Underwriting Your Hiring Plans for H2 and Beyond

Every day, lenders make decisions involving millions of pounds of capital.

Those decisions aren't made on instinct alone. They're supported by due diligence, robust underwriting, market analysis, scenario planning and a clear understanding of risk and return.

Before committing capital, you want to understand the asset, the borrower, the market and the downside. You want to know what could change, what could go wrong and whether the opportunity still makes sense under different scenarios.

Yet when it comes to hiring, many businesses take a very different approach.

Recruitment often becomes reactive.

A senior originator leaves. Deal flow increases. A new lending product launches. A team reaches capacity. Suddenly there's pressure to hire, and the market is approached with urgency rather than strategy.

For an industry built around assessing risk, that approach to one of a firm's biggest investments doesn't make much sense.

People shape relationships, credit decisions, culture, growth and ultimately the reputation of a lending business. The right senior hire can create value for years. The wrong one can cost considerably more than their salary.

As lenders plan for H2 and beyond, there's a useful question to ask:

Are you applying the same discipline to your hiring strategy that you apply to your lending decisions?

 

Hiring Deserves the Same Discipline as Lending

A lender wouldn't deploy significant capital simply because an opportunity appeared.

You would assess it first.

What is the opportunity?

What is the downside?

What assumptions are we making?

What happens if the market changes?

What does success look like?

Who is responsible for delivering it?

Hiring deserves the same level of scrutiny.

Too often, the recruitment process begins with a job description rather than a business problem.

"We need another originator."

"We need a Credit Director."

"We need someone to lead this new product."

Those statements may be correct, but they're only the beginning of the underwriting process.

Before deciding who to hire, leadership teams should understand why the hire is required, what value the individual needs to create and how that requirement fits the wider strategy.

That means moving recruitment away from being an operational response to vacancies and towards being part of strategic business planning.

 

Look Beyond Today's Pipeline

One of the easiest mistakes to make is hiring purely for current demand.

When deal flow is strong, the instinct is to increase headcount. When volumes soften, recruitment slows or stops altogether.

That's understandable, but hiring shouldn't be dictated by the current quarter alone.

The recruitment process for a senior or specialist hire takes time. Notice periods can add several months. Then there's the time required for someone to understand the business, build internal relationships and begin delivering at their full potential.

A hiring decision made today may not have its full impact until well into next year.

Leadership teams therefore need to look further ahead.

Questions worth asking include:

• Where do we expect the business to be in 12 to 24 months?
• Which products, sectors or borrower types are expected to drive growth?
• Are we planning to enter an adjacent lending market?
• Which teams are already operating close to capacity?
• What skills will become more important as the business grows?
• Where are we vulnerable if a key individual leaves?
• Who internally could step into a more senior position?
• Which capabilities would be difficult to find quickly if we suddenly needed them?

These conversations create a very different recruitment strategy.

Instead of asking, "Who do we need right now?", the business starts asking, "What team will we need to deliver the strategy?"

That distinction matters.

The lending environment itself continues to evolve. The Bank of England's July 2026 Financial Stability Report discusses developments across private markets and riskier credit markets, alongside their role in financing UK businesses.

Changing capital markets, funding conditions and borrower demand don't just affect credit appetite. They influence the people and capabilities lenders need around the table.

 

Underwrite the Role Before You Underwrite the Candidate

In lending, you wouldn't start assessing potential structures without understanding the underlying transaction.

The same principle should apply to recruitment.

Before approaching candidates, underwrite the role itself.

 

Why does this position exist?

Is someone leaving?

Is the business adding capacity?

Is the hire intended to open a new market?

Are you reducing dependency on an existing team member?

Is the role part of a succession plan?

Different answers require very different candidate profiles.

A replacement hire, for example, shouldn't automatically mean replacing someone like-for-like.

If the previous person joined five years ago, the business they are leaving today may be completely different from the one they originally joined.

The vacancy provides an opportunity to reconsider what the organisation needs next.

 

What should this person actually deliver?

Job descriptions tend to focus heavily on responsibilities.

Strategic hiring should focus more on outcomes.

What should this individual have achieved after six months?

What should be different after 12 months?

What value should they have created after two years?

For an originator, that might involve building a new introducer network, diversifying deal flow or opening a new region.

For a senior credit hire, it could involve strengthening governance, improving decision-making or developing the next generation of underwriters.

For a leadership appointment, it may be about building a team, professionalising a function or preparing the organisation for its next phase of growth.

Once the outcome is clear, assessing candidates becomes considerably easier.

 

Separate the Essentials from the Familiar

Hiring briefs can become overly restrictive surprisingly quickly.

Ten years' experience.

A particular type of lender.

A specific asset class.

A certain size of transaction.

An exact job title.

Sometimes those requirements are essential.

Sometimes they're simply familiar.

That's an important distinction.

A candidate who has done exactly the same role at a direct competitor may appear to be the safest choice, but the most obvious CV isn't necessarily the person who will create the most value.

Ask which criteria genuinely determine success.

Could someone from an adjacent lending market bring valuable relationships or a different approach?

Could an experienced number two be ready for their first leadership role?

Could someone from a larger institution bring structure and governance to a growing lender?

Could a candidate from a smaller platform bring the entrepreneurial mindset a larger business is trying to create?

This isn't about compromising on quality.

It's about understanding what you're really underwriting.

 

Market Timing Matters

Recruitment markets move in cycles just like lending markets.

Certain profiles become highly sought after. Competitors launch similar products. New entrants arrive. Capital moves into a sector and suddenly several firms want the same origination or credit expertise.

The strongest hiring opportunities often appear before the requirement becomes urgent.

Waiting until every competitor is searching for the same person creates predictable problems:

• Candidate choice narrows.
• Salary expectations increase.
• Counteroffers become more common.
• Recruitment timelines lengthen.
• Businesses feel pressure to compromise.
• Strong passive candidates have several options.

Planning ahead gives you something that's often missing from recruitment: time.

Time to map the market.

Time to understand compensation.

Time to meet individuals who aren't actively job hunting.

Time to build relationships with potential future hires.

Time to challenge the brief.

And time to walk away if the right person isn't available.

This forward planning is particularly relevant when skills are difficult to source. The UK Government's Employer Skills Survey provides extensive evidence on skills gaps, hard-to-fill vacancies and the challenges employers face when required capabilities aren't readily available in the labour market.

For specialist lenders, waiting until a capability becomes business-critical can leave very little room to manoeuvre.

 

Look Beyond the CV

Experience matters.

In specialist lending, real estate finance, commercial finance and private credit, technical competence can be critical.

But experience alone doesn't determine future performance.

Two candidates can have remarkably similar CVs and perform completely differently within the same organisation.

That's because performance is influenced by far more than technical knowledge.

Depending on the position, I'd want to understand:

• Commercial judgement: Can they balance opportunity with risk?
• Relationship-building: Can they create trust internally and externally?
• Credit awareness: Do they understand the implications behind a transaction rather than simply their part in it?
• Adaptability: Can they operate when the market or strategy changes?
• Leadership potential: Can they develop people rather than simply perform individually?
• Market reputation: What do borrowers, brokers, colleagues and competitors say about them?
• Cultural contribution: Will they strengthen the way the team operates?
• Growth capacity: Can they perform the job the business will need in two years, not just the one it needs today?

The strongest candidate isn't always the person who has already done exactly the same job somewhere else.

Sometimes it's the person with the capability to grow into what the role needs to become.

 

Stress Test Your Hiring Strategy

Every lender understands the purpose of stress testing.

You don't only assess whether a transaction works under today's assumptions. You consider what happens when those assumptions change.

Hiring plans should be tested in much the same way.

Consider a few scenarios.

 

What happens if deal volumes increase by 30%?

Would your existing team cope?

Would credit become a bottleneck?

Would service levels deteriorate?

Would senior leaders be dragged back into transactions they should no longer need to manage?

 

What happens if your strongest originator leaves?

How much of the pipeline is genuinely owned by the business?

How many broker, borrower or sponsor relationships sit primarily with that individual?

Who would maintain those relationships tomorrow?

 

What happens if your Head of Credit is unavailable?

Is decision-making distributed appropriately?

Is there someone capable of stepping up?

Or does an important part of the business effectively pause until one person returns?

 

What happens if you launch a new lending product?

Do you have genuine expertise internally?

Are you expecting existing employees to learn an entirely new market while continuing to deliver their current responsibilities?

Should expertise be brought into the business before the product launches rather than afterwards?

These aren't simply recruitment questions.

They're questions about business resilience.

The FCA's operational resilience framework places clear emphasis on firms understanding vulnerabilities that could affect their ability to continue delivering important business services during disruption.

That regulatory focus makes an important wider point. Resilience isn't only about technology and systems. Leadership depth, decision-making capability and the concentration of knowledge within individual employees should also form part of the wider conversation about how robust a business really is.

Succession and capability planning shouldn't begin when somebody hands in their notice.

By then, you're already reacting.

 

Succession Planning Should Start Before There's a Vacancy

This is particularly important at senior level.

If one individual holds a significant amount of regulatory responsibility, institutional knowledge or decision-making authority, their departure can create challenges well beyond recruitment.

The FCA Handbook's guidance covering succession planning for SMF managers provides a useful regulatory backdrop to this issue for firms operating under the Senior Managers Regime.

But good succession planning should go beyond regulatory requirements.

Leadership teams should understand:

• Which positions would be hardest to replace.
• Where critical relationships are concentrated.
• Which employees have the potential to step up.
• What development those people would need.
• Where an external appointment would be preferable.
• How long replacing a particular skill set would realistically take.

Those discussions can then inform hiring decisions well before a resignation creates urgency.

 

Underwrite the Downside of a Bad Hire

One of the most useful parallels with lending is considering downside risk.

The visible cost of a poor hire is easy to calculate.

Salary. Recruitment fees. Onboarding. Benefits.

The real cost can be much larger.

A poor senior hire can result in:

• Missed commercial opportunities.
• Damaged broker or borrower relationships.
• Weak credit decisions.
• Reduced team morale.
• Increased employee turnover.
• Leadership distraction.
• Delayed strategic projects.
• Reputational damage.
• Months spent repeating the recruitment process.

The more senior or commercially important the role, the greater the potential downside.

This is why speed shouldn't automatically be the primary measure of recruitment success.

Filling a vacancy quickly feels productive.

Hiring the right person is considerably more valuable.

 

Now Underwrite the Upside

Risk is only half of the equation.

What could an exceptional hire create?

A great originator may bring relationships that generate opportunities for years.

A strong credit leader may improve decision-making across an entire lending platform.

An experienced Managing Director might build a team, sharpen strategy and create the infrastructure required for significant growth.

A well-chosen future leader could reduce succession risk while bringing new ideas into the organisation.

That changes the way you think about recruitment cost.

Instead of asking:

"How much will this person cost?"

Ask:

"What value could this person create over the next three to five years?"

That's a much more useful investment question.