There’s been some buzz lately about whether the Regional Manager role is necessary or if this position should be cut as a cost savings measure. The National Mortgage News recently ran an article on this subject and there’s also been some debate about it on LinkedIn.
Upon reading, the consensus seems to be somewhat split. One school of thought is that CEO’s and National Sales Managers could and should be more involved at the street level and more connected to branches, while the other camp insists the middle management layer is absolutely critical. A lot of this seems to involve recruiting and the reduced effectiveness of newly hired Regionals to recruit/grow what they claimed during the interview process, thereby reducing their value to an organization.
While I’m always a cheerleader for CEO’s to be in tune at the Origination level, seeing firsthand what’s happening there, I also think asking CEO’s to take over managing branches directly is just not feasible. For national IMB’s with sizeable volume, CEO’s are already extremely busy with running the company – from ensuring compliance to legal, juggling margins, endless meetings and reports, etc. They simply do not have the time to manage 40+ branch managers, much less recruiting new ones. Branch Managers would quickly become frustrated because they are not getting the level of support they’re used to.
With respect to Recruiting from new leadership, I think there are a couple reasons for the decline. First, there are lenders out there who have attached a whopping per head financial penalty for the solicitation of former employees. (You know who you are) Even if these cases are not successful in court (and most aren’t) most people don’t want the drama of a lawsuit. It’s expensive, a time suck and stressful.
There is a sizeable IMB we work with who recently cut the Divisional layer of management. This resulted in the Head of Sales suddenly having 18 Regional Managers reporting to him. Things are falling through the cracks and he’s very likely to suffer burnout within a year. There is only so much one person can be expected to shoulder effectively.
While I can certainly see the cost benefits of cutting layers of management, are the consequences worth it?
