Susan Gibson: [Recruiting, training and retaining excellent staff] is an essential topic for microfinance programs because without the staff to deliver the product, it’s very difficult to bring in the customers. You must have well-motivated staff who are really interested and passionate about their work. There are several things that microfinance organizations and institutions can do in order to motivate staff.

The first two pieces of this puzzle, recruiting and training, are the easy bits. Retaining the good staff is the hard one. This requires keeping a really positive work environment. This issue also ties into sustainability. You can not have sustainable programs unless you have great staff who are really committed to the program. Training staff and getting them familiar with all the issues takes a long time. It’s just like a client, you do not want to get a client and give them one loan, and they disappear on you. [Recruiting, training and retaining excellent staff] is really important for institutions to take seriously: how to go about and recruit the right people. It’s very interesting how many people are hired to do the wrong job.

This is a business of making loans. We lend to people because they have the capacity to repay, not because we feel sorry for them. People often hire social service workers to make loans. It is not a very good combination. How do we get around that issue? [The answer lies] with the training. We make the expectations up front right away: this is business and it is hard work.

Some tricks that I found about this are when I interview people to run programs, I do not ever interview them in the office. When they come all [well-dressed,] I say, “Well, we’re going to Coronation Market,” (this is in Kingston, Jamaica). They look at you as though something is wrong with you. They say, “But there’s crime down there,” and I say “that’s where we’re going to do our microfinance program.” You can save yourself an incredible amount of time, and you can also learn whether that person is well-suited to the job. So we will get on the bus; I would not even take them in a vehicle because I expect they will take the bus everyday. I want to see if they have bus fare. If they do not have it, they are not accustomed to taking the bus; we might have a problem right up front.

Secondly, I look at their shoes. Quite often, some will say to me, inevitably, “I got mud on my shoe.” “Right, then you should have shoes that are mud resistant.” It is so important to hire the right person for the right job. How often do we hire the wrong people to do the wrong job? After this exercise, I often say, “Go and talk to clients, go and talk to potential clients and say you have a microfinance program, or find out about their activities.”

It is interesting how many times people come back and say, “Well, what will I say to them?” This is not something you can train people. They either feel comfortable with the potential clients or they don’t. If they do not feel comfortable, you can save yourself an incredible amount of grief without going through a long process and finding out later on why your payments are having a problem coming back. It’s probably because the credit officer is not out in the field enough.

When I look for people, I usually go to the local university or a similar place. Anybody who has banking or insurance experience I immediately turn down because they have preconceived notions about this business; they are paper-oriented. This business is not about paper; it’s about relationships. Do you have the right type of person who can build relationships? That is not a skill you can teach. You can foster a good environment for that, but you cannot teach someone how to be interested in the client’s activity, or how to generally care about the client improving his or her business.

Are they animated, good presenters? That is always a good skill. If you have someone who is out there trying to sell your program, and they do not have the qualities of a sales-man about them, it would be very hard because, a lot of times, we’re selling a new idea. If you have a good way with people and you can sell an idea, then this is a great skill. If they lack any banking or financial experience, it does not make any difference. They can easily learn this. It’s the personality.

It is helpful if the loan officer has something at stake in his or her community. This brings me to the point about ex-pats and these programs—bad combination. In order to build ownership, you find local people who are committed to their programs. And if it fails, it fails. But it’s because for some reason, something didn’t work in the community.

When an ex-pat manages one of these programs, it doesn’t have a long-term sustainability factor because when that person leaves, all sorts of problems can develop. Anytime I have been involved in programs, I leave before the first loan is made so that the program belongs to the people. It is important that people feel the program is their responsibility, and its okay to make mistakes but they [should] learn from their mistakes. If an ex-pat is there, what you always hear is, “Oh well, she told me to do it like that, so that’s why it failed.” You have to make sure that the people who are involved in the program take responsibility. If they make a mistake, fine, fix it. With the involvement of an ex-pat, you have a different kind of relationship. You can have ex-pat involvement, but it should last usually for a week or two. Even if it’s for designing programs, I work with the people and I do not make the decisions. I facilitate in the decision-making process; there is a very big difference.

Being in the field is not an easy job. So the work environment at a microfinance program becomes extremely important. I’m sure you have all been in the marketplaces; after four or five hours, it is pretty exhausting. Make sure that there is a lot of positive reinforcement in the work place. There are a lot of incentives for staff to continue doing a good job.

I heard about the five reasons why people leave their jobs; this was a survey that was done out of North Carolina—Why People Leave Their Jobs.

The pay is the fifth reason, last reason on the totem pole. But the first reason was the work environment. So in this business, especially, if people’s work environment is negative and they feel that what they are doing lacks value, you have lost them right from the beginning. This is a big problem, whether you work at a large multi-lateral donor or a small organization, the work environment is something that management can control. That’s an interesting number one reason why people leave their work.

Number two, recognition—the person does not feel appreciated. How often is that the case, when you’re really upset about something at work? It’s not usually the paycheck; it’s usually somebody didn’t recognize you properly, or you feel that somebody else took the credit. Recognition is easy to give. It’s the positive reinforcement over and over again that becomes really essential for these types of programs.

The third reason people leave is that there are too many obstacles without sufficient resources to overcome [them]. When you belong to a large bureaucracy, you have so many obstacles to overcome that you are not doing the work that you wanted to do; you are worrying about the obstacles. When you think about the people that you work with in the organizations, think how you can remove obstacles and lessen them and how you can give resources to overcome them so people can focus on the task that they were employed to do. Think about things like that because people want to attach value to their work.

The fourth reason is that there was not enough training and advancement opportunities. People did not believe that there were opportunities to improve their skills—whether language skills, management skills, time management skills—and that they did not have the opportunity to advance in the system.

The fifth reason did relate to pay, but pay tied to incentives—pay representing the work that you did. Now this is a big challenge for microfinance institutions. But some of the ones I have seen pay with bonuses. ADEMI, in the Dominican Republic, Pedro Jimenez has line-ups for people to work at his organization. Everybody gets bonuses, the office boy, the driver, whoever’s involved in this program is part of the team and they all receive bonuses, depending upon their success. So it is a very interesting concept and I know it’s controversial because people feel that we are doing this for poor people. However, you want to make sure that you motivate your staff. Nobody leaves this organization [ADEMI] because they are happy in their job, they get paid well to do it, and they do not have a lot of obstacles. It’s very interesting to look at organizations with low turnover.

Training needs to be very experiential. [For many microfinance programs], basically you learn by working in the field. There’s no other way. All training should reinforce the expectations of the program. Everything you do, everything that you say you are going to do, you should do, because, in your program, the most important thing is to get your payments back s o that you have a sustainable program. Everything you do should reinforce sustainability. If you say a meeting starts at nine and it starts at 9:30, then that can be taken to mean, well if a payment’s due on Tuesday, then Wednesday or Thursday wil be okay. It’s instilling discipline in every step that you do. As we all know, actions speak a lot louder than words. People become able to depend on you and not only your team but also the promoters, the clients, the groups, whatever the methodology is, so when you say you’re going to do it, do it. Then people have a feeling of reliability and dependability which will keep them, not only part of your staff, but as clients as well. This relates to how we treat our clients as well as our staff. Standards should be the same across the board. It requires treating people the way you expect to be treated.

Another point I would make about training is that the team really makes all of this happen. You cannot have individuals that succeed in this; they do it because there’s a good team behind them. Focusing on team-building and incorporating team members’ participation and involvement is absolutely essential. When you get a good group of people together and you establish a team and good communication, the technical stuff is not that difficult. Forming good teams is hard; it takes a lot of work to develop relationships and trust within teams. We do not concentrate on this aspect enough.

Use different activities to find out what people’s strengths and weaknesses are. A s management on these programs, figure out how to employ people with their strengths. But it takes time, and it’s very easy just to say, “Let’s make lots of loans.” But you also have to focus on the people who are making the loans because they are the ones who are going to actually sustain these programs.

A final note, it fits into this [issue] regarding retaining staff—communication is everything. Keeping the flows open for communication is really important. It’s important to be proactive about things and encourage staff to say when there are problems right away. It’s not a bad thing to make a mistake. It’s a bad thing when we fail to learn from the mistakes that we have made. If you can create an environment where it’s okay for people to make mistakes and admit they have made them, and learn from them, that’s when you can have successful teams that deliver these services.

I would end with saying this is a business, it is not a charity; we are working with poor clients and it takes a lot of energy and understanding to work with them, but it still is a business. We lend to people because we believe they can pay it back. We have to train and recruit people who understand that message. The problem with a lot of microfinance programming around the world is that it comes out of a charitable mindset, and you are trying to get people who gave out blankets and food distribution to now make loans. It’s not a good combination and in many cases, we have had to tell people, “you know, this is not for you.” You cannot just convert people from a social service worker to a loans officer. It doesn’t work.