Smith, who founded mortgage company SouthStar Funding with Brian Smith, Mike Fierman and Tyler Wood, did so with the idea that if you form close personal relationships with your employees and clients, you will keep turnover low and encourage repeat business.
“We’ve always believed that you have to differentiate yourself with the service that you provide,” says Smith, president of SouthStar. “That is the one thing that we feel like we can do consistently, day in and day out.”
The company’s motto, “It’s always personal,” has been SouthStar’s backbone and propelled the company to rapid growth. Its revenue has increased from $60 million in 2002 to $144 million in 2005, and the number of employees has grown from 270 to 828 during that time. It has also been named one of the best companies to work for three years in a row by a local publication.
Smart Business spoke with Smith about his unique hiring procedures and how he creates a positive corporate culture.
How has hiring people from outside the mortgage industry helped you grow?
We say we want to be different than everybody else. If we hire everybody else’s employees, it’s pretty hard to maintain that differentiation.
When you bring people in from competitors, they typically have a preconceived idea on how they are supposed to do their job and how the industry works. Sometimes people struggle when they come here from other companies because they are not used to they way we do business because it is a little unique.
Underwriters, for example, are the decision-makers (and they) talk directly to the customers. Most other mortgage companies don’t allow that.
We’ve also found that both salespeople and administrative employees who come to us from other mortgage companies are 2.5 times more likely to leave than people who come to us with no mortgage background. Our goal as a company is to experience less than 10 percent turnover in any one year. The industry standard is somewhere between 25 and 30 percent.
If we continue to want to get our turnover down, we’ve found that most times, we’re better suited to hire people without experience and then train them on the way we do things.
How do you find employees?
We have a very active program for employees to refer friends and family. We like to hire people who our employees are recommending to us. They must be pretty good, or people wouldn’t be referring them to us because that would be a negative reflection on them if they didn’t perform.
It also works vice versa. The person coming in obviously wants to do well because someone has stood up and vouched for them. In addition to that, we do a lot of college recruiting.
How do you create a good work environment?
About half of our marketing budget is spent on marketing to our existing employees, as opposed to external customers. We spend as much money on making our employees happy as we do on making our customers happy.
We take a customer trip. Everyone in the company is invited. We go to a beach location. We have done this six years running. The company pays for the airfare, the hotel, typically they are all-inclusive. We take it on a holiday weekend and then close the office one additional day, so it’s typically a four-day event.
We do quarterly socials where people get out of the work environment, and we’ll go to ball games, bowling, trivia contests you name it, we’ve done it. The idea is to try to get people to know each other in a social setting.
We have a profit-sharing plan where we take 5 percent of the company’s profits, and that goes directly into everyone’s 401(k) a couple months after the end of fiscal year. People get birthday cards, birthday gifts, anniversary gifts. We’re constantly focusing on ways to make the environment for our employees a fun one. The idea is if they like working here, they won’t want to leave.
As you continue to add employees, how do you incorporate them into SouthStar’s corporate culture?
Any new employee who starts with us, their first day is in Atlanta at a two-day orientation. They hear from the managers on what our values are, what’s important to us as a company.
Hopefully, we make them more comfortable with who to go to if they have issues and problems. Many of our employees start off immediately after the orientation in a training program.
When anyone comes into our company, they are assigned a mentor. The mentor spends a lot of time with the individual, making sure they understand how we operate as a company. They’re there to answer any questions, they’re there to go to lunch with them and kind of be their pal for awhile until they’re incorporated into the culture.
HOW TO REACH: SouthStar Funding, (866) 350-2302 or www.southstar.com