May 1, 2012

Succession Planning 301: 3 Big Hiring Mistakes to Avoid

This is the third in a series of blog postings on succession planning for an advisory firm, with a focus on how to find, hire and retain good employees for your advisory firm.  

In my 25 years as an employer, I’ve learned a thing or two about how to run a small financial advisory firm.  Some lessons I’ve learned along the way haven’t come easy, but they’ve been invaluable to helping me and my team evolve into a more successful firm. Though there’s no foreseeing every pitfall that can derail your hiring plans, here are a few common mistakes you can avoid making:

Mistake No. 1: Hiring Too Quickly
No matter how diligent you may be in your hiring practices, chances are there has been that one time where you rushed to hire someone. Did you need to fill a critical spot during tax season? Did you need to snag that top advisor before some other firm snatched him/her up? Maybe you bypassed checking all of the references or you overlooked a few “minor” red flags during the interview process. You’ll find that just as quickly as you drop someone into a key role in your practice, you may discover that they just don’t fit. It can be a costly lesson to learn too late.  

The Solution: Take a Deep Breath
No matter how badly you need that new position filled, take one step back and consider the cost of not taking the time to find someone right for the job. Have the candidate visit 3-5 times, meeting with different people in your firm as well as different locations. Have lunch and watch the way they interact and behave, and also put them in situations that they will be in if hired – and observe. Does this person share your outlook on client service? Do their long-term goals line up with yours? Check their references. Study their employment history. Don’t be distracted by shiny accolades or accomplishments. Most importantly, listen to your “little voice” – if something seems amiss it probably is! If you’ve already hired someone who isn’t meeting expectations, assess the damage; it may be time to roll up your sleeves and see if clear expectations and guidance can help steer them your way. Lastly, know when to call it – if someone simply isn’t right for your firm, don’t waste time trying to make it work.  

Mistake No. 2: Not Guiding the Troops
In a small firm, nobody has the luxury of wearing one hat. That doesn’t mean we as employers get a pass on the proper mentoring of our employees. Have you set clear expectations for everyone in the office? If you asked each person what their job description was, 1) could they do it? and 2) how close is that description to their goals? A common mistake is that advisors assume that because they have a mission statement, their staff understands what role they play in delivering on that mission to clients. Overlooking this key component can lead to disappointment, frustration and employee turnover, which in turn costs you time, money and security for the future. 

The Solution: Set Expectations for All  
No matter what their role is in your firm, each employee needs guidance to grow and to help you build the business. Set expectations and standards for each role in your firm. Have clear job descriptions; in fact, the employees can draft their own for you to see if you are aligned on your expectations. During the hiring process, take to heart what a candidate’s goals are, and once hired, apply them. Meet regularly with your team to make sure you both stay on the same page. Remember to think of your staff as your clients—take the time to get to know them and their needs.

 

Mistake No. 3: Holding On to Toxic Employees
You know the ones I’m talking about. They have negative attitudes, they don’t pull their weight, or worse, many times they do have excellent skills, others avoid them at all costs, and they just don’t fit into your firm. Negativity in any environment, but especially in a small one, is as contagious as an airborne virus, affecting office morale, productivity, not to mention your stress level. Why do we hold on to these employees? Maybe their skill set is impressive on paper, or maybe you’re just avoiding unnecessary confrontation, hoping that it will “work itself out.” That’s a nearsighted outlook that you will pay for in the end, avoiding short-term pain in exchange for long-term pain. What we don’t consider is the cost: it can be like a blood clot in the body! You will discover inefficiencies and high costs from holding on to these employees.

The Solution: Be Frank and Direct
Run, don’t walk, to the exit. Have a sit-down with this employee immediately and be frank about the issues and your desire to either correct the problem or part ways. Set very clear expectations on what is required from them.  The sooner you do, the sooner your business, and your other employees, will thank you for it.

Learning from your mistakes is worth its weight in gold, but learning from others’ mistakes is priceless. Keeping in mind these three common mistakes can help you avoid costly detours on your path to building your dream firm!

Page 1 of 2
Single page view Reprints Discuss this story
This is where the comments go.