Why Is It So Hard to Find Good Talent?
Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Why is it so hard to find good talent in this industry – young people who are motivated, know what they need to do and do it?
We have just lost our fifth person in the last three years and we are only a firm of 16. The turnover is very painful. I believe we have a good hiring process. We have at least five people on our team interview candidates and then we make a consensus decision on who would be the best fit. Every time we think we have the right one who will stay, we find out they are unhappy and next thing we know they are leaving us.
There are eight people who have been with the firm for over 12 years so I know it isn’t a terrible place to work or we would not be keeping people for long periods. I perceive this generation (all of our turnover has been under 35-years old) does not want to work as hard. They don’t understand you have to pay your dues before you can interact with clients and do the sexier stuff associated with this work.
Are we wrong to hire from this age category? Should we be looking for grizzled veterans like we are but when we come across the more experienced people they want too much money and want to become partners right away? It’s not only frustrating but it is expensive. Is our industry just not attracting motivated and excited young people?
Your note has two parts – one is the overall trends in this industry with regard to talent and the other is specifically what is happening in your firm and what you might be able to do to shift the pattern. I don’t think a fact-based discussion on what’s happening in the industry is going to help you. Yes it is true, the industry is aging; advisors are on average in their mid to late 50s. There appears to be a dearth of young talent coming in and it can be hard to attract them into many of the smaller firms.
But with all of that as backdrop, I know many, many firms that are finding excellent talent 35-years old and younger and are keeping this talent. In all cases, however, they are doing things a bit differently – they aren’t expecting the newer staff to “earn their dues” and sticking them behind the scenes to run spreadsheets. I’m not saying this is what you are doing, but I see many longer term advisors take the perspective that the next generation has to earn the right to work with clients and become more involved. Unfortunately on the road to earning this right, the younger generation gets frustrated with the lack of movement and is disillusioned and then eventually leaves.
I don’t know if you are doing exit surveys when people leave but I strongly recommend you do this. Don’t have the leader of the firm or someone in a leadership position do this – even with an employee who resigned, this can be intimidating. Because you are trying to get answers and understand what’s happening, hire someone from the outside to do these. Call up those who have left and tell them you want to improve the working situation and you are hoping they will share some insights on what’s working and what’s not. Rather than waste a lot of time on conjecture, going right to the source makes the most sense. You want to ask open-ended questions, too – this isn’t a survey to just gauge satisfaction. While you are at it, do an interview for current staff as well. It would be interesting to see if there are any themes between those who have left and those who continue to stay with you.
Next, take a look at your onboarding process and career pathing. When you bring someone into the firm is there a clear step-by-step process to integrate them, teach them what they need to know, expose them to the inner workings and help them understand context for where their role fits? This should be a first week, first month, first quarter and first year outline. Alongside this, lay out the typical steps someone in the role will take to learn and grow. Instead of just “paying the dues” show them what the dues will look like and what the expectations will be for them to succeed and move ahead.
The clearer you can be about what’s expected and what they need to do, the more engaged and involved they are likely to be.
And please, one personal request – don’t bucket everyone of a certain generation into a category. This is one of the things that goes wrong. You might unconsciously have a negative view which then becomes a reality. Assume the young people you are hiring want to succeed and you need to figure out the best way to help them do that.
Is it possible to run my advisory firm while I also pursue a separate philanthropic passion? My wife is very concerned that if I set up the not-for-profit I have dreamed about for years, the business will fail. The business is our current source of income and is our longer term retirement plan. However, I’m beginning to stagnate and really want to explore my passion while I still have the energy to do so. I’m 64-years old so not thinking I can wait another 10 or 15 years until we are fully set to do this.
You want me to get into an argument between you and your wife and pick sides? Did I ever write about the time a great, long-term client of mine asked me to run a profile (DISC and values) on a woman he was considering asking to marry him? It’s a very long story but there were things in the profile that concerned me and I shared this with him. It damaged our relationship until, about six months later, this woman robbed him blind – stealing even his grandfather’s unique and irreplaceable watch. She then disappeared and he never heard from her again. I took no satisfaction in saying I was “right” because ultimately the client relationship matters the most to me. So…. I vowed never to wade into anything personal again and I won’t do so here.
I will just say – life is short. Many people never find anything they are truly passionate about. Having a quest or a passion is what makes life interesting and fulfilling. I believe firmly you should find a way to do what you dream of but it is important to work alongside your wife to quell any fears she has and show her how the financials will still work and you can continue to live your life in a satisfying (assuming that is so). She might also be concerned about your focus and how much the not-for-profit will pull you away from a relationship with her so be aware of this and talk to her about this also. Instead of trying to overcome her objections, honor them and seek to understand so you can address them in a way that puts her mind at ease. If you can’t do this, you might have to choose whether the passion is worth potentially damaging the personal relationship.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995. In 2008, she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.