Workforce Challenges in Commercial Lending: Sourcing Relationship Managers for Growth

Introduction

Commercial lending is the lifeblood of many community and regional banks, supporting small businesses, real estate development, and regional economies. Relationship managers (RMs) are at the center of this ecosystem, serving as both salespeople and trusted advisors who generate revenue while managing risk. Yet recruiting and retaining strong commercial RMs has become increasingly difficult. According to Bank Director’s 2025 Compensation & Talent Report, 74% of community banks report difficulty hiring experienced commercial lenders, while turnover in this role has risen steadily since 2022. With demand high and talent scarce, banks must rethink how they source and secure top RMs.

Why Relationship Managers Are Critical

• Revenue drivers: RMs generate new business, expand portfolios, and cross-sell products.

• Client trust: Local businesses rely on RMs for financial guidance and community connections.

• Risk management: RMs balance growth with credit quality, mitigating potential losses.

• Long-term growth: Strong RMs build lasting client relationships that anchor banks in their markets.

Challenges in Recruiting Relationship Managers

1. Talent scarcity
   The pipeline of experienced commercial lenders is shrinking, especially in smaller markets where opportunities for mentorship are limited.

2. Competitive compensation
   Larger banks offer aggressive packages, including base salaries, bonuses, and non-monetary perks like hybrid work.

3. Fintech competition
   Digital lenders and alternative credit platforms are recruiting RMs with promises of modern tools, national reach, and faster deal cycles.

4. Geographic stickiness
   RMs often have deep community ties; relocation is rare, narrowing talent pools for banks outside major metro areas.

5. Generational shifts
   Many experienced RMs are nearing retirement, while younger professionals often prefer fintech roles or broader financial advisory careers.

Strategies for Recruiting Commercial Lending Talent

• Employer branding around impact: Emphasize the RM’s role in fueling local businesses, farms, and regional growth.

• Compensation benchmarking: Recruiters help ensure banks stay competitive on salaries, incentives, and loan portfolio bonuses.

• Flexible career paths: Offering leadership opportunities or equity in loan production can attract ambitious candidates.

• Technology support: Showcasing advanced CRM and loan origination systems signals commitment to efficiency and client service.

• Mentorship and succession planning: Pairing younger bankers with senior RMs can build a sustainable pipeline.

Case Example: Community Bank in North Carolina
A $3B-asset bank faced challenges recruiting commercial lenders in rural markets. Recruiters emphasized community impact, mentorship, and leadership visibility. By shifting focus to purpose-driven messaging, the bank hired three RMs within six months.

Case Example: Regional Bank in Arizona
A regional bank competing with fintechs for top talent invested in digital lending tools and emphasized hybrid flexibility. Recruiters used this modernization narrative to attract younger candidates who valued tech-forward environments.

The Recruiter’s Role in RM Searches
Recruiters add value by:

• Mapping RM compensation trends across markets.

• Sourcing passive candidates who may not be actively job-seeking.

• Highlighting cultural and community aspects smaller banks can offer.

• Managing discreet outreach to avoid poaching conflicts in small banking ecosystems.

The Candidate Perspective

Commercial lenders often ask:

• How competitive are compensation and incentive structures?

• Will I have access to modern tools and CRM systems?

• What level of autonomy and decision-making authority will I have?

• How strong is the bank’s reputation in its local market?

Recruiters ensure candidates understand the full picture, helping align expectations on both sides.

Future Outlook: Commercial Lending Recruiting Beyond 2026

• Hybrid lender roles: RMs will increasingly use digital channels while maintaining personal relationships.

• Sector specialization: Banks may prioritize RMs with expertise in industries like agriculture, healthcare, or renewable energy.

• Talent wars with fintechs: Alternative lenders will continue to siphon off candidates unless banks modernize.

• Succession planning: Grooming younger bankers into RM roles will become a priority to offset retirements.

Summary

Recruiting relationship managers for commercial lending has become one of the most competitive challenges in banking. Scarcity of experienced talent, generational turnover, and fintech competition are reshaping how banks approach RM hiring. Employers that emphasize community impact, provide competitive incentives, and invest in technology will win. For candidates, commercial lending remains a high-reward career path with strong client impact and revenue influence. Recruiters play a critical role in navigating compensation, culture, and career pathways to ensure successful placements.