How to Scare Away New Talent

November 02, 2015 at 07:00 PM
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Virtually every experienced advisor has at some point suffered the challenging financial and non-financial impacts of staff turnover.

The estimated financial cost of turnover, depending on the source, can range from one to three times the departing team member's compensation. This is not the most detrimental cost, though — even worse is the psychological impact frequent turnover has on firms and how it causes existing team members to lose confidence in their leader, makes it harder to recruit new talent due to a perceived impaired culture and employee-unfriendly reputation, and leads to an overall downward spiral of morale.

Most turnover stems from unclear roles and responsibilities; insufficient screening for skill and cultural fit; lack of clear expectations; and poor management and mentoring.

The Status Quo

The typical approach to creating a job description and divvying up the workload involves having each current team member submit a list of things they do not want to do, now or in the future. This list gets compiled and then someone is hired to do all of those things.

There's nothing inherently wrong with this approach, with the exception that sometimes the list is overwhelming. Instinctively, firm owners know it is probably more than one person can take on, but plunge ahead regardless to keep human capital costs low.

Hint: If the list of responsibilities is more than a page long, break it up into multiple roles.

Don't Hire to a Moving Target

In this tight talent market, hiring the right fit is daunting enough when clarity exists around the role and responsibilities, so firms are adding an unnecessary layer of complexity to their hiring by taking this "we'll-create-it-as-we-go" route. It is impossible to attract and screen the right candidates for a position that is not defined.

For instance, if a new hire is brought on to create financial plans at a high level and volume, it is going to be a challenge for them to switch between this role and the client service, admin and operations roles that new planners are sometimes expected to perform on top of their financial planning responsibilities. It is true that firm owners might have done "everything" when they first started, but it usually was not at the same capacity the firm owner is now requiring of the new hire. Firms must be clear on what they are hiring for or the default is a catch-all candidate for a catch-all position.

Hint: A laundry list of various duties spread across multiple departments is not compelling to the next-generation job seeker. Focus on the challenges of the position and how what they will do at your firm can help them develop the skills they need to succeed in the financial planning profession.

Implement Clear Descriptions and Expectations

Team members need to be put in stimulating positions and encouraged so they can recognize their full potential. However, there is a fine balance between challenged and overextended.

Every candidate must adapt and adjust as the workflow in the firm does, but these aberrations should be periodic and temporary. This is why regularly scheduled employee reviews are vital to a new planner's career and the success of the organization over all. Regular discussions about what is going well goes a long way toward preventing someone getting so far off course that they cannot be brought back in line.

Hint: If there isn't enough work for two additional team members, consider outsourcing to a virtual assistant or intern.

There are many well-intentioned firm owners who initially set out to hire well, but after a few bad experiences, double down and try to cut corners in the quest to hire the right person.

If this has been your approach, consider spending significant time reviewing your firm's workflow life cycle, and the distribution of roles and responsibilities on your team. Ensure you have allocated your human capital portfolio correctly to absorb the ups and downs of your firm's growth cycle.

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