistakes were made? 

Where did the process fall short?

Not all experience is equally good

Too often community bank managements make the mistake of thinking that all credit experiences, wherever acquired, are of equal value. This is a very short-sighted view when you consider how inconsistent credit “training” may be in different environments and how bad habits may be acquired and remain uncorrected for years.

Successful lending is more than sending a salesman out to talk to commercial credit prospects. It’s having the confidence in your processes that you can and will attain consistency and quality in the results. And it’s reinforcing the confidence of the lenders that they are capable of achieving the results that are unequivocally associated with success.

Success is not accidental.

It can only be found in a systemic approach. And that approach is likely to become more difficult to execute as a finite talent supply gets stretched in the years to come.

Ed O’Leary

Banking Exchange Contributing Editor Ed O'Leary, a veteran lender and workout expert, spent nearly 50 years in bank commercial credit and related functions, working with both major banks as well as community banking institutions. His last job before retiring was as the CEO of a regional bank headquartered in Alburquerque, N.M. He earned his workout spurs in the dark days of the 1980s and early 1990s in both oil patch and commercial real estate lending. O'Leary began his banking career at The Bank of New York in 1964, and worked at banks in Florida, Texas, Oklahoma, and New Mexico. He served as a faculty member and thesis advisor at ABA's Stonier Graduate School of Banking for more than two decades, and served as long as a faculty member for ABA's undergraduate and graduate commercial lending schools. Today he works as a consultant and expert witness, and serves as instructor for ABA e-learning courses. You can e-mail him at [email protected]. O'Leary's website can be found at

In mid-2016 O'Leary's "Talking Credit" blog received a bronze excellence award for the Northeastern Region from the American Society of Business Publication Editors.

back to top


About Us

Connect With Us


CSI: Hawthorn River
Lending Regulatory Compliance

WEBINAR: Tuesday, May 21st, 2024, 2:00 CT / 3:00 ET

Join us to learn more about leveraging technology in Hawthorn River to support your lending process and its regulatory compliance. From 1071, TRID, HMDA, CRA and more in the sea of regulatory acronyms, our end-to-end loan origination solution creates efficiency for financial institutions.

Join this session for an overview of the platform, an interactive Q&A and information about:


This webinar is brought to you by:
OneSpan logo