It's not the cards you're dealt, but what you do with them that's important. Was reminded of this line after a speech I gave on recruiting and retaining professionals at the Investment Advisor/Moss Adams Advisor Summit, fittingly held in Las Vegas last month. Following my talk, I was approached by an advisor who said he had trouble keeping young professionals in his practice. Weird thing was, though I'd never met him, nor spoken to him before, I knew a lot about him already.
The financial planning community is made up of a widely connected good ole' boy/girl network. It was only a matter of time before I ran into an advisor whom I'd heard about from his ex-employees. As many (dare I say it) "older" people often do when talking to young folk, he approached me by first trying to establish his greater wisdom; explaining that he had over 19 years experience in the industry. He'd built his practice in the "hard times" when there was little in the way of professional training, resources, or technology to help him. Seven years ago, when he couldn't handle any more clients himself, he started hiring CFP college graduates. Like many of his counterparts, having invested countless hours and dollars training a series of four such professionals (none of whom are still with him), he was frustrated over his track record and apprehensive at the thought of hiring another one.
What he didn't know was that I already knew that he did most everything "right" in attempting to retain the talent he had hired--that is, all the conventional things we consultants tell you to do to hold onto key staff: Compensate employees fairly with incentive-based pay, develop an organizational structure, have suitable job descriptions, train them properly, and offer a career track toward partnership.
So what was his problem? He didn't know I already knew that, too: He was missing the kicker that gives some people a winning hand with employees while others are left with a short stack. In the words of his employees: "He gave us everything we could ask for as far as benefits and pay, but he showed zero confidence in us, or in our ability to help him, even after he trained us. We truly wanted to help him if only he'd let us...and that was very demotivating."
Show Some Confidence
Looking back at my experiences with clients, co-workers, friends, family, and maybe most importantly, myself, I believe the answer to his problem is confidence--the ace in the hole to building a successful firm and retaining talent in it. Not the ego some folks have wrapped up in their tenure, or in the firms they've built. Rather, the confidence to trust others to help you achieve your goals. This advisor could have had 100% staff retention, if only he'd made as much effort to build trusting relationships with them as he did with his clients.
Without a doubt, it's hard to build confidence and trust in other people. Many planners fully understand this challenge when trying to develop long-lasting relationships with their clients. If anything, it's even harder to build good relationships with employees, especially when you're reaching across generational lines. But without trust in your team, it's very hard to grow a business no matter what benefits and rewards you throw at them.
Many employees will tell you that the key to keeping them is bigger paychecks and more benefits. In fact, according to the 2006 Job Satisfaction Study conducted yearly by the Society of Human Resources Management the top four factors in driving retention and job satisfaction in America today are compensation, benefits, job security, and work/life balance. However, in my own research with recruits I've placed and many other employees, while it's easy for them to cite compensation and incentives as their top priorities, the truth is, young professionals almost always crave something else.
In much of the recruiting I do for my clients, candidates increasingly explore their prospective roles in the firms they're considering. True, the current lack of supply and high demand for talent gives young professionals the luxury of demanding a deeper meaning in the jobs they accept. But the desire for a "deeper meaning" in one's career can mostly be attributed to generational differences.
Indeed, there are literally dozens of studies demonstrating that younger generations (Gen X and Gen Y) are seeking career paths they are passionate about and committed to, at earlier stages in life than did earlier generations such as the Baby Boomers. As a result, they have a lower tolerance for jobs at companies that don't seem as committed to their success as they are. The good news is they rarely change careers unless forced. The bad news: they'll jump from job to job without hesitation, looking for the "right" situation. If you're not willing to bet on their potential and utilize their skills, you're gambling away your chances for help in growing a successful business.
How to Build Confident Relationships
There's no magic formula for building successful relationships with employees. However, if used the right way, your own confidence does have a magic of its own. To establish trust and loyalty in your professional employees, here are three simple steps that will change the way your employees perceive your business, which in turn will dramatically reduce employee turnover:
1. Check your ego at the door. I have learned through observation of many planning practices that an overactive ego, deserved or not, is the single most isolating quality a manager can have. Let's face it; you have more experience, more knowledge, and more financial success then most, if not all, of your employees. You likely have gone through harder times then they have. Your employees already know that and respect you for it; otherwise, they'd go work for someone else. So you don't have to prove it to them continuously. I can't tell you how many times I've observed advisors address their underlings by saying: "We are doing it this way because I've been in this business longer, have years of experience, and understand it better then you." Sure, all those things are true. But what is your ego really teaching them? I can assure you, without patient explanations, you're not teaching them to be confident in you and the work they do for you. You're not their parent, you're their teacher, and taking a bite of humble pie might generate some unanticipated positive results.
2. The truth is overrated. Don't get me wrong, I'm all for being honest. But sometimes the brutal truth is, well, brutal. How many times have you replied "yes" when your spouse asked if they looked fat in that outfit? I have yet to meet an employee who didn't have the desire to impress or please their employer. Do they always complete it to the level of satisfaction you wanted them to? No. Have they made mistakes? Yes. Could they do things differently to get a better result? Probably. The problem with evaluating performance in the workforce is that negative comments usually resonate louder than positive feedback. When offering an employee feedback on their performance, try to approach it with a kind tongue rather than brutal frankness. It only takes one unkind truth to create a deadly windfall that kills many areas of confidence, and motivation. It's not worth the risk when attempting to build and maintain positive, loyal employment relationships. Take a lesson from your spouse; you're much better off withholding what you really think and instead leading by example to get to the better result.
3. Get serious. If you're not serious about getting into confident, loyal relationships with others who desire and have promised to help and support you, then should you be dating? Your next-generation employees are seeking to find security in their lives, through their careers, which is what you can provide them. If you are not serious about providing it, then why are you hiring them? You have far larger winnings to lose in time, resources and overall business success if you take on a relationship that you're not sure you're committed to. Getting serious means working on yourself first by understanding your strengths, weakness, limitations and, most of all, your potential. Are you ready to help someone else do that as well, for your mutual benefit?
Next-generation professionals are loyal to firms who believe in them as much if not more then they believe in themselves. If you are looking to grow and want to hire and retain a stronger team, I would highly advise you to do what the truly successful do--never gamble away your winning card. Instead use it to generously and willingly share with others the same confidence you had in yourself when starting your business in the first place.
Angela Herbers is a virtual business manager and consultant for independent financial planning firms. She can be reached at firstname.lastname@example.org.