Private lenders who invest in strong HR foundations improve hiring, ensure regulatory compliance, and create a competitive workforce.

Your business is growing. Now what?

Managing human resources can be overwhelming, especially for smaller private lending firms. Between hiring, compliance, payroll, and employee relations, there are many moving parts.

Keep in mind, however, that a well-structured HR strategy doesn’t just keep you compliant; it also helps you build a thriving workplace that attracts and retains top talent.

Here are some of the most important considerations to keep in mind as you develop your HR strategy.

Hire Smart

One of the most critical aspects of HR is hiring the right people. The success of your business depends on building a team that aligns with your goals and culture.

Hiring professionals with underwriting experience, risk analysis skills, and familiarity with regulatory compliance specific to private lending is crucial. Underwriters, loan processors, and asset managers with direct experience in private lending ensure the team understands the nuances of risk management and loan structuring. A well-rounded team should also include compliance officers who stay ahead of licensing and lending regulations.

Craft Clear Job Descriptions. Define the role’s responsibilities, expectations, and qualifications to attract the right candidates.

Follow a Structured Interview Process. Standardizing interview questions helps reduce bias and ensures fair evaluations.

Conduct Background Checks. Verifying employment history and credentials minimizes hiring risks. Also be sure to request references and contact them.

Use Offer Letters & Contracts. Clearly outline employment terms, compensation, and expectations in writing.

» Tip. Use an Applicant Tracking System (ATS) to streamline your hiring efforts and to keep records organized. At a minimum, keep a list of everyone who applies for each position. You will be growing your company and will want to know “Bob” applied a couple years ago for X or Y position. Include details such as their name, the position they applied for, when they applied, and the steps you went through with them. You can include observations such as whether they were rude on the phone or whether they showed up to the interview—you get the idea.

Set Employees Up for Success

A structured onboarding process helps new employees integrate into the company smoothly, boosting retention and productivity.  Provide clear expectations, training, and resources during the first 90 days.

Make sure your employee handbook outlines your policies about behavior, attendance, benefits, and company values.

Ongoing training is critical. Investing in skill development and compliance training (e.g., harassment prevention) leads to a stronger workforce. For private lending companies, training should include industry-specific topics such as borrower due diligence, fraud detection, asset-based lending principles, and federal and state lending regulations. Private lenders should ensure loan officers understand financial modeling, credit risk assessment, and the legal framework surrounding secured and unsecured loans.

» TIP. Schedule regular check-ins during an employee’s first three months to ensure a smooth transition. Small gestures such as saying, “You made it through the first day/week!” go a long way to make people feel welcome. Send an email companywide introducing the new employee. No one likes being the new kid on the block.

Offer Competitive Payroll and Benefits

Ensuring employees are paid correctly and have access to benefits is crucial for both compliance and retention.

Make sure to process your payroll accurately. Late or incorrect payments erode trust. Use payroll software to ensure

compliance. There are plenty of reputable and affordable platforms available. If it makes sense, consider outsourcing your payroll.

Performance-based compensation models such as commission structures for loan originators, bonus incentives for portfolio managers, or profit-sharing for executive teams can be effective in private lending firms. Additionally, retention programs like continued education stipends for financial certification (e.g., CFA, CML) can enhance employee engagement and expertise.

Although health insurance isn’t required for businesses with fewer than 50 employees, offering benefits can enhance retention. HRAs (Health Reimbursement Arrangements) and stipends are viable alternatives to a traditional health care plan. HRAs are a group health plan that an employer funds. Employees who are enrolled in individual health care plans can use the money to pay for qualifying medical expenses throughout the year, helping to offset deductibles and other expenses.

Paid time off is important to employees. Be sure to clearly define sick leave, vacation days, and unpaid leave policies.

» TIP. Non-traditional benefits like flexible schedules or professional development stipends can set you apart. You can also keep a kitchen stocked with healthy choices: fruit, pistachios, and bars low on sugar and fat. Employees also appreciate a “grab-and-go” opportunity such as bread, ham, and cheese to make a quick sandwich, especially those who are in and out seeing clients.

Avoid Costly Mistakes

Employment laws can be complex, and failure to comply can result in lawsuits or fines. Following are the most critical laws small business owners should be aware of. Keep in mind this list is not exhaustive. Be sure to consult with an employment attorney or HR consultant to minimize noncompliance and manage your risk.

The Fair Labor Standards Act (FLSA) sets minimum wage and overtime rules. It’s important to ensure employees are classified correctly as either exempt or non-exempt.

The Family and Medical Leave Act (FMLA) requires businesses with more than 50 employees to offer up to 12 weeks of unpaid leave. Even if FMLA doesn’t apply to your business, be sure to check state-specific leave laws.

The Occupational Safety and Health Act (OSHA) requires employers to provide a safe work environment. You should conduct regular safety training and maintain an injury log.

The Equal Employment Opportunity (EEO) laws prohibit discrimination based on race, gender, age, disability, and more. Establish clear anti-discrimination policies and apply them consistently.

Workers’ Compensation laws provide benefits to employees injured on the job. Ensure you have the insurance required in your state.

Immigration Reform and Control Act (IRCA) requires employers to verify employees’ work eligibility with Form I-9.

» TIP. Conduct regular HR compliance audits to identify potential risks before they become legal issues. Of course, you can ask OpenAI anything these days, but just as businesses are cautioned about using generic HR templates available online, be careful about relying solely on these sources. State and local nuances can still trip you up. Get to know a labor law attorney you can have on speed dial for those moments where you are not sure how to proceed.

Besides adhering to employment laws and regulations, private lenders must ensure strict adherence to financial industry regulations such as fair lending laws, anti-money laundering (AML) requirements, etc. HR teams should work closely with compliance officers to monitor adherence to lending laws, ensuring all employees are properly trained in consumer protection regulations.

Create a Positive Workplace Culture

Strong employee relations lead to better engagement, performance, and retention. More than just avoiding conflict, creating a workplace where employees feel valued and connected to the company’s mission is essential.

A lending firm’s culture should emphasize trust, integrity, and financial responsibility. Encouraging collaboration among loan officers, underwriters, and risk analysts helps ensure a thorough loan assessment process. Establishing clear ethical lending guidelines reinforces your firm’s reputation in the industry.

So, how do you create such an environment?

Start by fostering open communication. Doing so creates an environment where employees feel heard and valued.

Rather than relying solely on annual performance reviews, provide consistent real-time feedback and development opportunities.

Also important? Establish a structured process for handling disputes. It should include acknowledgement of the issue, procedures for investigating the issue, a plan to resolve it, and monitoring progress.

No matter how high-functioning and coalesced your team is, conflicts will arise. Addressing conflicts, grievances, and complaints promptly, fairly and uniformly acknowledges employees, demonstrates they are taken seriously, and shows commitment to listening to employees’ concerns. If necessary, call in an outside HR resource to help you handle these types of issues.

If you have not already done so, define your company mission, vision, and values. Ideally, include employees in this process so they feel ownership of the process and outcome. At the very least, employees should understand what your business stands for and how their role contributes to the bigger picture. Importantly, include how your company’s mission, vision, and values will be demonstrated every day. This should not be an exercise that results in an archived computer file.

Keep in mind that every employee represents your company, from their interactions with customers to their social media presence. Ensure

they act as brand ambassadors who align with your company’s values and strengthen your brand.

» TIP. Employee engagement surveys can reveal valuable insights into workplace morale and how connected employees feel to your company’s mission. The Gallup 12 is a great place to start. It’s a 12-question survey Gallup came up with after conducting surveys with millions of employees across thousands of companies around the world.  They determined those are the best 12 questions to measure the key factors that have been consistently found to influence employee engagement and organizational performance.

Automate for Efficiency

HR technology can save time and reduce paperwork while improving accuracy.

There are many software platforms that can assist your private lending firm with payroll and benefits. Look for the one that fits your needs in terms of number of employees and your budget. Importantly, choose a platform that offers scalability as your company grows.

Likewise, investigate digital tools that can help you with time tracking and scheduling. Implementing these tools into your workflows helps prevent time theft and ensures compliance.

Finally, investigate portals that allow employees to update their own information, reducing administrative burdens.

» TIP. Automating HR functions with industry-specific tools can improve efficiency. Loan origination systems (LOS) that integrate with payroll software can streamline commission-based pay structures for loan officers. Additionally, implementing AI-driven risk assessment tools helps HR monitor employee performance and workload balance.

HR Is a Business Growth Tool

HR is more than just hiring and compliance—it’s a strategic function that can drive business success. Many business owners see HR as merely administrative, but it plays a crucial role in shaping company culture, enhancing productivity, and ensuring long-term sustainability. Businesses that view HR as a growth tool rather than just a compliance function gain a significant competitive advantage.

When employees are connected to a company’s mission, vision, and values, they become stronger advocates for your business, ensuring a consistent and positive brand presence in every customer interaction. Investing in HR is investing in your company’s future.

In private lending, HR plays a critical role in fostering a risk-aware, compliance-driven culture. By hiring professionals with lending expertise, implementing thorough training, and leveraging technology to streamline processes, private lenders can build a team that not only meets regulatory requirements but also drives  business growth.