The oldest cohort of those considered Gen Z, which includes people born in 1997 or later, has started entering the workforce, and a significant number of them are now in college.
Gen Z represents 25% of the world’s population, $7 trillion or more in purchasing influence and will account for nearly a third of the workforce by 2030, according to a report from Oliver Wyman.
That makes them ideal candidates to work in sales, finance or operations in the mortgage industry.
“I think it’s absolutely critical” the mortgage industry recruits this generation, said Kristy Folino, senior vice president, custom solutions at ServiceLink, who cited the Oliver Wyman data. “We can’t ignore them and what they’re looking for.“
The pandemic hastened the decision to retire for many older workers. But it also changed the relationship with work and the workspace, which figures into what Gen Z wants, Folino said.
“Now it’s time for us to bring in this next generation,” Folino said. “And, there’s also so many things that they can bring to the table.”
Gen Z is the first truly technology-centric generation and is one of the most diverse in terms of demographics.
“We certainly want to look like that in serving them and very few companies do,” said Casey Cunningham, the CEO at mortgage industry training provider Xinnix. “To attract them, they need to start looking like them, and that’s easier said than done.”
Teri Williams, president and chief operating officer at OneUnited Bank, a Black-owned bank, agreed.
“We, like all banks, are finding it difficult to recruit talent into banking in general, not just the mortgage business,” Williams said. “There was a time when we started off as tellers and then made our way possibly into operations and then into lending.”
Even many of those entering the business through an independent mortgage banker or mortgage broker have had a similar career track, starting in a back office position but working their way around into other functions, including sales.
The big problem, Williams said, is that younger people consider financial services boring. They see careers in technology or social media as sexier.
OneUnited offers its own training program for those just out of college called the Bankers Associates Program, which introduces participants to all aspects of the depository, including mortgage lending, as a way to change those perceptions.
“That’s the difference when they come in and realize this isn’t boring, actually, that this is actually a very interesting puzzle that I’m solving for folks and that it really makes a huge difference in their lives,” Williams said. “I think they start to say, I’m trying to figure this out for myself, that’s when I think that it becomes much more interesting to them.”
They see that unlike many other businesses, everyone has to interact with banking, and that also makes it an attractive career, said Williams, who had herself participated in a Bank of America career training program.
A Realtor.com study from 2021 estimated nearly 26 million Gen Zers could be in the home purchase market by 2026.
This group is more willing to take risks in order to develop generational wealth, according to a 2022 report from Gen Z Planet, which also found 87% of the age group desirous of owning a home in the future.
But nearly one-third of new-to-credit consumers, a group that Gen Z makes up a large proportion of, felt they lacked access to mortgage credit, a January TransUnion report stated. This is the perception a younger workforce could help to overcome.
A 2019 study put the average age for mortgage loan officers at 47, slightly better than a 2014 report that pegged it at 54.
The industry’s age problem can also be attributed to the aftermath of the financial crisis. The mortgage industry severely downsized after 2008, and that took a whole generation away from the business, people who didn’t come back when things picked up again, said Jeff Leinan, co-president at Plaza Home Mortgage, a wholesale lender.
“Nobody goes to college and says, ‘Hey, I want to be in the mortgage industry,’ you normally fall into it, we all have our own individual stories,” said Leinan. “But for the Gen Z crowd, if they are money motivated and they are self-starting and they have some natural-born sales ability, I think they’re going to realize they can have a very good career in mortgage banking.”
Plaza is hiring account executives, especially as more people transition into mortgage brokering from retail, Leinan noted.
“When you’re an outside salesperson, you have to be motivated to make sure and maintain the right work ethic, be available, all the things that are going to make you successful,” he continued. Toward that end, Plaza offers training, development and education, and for its inside employees, mentorship.
“I think that’s what’s really important, you can have all the drive and you can have the skill set and everything else but obviously what you’re lacking is experience,” said Leinan.
Knowing that Gen Z is looking for education opportunities, ServiceLink, a mortgage services provider, offers employees tuition reimbursement, said Folino.
“They want to continue to hone in on whatever skills they’ve developed early on in life,” Folino said.
If anything, Gen Z is “super-curious,” commented Natalie Shield, a principal in the Leadership, Change & Organization practice of Kearney, a global strategy and management consulting firm.
“They’re used to informing themselves on any topic pretty much instantaneously and so they’re really looking for that training,” Shield said. “They’re also looking for stability and security from their work.”
That might sound a little counterintuitive, but with the COVID-19 pandemic being such a defining event for this generation, it is on their minds as they approach an uncertain job market.
Gen Z is also a very practical generation and they are looking for purpose in their career choice.
“They’re looking for work that does well for them that also does good,” Shield said. “And so they want to know that they’re helping others by having a real impact and that their employer shares those values.”
That makes them ideal for a business that trumpets its role in creating homeownership opportunities, especially for those who might have thought they couldn’t own a home.
“I think giving people the opportunity for homeownership is a great example of that kind of work that links back to purpose,” said Shield.
Ironically, the financial services field in general, even with the spate of mass layoffs, is looking more stable to Gen Z than jobs in technology and social media as many major players have announced their own cuts, Shield said.
Mortgage lenders, too, must keep an open mind when vetting these young potential employees.
“We’re having difficulty recruiting, but we also have to be much more open to different experiences than the ones that we grew up with,” said Williams. “When we look at a resume, it may not look like someone that may be interested in the mortgage market or have the experience that we’re looking for in terms of banking or even mortgage lending, but yet, could be trained to be a good mortgage lender.”
That’s especially true if they possess soft skills, such as a knack for sales. “Trying to convince some of my old-school lenders to be open to a different type of experience from the younger group is another part of the opportunity we have,” Williams said.
The tech-forward generation could provide a more direct benefit to the mortgage industry. For years, the line has been when lenders have the money, they are too busy to pay attention to their tech stack. But when business slows, they lack the funds to update.
“We’re at this point right now where we have to start making more advancements,” Folino said. “Everybody wants to talk about how can I get it done faster? How can the consumer experience be better than what it is today?”
Hiring Gen Z is part of the answer. Being the first true digital-native generation, “they can bring to the table some creative ideas that those of us who have been around for 20-plus years, may not be thinking about or may not have been exposed to,” Folino said. “Their savviness with technology, with social media is something that we need to start to add into our daily lives within the mortgage industry.”
If mortgage companies want to attract and then retain Gen Z workers, “you want to leverage technology to make their jobs easier and more efficient,” said Cunningham. “They are expecting a little bit more sophistication in technology.”
The business is at a pivotal point, not just when it comes to technology, but also what the workplace should look like.
“I think they might actually help influence or change the way that those of us who’ve been doing this for a while think about what our work life should be and how many hours we’re spending doing it,” Folino said.
Still, the skills that make people successful in the mortgage industry haven’t necessarily changed.
“At the end of the day, you’re dealing with people, and you need to have people skills, and you need to be motivated,” Leinan said. “I think the fact that they are much more technology-centric is certainly a bonus, but it’s not going to be in lieu of having conversations with people and dealing with unusual problems every day.”
