From the February 2012 issue of Investment Advisor • Subscribe!

Survey for Success

Is employee unhappiness holding back your firm’s potential?

My work with independent advisory firms over the past 10 years or so has led me to conclude that there are three steps to maximizing employee contributions to their firms through increasing their happiness: identifying the problem; understanding the problem; and, finally, fixing the problem.

I’ve come to realize that the employee’s perspective is so difficult for many owner/advisors to understand because it’s hard for them to relate to. Owner/advisors are a unique combination of both professionals and entrepreneurs in an industry where being either is still a very radical path. Virtually all the independent advisors that I know have sought advanced education to increase the benefits of their advice and launched their own businesses to eliminate many of the traditional conflicts of interest. They are dedicated professionals who have taken on additional risks and often forgo additional income to better serve their clients.

Now, contrast that with the perspective of an advisory firm employee. Even if they are professional employees (i.e. young advisors), they have not chosen to start their own practices (even becoming fledgling brokers or insurance agents and building their books would be more entrepreneurial). They go to work at firms because they want to work for someone. There’s an excellent chance that their reasons for joining your firm are very different from yours for starting it.

This difference between owner and employee perspectives is very important because it means that many of the things that make owners happy with their work are different from those that make employees happy with theirs. I’ve found in my work with advisory firms that happy employees are the key to building successful businesses. For starters, I’ve found that high turnover rates and the many costs associated with them (recruiting, training, initial low productivity, low overall firm morale, etc.) are the biggest factors holding back firms that can’t seem to reach success.

Before you owner/advisors start squirming at the touchy-feely direction this seems to be going, let me state for the record that I’m not talking about cakes and parties for employee birthdays (although I’ve never known that to hurt). Once owner/advisors come to grips with the fact that employees have a different perspective from their own, they can begin to explore what would make their employees happy in their work. The “aha!” moment for many owners typically comes when they realize that what they need to do is to find ways to give their employees the same sense of purpose that drives them to own their own businesses and care for their clients, but within the perspective of an employee rather than an owner.

To do this, I get my clients to ask themselves, “If I didn’t own this firm and these weren’t my clients, what would motivate me to act as if I did and they were?” The answer is much less complex than it sounds. There’s a large body of business research (ranging from Daniel Pink’s “Drive” to Tony Heish’s “Delivering Happiness”) that tells us employees need more than a paycheck and benefits to succeed at their jobs. They need to feel part of something bigger than themselves—a greater purpose. In part, that purpose can be to help their firm succeed and grow, but only if they see their firm as contributing to the greater good.

This is good news for independent advisors because they already have a greater purpose, and their firms are contributing to the greater good by helping their clients achieve financial success: financial success that involves money, but isn’t about money. It’s about sending children to college, providing medical care for families, elderly care for parents, and secure retirements so that people don’t become burdens to their children or other relatives. Owner/advisors already know this. It’s what drives them to do what they do. To get the most out of their employees, they need to communicate this sense of purpose to them, and explain why the advisor does what she or he does and how their firm’s mission is to make that purpose a reality for its clients.

The next step in solving the problem is identifying the problem. That translates into determining whether the widespread problem of unhappy employees actually exists in your firm. Chances are it does, but most owner/advisors seem to be reluctant to take my word for it. That’s certainly understandable (it’s human nature to want to assume we’re the exception rather than rule, even when overwhelming data and long experience may suggest otherwise). To get to the truth about a particular firm, I recommend that my clients—and all advisory firms—conduct an employee survey.

These days, it’s become popular for advisory firms to survey their clients on a regular basis to get a better handle on how happy they are with their level of service and to get feedback on what’s working and what isn’t. These surveys are very valuable: It’s important for firm owners to know how closely their invented view of their clients’ satisfaction matches reality. Gauging their employees’ happiness level is equally important for the same reasons. The answer sometimes comes as a bit of a surprise and often a real shock.

To identify whether your firm has an employee “happiness” problem requires that the owners truly want to know the real answer. The desire to find the truth of the matter translates into conducting an employee survey that eliminates factors that might lead to skewed answers. For instance, simply asking employees to their faces what they think about their firm and their job isn’t likely to result in honest answers, at least not in many cases.

That means these surveys need to be done anonymously. What’s more, they need to be formatted in such a way as to not give away who the employee is through their handwriting or by asking questions about job descriptions that would lead to only one or two people. This is a problem at all small businesses, where the person analyzing the survey is likely to be very familiar with the employees taking it. The solution is usually an electronic survey.

These surveys shouldn’t be overly long or complicated, but should cover the key areas that contribute to employee happiness in their work. Here are the areas that I cover in my employee surveys, asking for a rating from 1 (lowest) to 5 (highest) and spaces for comments to explain why they feel the way they do:

A rating of employees’ manager’s:

  • Knowledge of their work
  • Willingness to listen to the employee
  • Fairness of reviews
  • Reasonable performance expectations
  • Response to work-related suggestions
  • Business ethics

Employees’ satisfaction with their:

  • Initial training
  • Ongoing training
  • Job performance
  • Opportunities to use their skills and abilities
  • Sense of accomplishment in their job
  • Understanding of how their compensation is determined
  • Level of pay
  • Benefits package
  • Preparation for career advancement
  • On-the-job morale

Employees’ satisfaction with the quality of the firm’s:

  • Client services
  • Communication of its mission
  • Communication of its purpose
  • Tools provided to do their job
  • Physical condition and safety of location

An overall rating of employees’ satisfaction of:

  • The firm
  • Their job
  • Their coworkers
  • The way they are managed

If the average employee satisfaction rate proves to less than very high (4 or above out of 5), chances are you’re not getting as much out of your employees as you could, and your firm isn’t as successful as it might be. The third step—actually fixing the problem—is a subject for another column. But, as they say, admitting that you have a problem is more than halfway to finding the solution.     

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