Your Evolving Equipment Finance Career

Roles in our industry are changing amid increased competition, technology advancements and retention challenges.

Ask Joni Kovac what’s new in human resources at equipment finance companies these days, and she draws a long breath to answer what has become a big question. “A lot is happening here,” begins the Senior Vice President of Human Resources and Chief Human Resources Officer at Mitsubishi HC Capital America. “Since the pandemic, we’ve become more national, more hybrid and more flexible in our work model. Record low unemployment creates a very competitive and challenging hiring landscape, so instead of looking at specific office locations, we look nationwide for talent who would be a good fit, even if they can’t come into an office—and we no longer require anyone to come in five days a week.”

Val Chambers, Global HR Director at Caterpillar Financial Services Corporation, says her company has streamlined its recruiting process to adapt to the new market. “Before the pandemic, our approach was pretty consistent with each candidate; now it’s very strategic,” she says. “We’re more flexible with remote and hybrid work, we’re offering more competitive salary packages, and we’re reducing our time to respond to candidates. Moving faster was necessary, because candidates would get swooped up before we had completed our process. In some cases, we’d have to post a job multiple times.”

Creative Necessity

At a time when prospective employees are being snapped up almost as soon as they post a resume, equipment finance companies are tinkering with job requirements, expanding titles and increasing compensation, not only to catch fresh talent but to keep great employees. Hiring professionals would be loath to compare these moves to a fishing tournament, but the competition is hotter than ever to lure, land and hold onto good people, and its effects are being felt up and down the corporate ladder. 

“Today’s tight labor market continues to drive higher wages and favors the employee—even with the economic environment weakening,” says Dave Rosenthal, Senior Consultant at McLagan Aon, a compensation data provider producing ELFA’s annual Equipment Leasing & Finance Compensation Survey. Rosenthal cites 2021 as a record year for most equipment leasing businesses and says total compensation for equipment finance professionals mirrored the growth seen in new business volume. “Compensation increased 5% to 10% year-over-year across all levels,” he says.

The 2022 Compensation Survey also showed salaries increasing 2% to 3% across the business. “[But] there were cases of greater movement among originators and portfolio managers and among junior to mid-level staff, of 6% and 5% respectively,” Rosenthal says.

Jon Gerson, President of Executive Solutions for Leasing and Finance, Inc., sums up the situation: “If you can’t make an offer that is market-competitive, you’re not going to get the hire. Everyone is hiring, and some equipment finance companies are losing people to other industries. That’s something I’ve never seen before!”

“Today’s tight labor market continues to drive higher wages and favors the employee—even with the economic environment weakening.”

- Dave Rosenthal, McLagan Aon 

Moreover, Gerson says the problem doesn’t always go away if you increase the salary. “Candidates can pick whatever job they want, so recognize that you are more likely than not to be in a competitive situation with whomever you’re trying to hire,” he emphasizes. “You have to get there first and then add value: maybe your company is more tech savvy than the competition. If you’re hiring sales, maybe you’ll provide a sales assistant. You don’t even get an opportunity to win the salary discussions with prospects until you show the ‘why’ for your company; what your company does and its capabilities. The salary ends up being the bow on top.”

“You don’t even get an opportunity to win the salary discussions with prospects until you show the ‘why’ for your company.” 

- Jon Gerson, Executive Solutions for Leasing and Finance, Inc.  

Prospects and employees are also asking for more because nearly everything costs more this month than it did last. “Inflation may not continue at its current pace, but things still get more expensive and that will always be the case—and now employees are in stronger positions to negotiate,” says Gerson, adding, “Although some prices have fallen, the expectation for more money is still there, and this will have reverberations over the next three to four quarters.” 

Bob Wax, Co-President of Kingsbury Wax Bova, LLC, shares this: “Even prior to the current inflation, candidates were in the driver’s seat, with many companies having to reach the top of their salary scales and offer sign-on bonuses and annual guarantees. And still they were having to make several offers to able to secure talent.” Wax says his firm went years without candidates turning down a job offer, “but during the height of COVID-19 candidates’ decision-making process changed dramatically, and we saw more offers rejected than we had in the prior 10 years,” he says.

Chambers sees some candidates demanding higher salary packages or asking for more work flexibility before accepting the job. “At times we’ve had room to offer more in the salary range, but at other times the competition’s offer is so much higher that we just have to walk away,” she admits. “But some also come back and say they’re willing to take that lower salary if they can work remotely.”

Expanding Roles and Titles

At the same time companies are paying more, some are also asking employees to do more. “We’ve paid a lot of attention to what we ask people to do, and we now have a dedicated team helping employees drive efficiencies, improve their processes and establish KPIs for success,” says Kovac. “Everyone is being tasked to think outside the box and be more creative.”

Gerson sees companies being more open-minded about who does what, and how. “Years ago, the C-suite was much more siloed than it is today,” he says. “Now the CFO and the COO may have some overlap, and HR is viewed not just as processing payroll and benefits, but as responsible for a cohesive cultural strategy. There’s a more conscious effort to look at hiring, because companies know they have to be more proactive than reactive.” 

Chambers thinks roles are becoming more specialized as new technologies and business initiatives require niche skills. “We’re seeing more specialized jobs in our core business overall, but we’re also encouraging employees to have a variety of skills, because it makes them more effective,” she says. “Especially if they aspire to be leaders, we encourage a cross-functional experience.”

“We now have a dedicated team helping employees drive efficiencies, improve their processes and establish KPIs for success.”

- Joni Kovac, Mitsubishi HC Capital America

As job responsibilities change and grow, so do titles. “Employees are wearing a few more hats, and job titles have gotten longer to reflect this,” Kovac notes. “We’re trying to more clearly define what each person does. Everyone has access to their job description, and at year-end we ask them to look through it, make any edits and review it with their manager. Afterward, the descriptions are submitted to an HR manager so that everyone is on the same page.” 

At Caterpillar Financial Services Corporation, Chambers says employees can update their external titles to better resonate with community. “Within Cat Financial, we’re part of 100,000 employees, so we streamline titles and bucket them where it makes sense to do so. But we encourage team members to use business titles that resonate with customers, so we do a bit of both.”

Wax has also noticed titles becoming more functional and sometimes expanding for outfacing positions. “A lot of companies have internal office titles and external titles that are more descriptive,” he observes. “Employees in external-facing positions want titles that tell what they do and match against their counterparties so that they convey their level, seniority and functional importance within their respective organization.” But Wax also says few people focus solely on their title. He observes, “A title with compensation that’s not marked to market is like owning a reservoir without water in it.” 

“We’re seeing more specialized jobs in our core business overall, but we’re also encouraging employees to have a variety of skills.”

- Val Chambers, Caterpillar Financial Services Corporation

Finding Flexibility

Compensation may be king, but flexibility in other aspects of employment is also becoming vital. Rosenthal says banks and financial services companies are typically less flexible in remote work arrangements than other industries. But in other ways, openness to change appears to be on the rise. “I’m seeing more clients ask how to develop a culture for new employees in this hybrid environment, and how to mentor and train those who aren’t working side by side,” says Wax. “The situation varies from company to company, and some CEOs still want everyone to march to their drum. But I suspect companies that don’t have this kind of flexibility won’t survive,” he adds.

But there are many ways to change with the times. Kovac mentioned cross-training, and Gerson says he’s seeing a return to the practice. “Before the Great Recession, I saw clients investing less in this, perhaps because they feared that too much development would result in employees being taken away,” he says. “But now I’m starting to see some companies say, ‘What are we missing here? Maybe we need to start cross-training again.”

Caterpillar Financial Services Corporation demonstrates innovation by implementing technology into the company’s recruiting process. Says Chambers, “We use LinkedIn and Gartner’s Talent Neuron platform to identify and track hiring trends.” And by tapping new markets, the company has enlarged its talent pool. “We’re working with the Chamber of Commerce and the local military base to attract people who are transitioning and interested in industries like ours,” says Chambers. “We’ve been doing apprenticeships with members of the military, and we’re working with a third-party company that screens and readies neuro-diverse talent for jobs.”

As Chambers explains, “Neuro-diverse talent have neurological conditions at various levels of the spectrum with autism or dyslexia,” she says. “Their strong skills in pattern recognition and mathematics are a valuable asset for our business.” Chambers says Cat Financial has initially hired neuro-diverse talent into IT roles and hopes to expand this into other areas of the business.

The Tech Effect

Chambers’ comments prompt another question: Is technology’s growing role at equipment finance companies resulting in more or fewer hires overall? Answers vary. “If equipment finance companies are hiring fewer employees, it’s because there are fewer employees,” asserts Gerson. “It doesn’t matter who you are or where you are. You’re hiring fewer employees because you simply cannot find them.” 

Wax thinks about the future. “I believe technology will change the method of delivering product and reduce the cost of transactions,” he says. “To the extent that companies become digitized and use AI, those in the industry will become skinnier, positions possibly morphing into technology positions.” But Wax says he hasn’t seen downsizing today, and notes instead “a large shortage of experienced, highly trained professionals” in the originations area.

“I’m seeing more clients ask how to develop a culture for new employees in this hybrid environment.”

- Bob Wax, Kingsbury Wax Bova, LLC

Kovac describes a different scenario. “We’ve definitely reduced the number of jobs we’ll fill because of technological improvements, but we’re still growing in headcount—just not as fast as we could be,” she says. “This is not to say our net income doesn’t increase, because we’re doing more with less,” she adds. “By focusing on operational excellence, we’re continually looking at processes and actively tackling inefficiencies.”

Chambers says a greater focus on technology has actually increased headcount at Cat Financial, especially in the IT department. “While we’re using more platforms to do things more efficiently, we’re also seeing growth in IT, particularly around digital support for customers and cybersecurity,” she says. “New job titles include Data Scientist and Digital Scientist, which weren’t part of our vernacular a few years ago. Headcount has increased to handle the additional security risks and threats that accompany growing the business.” 

At the same time, though, Cat Financial has seen growth in new business initiatives to support increased headcount. Says Chambers, “We’re seeing more of a shift to support functions in IT, accounting and digital positions this year, and I expect that to continue.”

Concluded one source, “The power is with the people, and it’s a difficult play with talent.” In fact no one interviewed for this story expects the employment situation to change measurably in 2023. But that’s a story for another time.