Mortgage broker capacity planning

Capacity is the question every growing brokerage answers badly, usually twice. First by hiring too late, so service degrades and the firm loses business it already paid to acquire. Then by hiring too much at once, so costs jump ahead of revenue just as the market turns.

The way out is not clever forecasting. It is knowing three numbers about your own firm and watching two warning signs.

The three numbers

How many hours a case actually takes. Not the adviser's guess. Sample it: pick fifteen recent completions across different types and estimate, honestly, the total time spent by everyone on each. You will get a wide range, and the range is the interesting part. A straightforward employed remortgage and a self-employed purchase with adverse credit are not the same product and should not be planned as though they were.

Productive hours

How many productive hours a person actually has. A full-time adviser does not have thirty-seven hours of case work. Subtract holiday, sickness, training, internal meetings, admin that belongs to no case, and the genuine dead time between appointments. Most firms who measure this find the realistic figure is well under thirty, and lower again for anyone with management responsibility.

Completion rate

What proportion of started cases complete. Capacity is consumed by cases that never pay. If a meaningful share of your applications fall through, your advisers are carrying substantially more load than your completion figures suggest.

Multiply and divide and you have a rough capacity per person per month. It will be wrong in the third decimal place and right enough to make decisions with.

The two warning signs

Time to first contact stretching. This is the earliest signal of all, because when people are stretched the thing they drop first is the enquiry that has not yet become a case. Watch the median, weekly.

Time from fact find to submission stretching. This one tells you the back half of the process is saturated. It usually means administrative capacity, not adviser capacity, and hiring another adviser at this point makes it worse.

Both of these move weeks before revenue does, which is what makes them useful. Conversion rates and completion counts are lagging indicators; by the time they drop, you have already lost the quarter.

Seasonality and lender behaviour

The mortgage market is not flat across the year. Purchase activity has a recognisable shape, remortgage and product transfer volumes follow the maturities in your own back book, and both are disrupted by rate movements that nobody can schedule.

You have better information about the second of these than you probably use. Your existing clients' product end dates are known. Pull them by month for the next two years and you have a genuine forward view of one part of your workload, which is more than most firms have about anything.

Lender service also drives capacity, indirectly but powerfully. When turnaround times lengthen, cases stay live longer, pipelines swell, and the volume of client updates and internal chasing rises even though nothing new has come in. Plan for the pipeline you are carrying, not just the cases you are winning.

Sequence your hires correctly

The most common capacity mistake in brokerages is hiring an adviser when the constraint is administrative. It is an expensive mistake, because a new adviser adds cases to a back office that is already the bottleneck and everybody's service gets worse.

Work out where the queue is. If cases are waiting for someone to package and submit them, the constraint is behind the adviser. If advisers have free diary slots and there is nobody to put in them, the constraint is at the front — and that may be a lead generation problem rather than a capacity one at all.

A rough rule that many firms arrive at independently: administrative support scales roughly with case volume, adviser numbers scale with qualified appointment volume. They do not move together, and treating them as a fixed ratio produces the wrong answer at least half the time.

Options that are not hiring

• Reduce cases that consume capacity without producing revenue, by qualifying earlier and more honestly.
• Outsource packaging or case progression to a specialist firm on a variable basis, which converts a fixed cost to a variable one.
• Use part-time or term-time staff, which suits administrative work well.
• Bring forward the review conversations that are already in your book, since existing clients convert far more efficiently than new enquiries.
• Remove work rather than adding people. Most firms have at least one process step that exists because it always has.
• Fix the rework. If a fifth of your applications come back with lender queries, a chunk of your capacity problem is self-inflicted.

That last point deserves emphasis. Firms reach for headcount when their real problem is that work is being done twice.

Plan for absence, not just for growth

A firm at ninety per cent utilisation has no capacity to absorb a two-week absence, and absences are certain rather than possible. Building in slack feels wasteful right up to the week somebody is off unexpectedly and four clients get no updates.

Decide in advance who covers whom, and make sure the covering person can actually see and act on the cases. Cover that requires a login nobody else has is not cover.

Timing a hire

New advisers take months to become productive, longer if they need to build a pipeline. New administrators are productive faster but still need training on your systems and your standards.

That lead time is the argument for hiring on the leading indicators rather than the lagging ones. If you wait until the numbers prove you need someone, you will be short for a full quarter after that.

Set thresholds in advance. When time to first contact exceeds a defined figure for three consecutive weeks, start recruiting. Deciding the trigger while calm produces better decisions than deciding it while drowning.

What to review quarterly

Cases per adviser, split active and waiting. Time from fact find to submission. Utilisation against your realistic hours figure. Product end dates falling in the next two quarters. Rework rate. Absence cover gaps.

Six numbers, twenty minutes, four times a year. That is the whole discipline, and it is enough to avoid both of the expensive mistakes.