Bill Emerson figures the next six months or so are going to be an “interesting, challenging time” in the mortgage industry.
As the president and chief financial officer of Rocket Companies, a Detroit-based fintech company consisting of mortgage, real estate and financial service businesses, he should know.
“When you take a look interest rates and how that prohibits people from buying, that’s one challenge,” Emerson said. “When you have inventory levels that are at record lows, that’s another challenge … it’s just going to be a tough time for the next six months. When organizations don’t capitalize and you’ve been through this before, you look out the other side and say, ‘Opportunity for us.’”
Emerson said Rocket has been “pivoting for a long time” to be ready to face the upcoming challenges.
“There’s a six-month view and a long view,” he said. “The long view has a little bit to do with artificial intelligence and how we can get better at automating processes so that consumers have a reason to, regardless of what’s going on, look at us as their option for financing.”
The Federal Reserve’s decision last month to hold steady on interest rates – the Fed has raised them 11 times since March 2022 – didn’t affect the mortgage industry, according to Emerson, but potential raises coming later could.
“(The Fed holding steady) didn’t really affect anything,” Emerson said. “I think most of the market has priced those things in already. If the Fed had done something unexpected it might have caused some volatility, but it didn’t. We’ll just have to see how it plays out.”
Emerson talked after his recent appearance at the Detroit Economic Club meeting, held Thursday at the Westin Book Cadillac, where he and Sara Armbruster, CEO of Grand Rapids-based Steelcase, which designs and manufactures office and work furniture, talked about the pros and cons of having employees return to in-person work. The discussion was part of the DEC’s Future of Work series, and concerned “Navigating the Return to the Office.”
Moderator Steve Grigorian, the president of the DEC, pointed out that many companies are asking employees to come back to the office as the pandemic moves farther into the rearview mirror. He pointed to a headline from Resume Builder that suggested 90% of companies plan to implement return-to-office policies by the end of 2024.
“I would say the 90% of companies wanting employees back in the office is true, given what we’re seeing in our business,” Armbruster said. “I can’t think of a CEO who isn’t trying to figure that out.”
Emerson wondered why such a policy was so challenging to implement.
“Why does it have to be a challenge? I think we make it a challenge by calling it challenge,” he said. “I’m surprised it’s not more than (90%). When Google, who can work from wherever they want, has realized that innovation only happens through collaboration, and collaboration really happens best when human beings are interacting with one another on a face-o-face basis.
“It’s only a matter of time before CEOs wake up and realize their bottom line is greatly affected by the fact they allow human beings to tell them what they’re going to do,” he added. “If you’re not back in the office, your business is suffering and will continue to suffer, in my opinion.”
Because of enforced shutdowns due to Covid-19, employees began working from home in March 2020. Three years later, leaders agree, it’s been a challenge to get them to come back into the office, Armbruster said it’s a form of rejection on the part of some employees.
“It’s a rejection of a lot of things,” Armbruster said. “It’s people rejecting toxic cultures, it’s people rejecting bad losses, it’s people rejecting companies that don’t invest in their learning and their growth … of uncompetitive pay. Sometimes it’s a rejection of offices that look like they’re right out of 1974.
“But I really think it’s about a holistic workplace experience,” she added. “If you’re a business leader the question you should be asking is … what is the holistic value proposition I’m offering to my people? How am I going to make the case this is the place I want to invest our time and our talent.”
Emerson said the decision comes down to organizational culture.
“People want to work inside an organization that cares about them and treats them with respect,” he said. “Human beings are by nature short-term thinkers. In the short run, it was better for me to be able to work at home. When I look at 2020 and 2021 from the pandemic perspective, we were tremendously effective and efficient at doing the day-to-day work.
“But what we lost was that camaraderie,” he added. “We lost a piece of the culture of the organization that has been so important to us over the years.”
Grigorian pointed to a Harvard Business Review iopinion that teams working in the same physical location were more likely to exchange ideas and build trust than teams working remotely.
Emerson called it a “reality of life.”
“All you have to do is take a look at some of the data inside your own companies,” he said. “I think at the end of the day … you have to find a way to communicate to your team members their value. It’s the holistic value … culture is philosophy, it’s how you think about an organization, but it’s also your environment, the space you’re working in.
“If you’re not thoughtful and intentional about how it’s going to operate it will fail,” he added. “Clearly consolidate it so that when you are in the office you’re literally bumping into other human beings. That’s the whole point.”
He also figures that “hybrid” arrangements – part remote, part in-office, won’t be around much longer, and that fewer positions will be fully remote.
”I really believe that (fully remote) is going to be a small percentage of the population as you continue to move forward,” he said.
