Lenders are feeling the squeeze from their competitors.

According to Fannie Mae’s Mortgage Lender Sentiment Survey for Q2 2017, “Concern about competition from other lenders set a new survey high this quarter across all profit-margin drivers, cited as the key reason for lenders’ decreased profit margin outlook.”

The survey also notes that the number of lenders reporting demand growth for all purchase loans over the previous quarter is at its lowest point for any second quarter over the last two years.

With more players scrambling for a smaller piece of the pie, it becomes more important than ever for lenders to “trim the fat” by reducing expenses where they can while keeping their top performing talent satisfied.

It should come as no surprise that compensation is a key factor in attracting and retaining top talent, however, the mechanics of managing compensation for a diversified workforce can often become a cost center for lenders, especially when manual solutions like spreadsheets are used to calculate commissions and bonuses.

First, there’s the expense to consider. Most mid-sized to large lenders have anywhere from 75 to 125+ loan originators on staff spread out in branch offices across the country, and compensation plans for those LOs can vary greatly not only between branches, but even amongst LOs within the same branch. Manual solutions do little to simplify the difficulty of this situation, and as a result, lenders spend more time and money than they should to ensure this mission-critical task is executed each pay period.

Still, even the most talented payroll manager is susceptible to mistakes when the complexity level is this high, and when those mistakes occur, they, too, come at a cost to the bottom line, productivity, LO job satisfaction or all of the above.

On the opposite end, other lenders choose to restrict the number of compensation plans they offer to make the process easier to manage, but doing so puts these lenders at a disadvantage because it allows competitors to potentially hire away top talent with the lure of a more creative compensation plan.

Like so many of the problems plaguing the mortgage industry, the solution to this quandary lies in automation. Using a solution like CompenSafe, lenders can ease the burden on payroll departments while ensuring an exceptional degree of accuracy in compensation calculation and engendering more trust and satisfaction from LOs.

CompenSafe extracts real-time loan pipeline data directly from the LOS to automatically calculate commissions and bonuses and provides staff with instantaneous access to those calculations so that they can track their anticipated compensation on an on-going basis. By reducing the complexity of the process, CompenSafe enables lenders to be more creative and flexible with their compensation plans, providing a key competitive advantage.

From the outset, 2017 was predicted to be a year marked by decreased mortgage demand, and with tight inventory continuing to increase home prices, sales are going to suffer for the foreseeable future. In this period of market contraction, lenders can provide themselves with some much needed breathing room by using an automated solution like CompenSafe to calculate their commissions and bonuses…and who doesn’t like a little extra room?