Lessons Learned in the Search Business

We've learned our fair share of lessons after 25 years in the search business. Some were learned the hard way, many times more than once. Save yourself time and trouble by heeding these tips.

• The best indicator of future performance is present & past performance. The shrinks refer to it as direct behavioral observations. We call it the Duck Theory: “If it walks like a duck...”

• Direct observations are better than inferred ones. The fact that John describes himself as a “people person” is encouraging. However, if he frequently slams his co-workers and supervisors during the interview process, it’s probably not true.

• “How did...” trumps “How would...” Hypothetical questions tell you what a candidate might do, whereas behavioral questions... focused on past actions... yield what they actually did. One is fiction until proven to be fact; the other is just plain fact.

• Recency, Recency, Recency. Like the adage "location, location, location" the best history is recent history. What someone did five years ago is less important than what they did last year.

• Rarely is anyone as good or bad as we think they are. Also known as the “divide by two...or three” rule.

• Everyone has hot-buttons which skew their objectivity, i.e. the attributes we like to see in people. Recognizing yours will help maintain objectivity.

• Never make a hire / no hire decision based on any one thing, whether it is an accomplishment or failure, praise or criticism, good or bad reference.

• If you don’t know what you are looking for, how will you know when you find it? The better you define what success should look like in a position, the easier it will be to assess those abilities in others.

• The more comfortable both parties are during an interview, the more open and authentic each will be. That means no more trick questions or acting like an armchair psychologist. Give candidates an outline of what to expect as well as “permission” to flip a question back to you at anytime, or to ask one of their own. (Learn more in our post The Naked Interview.)
  

• The interview and hiring process should be like a courtship: it starts with Attraction (dating), evolves into Assessment (learning about each other) and concludes with Acceptance (proposal). And like a marriage, it takes Adaptability & Alignment of expectations on both sides to make it work over the long haul.

• If a candidate needs more than 24-48 hours to accept/decline an offer, then something in the prior statement was not handled correctly. An effective interview process comprises more than one visit and plenty of opportunities for both sides to learn about each other. The decision should be pretty clear by the time an offer is made. Taking longer than a day or two will not make the decision any clearer or easier. Imagine proposing to your spouse and hearing “I really appreciate the offer. Do you mind if I take the weekend to think it over and get back with you?”

• Counter Offers tend to be short-lived solutions. Case in point: employee resigns in order to pursue another opportunity. Employer offers him a raise, bonus or promotion to entice him/her to stay, but never forgets how the employee leveraged the situation to his/her advantage. The relationship is never the same. It’s also a poor way to go about getting a raise or promotion. Historically, the relationship sours within twelve months and the statistics bear this out.

FDIC Employment & Acquisition Opportunities

Similar to the RTC days, the best avenue for real estate professionals to secure gainful employment in the near future might be with the FDIC. To date, the Fed has given banks a long leash to curtail an onslaught of failures; hence, the "extend and pretend", "pray and delay" monikers. As the economy shows signs of strength, the Fed will begin flexing it's regulatory muscles and require banks to address the deals they've been nursemaiding for so long.

Until those assets are re-traded, no one knows for sure what the total impact will be. However, when you consider there's an additional $2 trillion of commercial real estate debt due to reset between 2011-2013, half of which is valued less than what is owed, it doesn't look good. Clearly, the FDIC is faced with becoming the largest REO owner and employer in the nation. So, if you're in the job market or looking to acquire real estate assets at great prices, get ready.

The Hiring Side- "We've Only Just Begun"

The FDIC is hiring. And, like the old Carpenters' hit, it's just the beginning. In addition to the FDIC, there are the 100+ third party contractors (known as RAC's) who have contracts to support the FDIC's asset management and disposition activities. Many of them will need specialized talent, too. Some of the candidates will come from banking, some from real estate, some from other industries altogether. To see a complete list of third party firms by industry segment, check out the FDIC Receivership Assistance Contractor list.

Applying to the FDIC for an opening is no slam dunk. A separate online application must be completed for each position. Don’t make the mistake of applying for one position thinking the FDIC will consider it for other openings, regardless how similar they might appear. You must submit a separate application for each position of interest. It’s time consuming, but necessary. Some tips on completing the applications:

• The FDIC uses a scoring system to determine fit with a position. It is important that the language in your resume and the your answers on the application match as closely as possible to the job description. For example, if the job description requires “entitlement” experience but you use the term "approvals" in your resume, it may not receive as high a score. Certainly, don't embellish; just make sure you’re speaking the same language. This might mean rewriting your resume to better match the each opportunity.
• A background check will be required on each application as well, but you can copy and paste much of the information to speed the process up. Park the answers (in order) on a separate document as you complete the first application, the go back to it on additional applications.
• If you have any prior experience with the RTC, banks or federally approved workout firms (RAC's), be sure to note that; it is considered a huge plus. Again, don’t assume the folks at the FDIC will recognize a company’s name and draw the right conclusion; instead, spell out the relationship, duties or role. Learn more about the application process.

The interview process itself is rather impersonal. Once your application has been approved for consideration, a brief phone interview is conducted with someone at the FDIC. Assuming the visit goes well, a conditional offer is made subject to final approval and completion of your background check. Don’t be surprised if you are formally hired before you ever meet the person who will be your supervisor.

Good news on compensation: the FDIC is paying market rates. Depending on the position applied for, qualifications and compensation history, the base salaries can range from $100-175k, plus bonus incentives and/or overtime. Each position has a defined compensation range (e.g. $105-125K). The initial offer will always be made at the lowest number; however, if payroll history is supplied demonstrating you are accustomed to making more than the low end, the local office has the option of increasing the offer by up to 25%

FDIC Careers posts positions currently available directly with FDIC offices nationally. Click on View All Vacancies to see the full gamut of needs. To search opportunities with both the FDIC and it's approved contractors, go to Indeed.com. Enter FDIC in What field and City or State in the Where fields.

The Buy Side: Acquiring Assets

The FDIC has a history of selling their assets at 94% of appraised value regardless of what the previous value of the asset was. Obviously, the key driver in the deal will be the appraisal. Given recent challenges in quantifying property values, this could be deal breaker for either side.

FDIClistings.com is a good site to start looking for potential deals. Prescient and the other asset managers have more than 1000 brokers that will list assets on behalf of the FDIC so look through local channels as well.

The Roseview Group works on various bank assets prior to the FDIC getting their hands on a bank. When they dispose of assets, they are interested in the following from a buyer: surety of execution, a desire not to be re-traded, an interest in not being nickel and dimed, a buyer that has a target asset in mind, and someone that will purchase without reps and warranties.

Asking for a list of all assets "for sale" is usually ignored. The RAC's get thousands of tire kickers and they ignore most of them. The surest way to get their attention is to have one troubled asset acquisition under your belt, and a specific new acquisition target or pool in mind.

NOTE: We'll continue to update this post with additional information so be sure and check back.