Hiring Mortgage Brokers: Employed vs Self-Employed

As we step into 2024, mortgage brokerages are facing a new set of challenges and opportunities. 

Since the 2020 pandemic, the landscape of work has evolved dramatically, and with these changes come crucial decisions for business owners, particularly in the mortgage brokerage sector. 

One such decision is whether to hire employed mortgage brokers or self-employed mortgage brokers. This choice can significantly impact your business’s flexibility, cost structure, and overall success.

In this guide, we’ll explore the pros and cons of each option, helping you navigate this important decision.

The Case for Hiring Employed Brokers

employed mortgage brokers

The stability and consistency offered by employed brokers is more valuable than ever. 

With the economic landscape constantly shifting, having a dedicated team can provide the steadiness needed to navigate uncertain times.

Here are the biggest advantages of employing in-house mortgage brokers for your brokerage.

Advantages of Employed Brokers

  • Steady Workforce: Employed brokers offer a stable and reliable workforce, which can be crucial for maintaining consistent service levels and building long-term client relationships.
  • Brand Loyalty and Development: Having employed brokers allows for a stronger company culture and brand loyalty, an essential point of separation in today’s competitive market.
  • Streamlined Management: Managing a team of employed brokers often leads to more streamlined operations, as you have more control over work schedules and processes.

Challenges with Hiring Employed Brokers

However, this model isn’t without its challenges. The financial and managerial commitment to employed brokers is significant and requires careful consideration.

The two key drawbacks with hiring in-house are:

  • Higher Overhead Costs: Employing brokers means additional costs such as salaries, benefits, and contributions to taxes and National Insurance.
  • Less Flexibility: Employed brokers may have less flexibility in their schedules, which could impact your ability to offer services outside standard business hours.

The Benefits of Self-Employed Brokersself employed mortgage brokers

The flexibility of self-employed brokers is an attractive proposition. They can provide agility and adaptability, which are crucial in responding to market changes and client demands.

Here’s why self-employed brokers might be the ideal way for you to grow your brokerage:

Advantages of Self-Employed Brokers

  • Adaptability to Market Changes: Self-employed brokers can quickly adapt to changing market conditions, providing your business with the agility to respond to fluctuating demands.
  • Diverse Skill Sets: They often bring a range of experiences and specialisations, adding value to your service offerings.
  • Cost-Effective Scaling: This option allows for scaling your workforce up or down without the long-term financial commitments associated with employed staff.

Challenges with Hiring Self-Employed Brokers

Relying on self-employed brokers can also present its own set of challenges, particularly in terms of consistency and control over service delivery.

  • Less Control: You have less oversight over the working methods and standards of self-employed brokers.
  • Inconsistent Availability: Self-employed brokers may juggle multiple clients, which could affect their availability and response times for your projects

Making the Right Decision for Your Brokerage

Your decision should be informed by a thorough analysis of your business’s current needs and future aspirations. Consider factors like workload consistency, financial flexibility, and long-term strategic goals.

  • Business Model and Volume: Consider your business’s operational model and the volume of work. Employed brokers might be better for steady, high-volume workloads, while self-employed brokers can handle fluctuating demands.
  • Budget and Financial Goals: Analyse your financial capacity. Employing brokers involves more fixed costs, whereas hiring self-employed brokers can be more variable and performance-based.
  • Long-Term Business Strategy: Think about your long-term goals. Do you value building a consistent team and brand, or do you prefer the agility and diverse skill sets of self-employed brokers?

Hiring Mortgage Brokers: Employed vs Self-Employed

In 2024, the decision to hire employed or self-employed brokers is a strategic choice that can shape the future of your business.

By understanding the advantages and challenges of each option, you can make a well-informed decision that aligns with your business objectives and positions you for success in the evolving marketplace.

Taking Action

If you’re committed to hiring high-quality, behaviourally suited talent, let’s connect and discuss how we can redefine your recruitment process, ensuring each new hire is not just an addition but a lasting asset to your mortgage business.

If you’re seeking a new role, or are searching for new talent, please click on the appropriate link to book a call with me today.

nadia knight

The UK Mortgage Broker
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