Having done hundreds of employee recruitments for my advisor clients over the years, I've come to the conclusion that hiring the "right" people, or even "good" people, is largely a crap-shoot: You just can't know for sure, no matter how great your interview process is. What I have found makes a tremendous difference in employees' future performance and contribution to an advisory firm is making sure they really want the job.
In part, that means fairly and accurately describing the job itself and the potential for future advancement. But even more important than what the job is, prospective employees need to know why this is a good job. I'm not talking about benefits here, rather why a job is something an employee can believe in—to motivate them to want the job. Here's how we put it in the introduction to our job announcements:
"Our employees are as important as our clients, and we work to provide both with a great atmosphere and learning environment. We value our employees and we take pride in recognizing their outstanding talents and efforts. We are committed to the delivery of superior quality of services based on a foundation of honesty, integrity and ethical treatment. We are a well-established financial services company that is expanding. We offer a great team environment, a reputation for excellence, established clients and excellent growth potential to help you reach your personal and career goals."
Once employees make the decision to join an advisory firm, the "why factor" becomes even more important. In my work with advisors and research into creating successful practices, I've discovered that great practices come from having great employees—and great employees are created through effective motivation. In my December column, I wrote about the huge motivational benefits of revenue-based bonuses. Equally important to motivating employees is the "why factor:" why employees' jobs are important, why they need to be done, and why they are worth doing. The difference between employees who believe in what they are doing and those who are simply doing a job is night and day. And so is the success of the firms they work for.
Motivation
Advisory firms with highly motivated employees have significantly higher revenues and growth rates; very low turnover; owners overwhelmingly cite having better lifestyles and say they are happier as a result of their "employees' work ethic and dedication to the company;" and more than half of owners have a clear path to an internal succession. Pretty good results from simply having better, more motivated employees, huh?
Yet, in my experience, independent advisors aren't very good at motivating their employees. I think that's because advisors are highly motivated themselves. Most advisors left financial services companies to start their own firms because they were highly motivated to serve their clients more independently. And as entrepreneurs, they are highly motivated to run successful businesses—not only because they and their dependents' livelihoods, well, depend on them, but also because their name is on the door. It's their firm; and usually, their dream.
Consequently, owner/advisors often have a hard time understanding people who are less motivated than they are, especially employees, who are in a very different situation. Employees at independent advisory firms fall into two categories: professionals and clerical folks. It's true that young professionals are usually motivated by learning to become better advisors, and advancing their careers. But working in someone else's firm is probably not their dream—and long-term aspirations can be eventually worn down by daily drudgery, year after year.
Staff folks face an even more difficult motivational challenge: not only is this not their dream job, it probably isn't even their dream career. They often have their job as an interim step, or more likely, simply because they need a job, and their family needs them to have it. It's true that need can be a powerful motivator, but only to a point. And that point is the minimum: the minimum they need to do to keep their jobs, to keep their boss happy, to go home at the end of the day.
These are the employees at advisory firms, at least where they are starting from: it's not their firm, it's not their clients, it's not their name on the door. This is also the point at which great firms are created—financially successful firms, to be sure, but more than that—firms that support both the working environment and the lifestyle that advisors and their employees truly want. To create that firm, advisors must motivate their employees to see their jobs as more than jobs, and the firm as more than a firm—they need to know why they are doing their jobs, and why it's more important than merely bringing home a paycheck.
