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September 23, 2021 at 11:15 AM
What You Need to Know
- Advisors might believe that adding administrative help is the answer to growth. It’s not.
- Think about how a new hire could benefit the entire team, not just make the owner's life easier.
- Leaders who manage less attract and retain employees who require less management.
It’s not surprising that professional financial advisory firms are about people. The better your employees, the better your service to a client. While many people believe building an advisory practice is mostly about investment returns, operational processes and procedures, the best technology, rainmaking, marketing, etc., the truth is no firm would exist without great employees, including the owner.
Building a firm, whether an owner chooses to make it a small specialist boutique firm or a large national dominator, it is still mostly about the people employed and retained. If owners get these practices right, they are way ahead of many advisory firms operating today and likely on the path to more growth in the future.
But most advisory firms aren’t built with much in the way of hiring, retention and/or training programs to enhance and build their people. Instead, many firm owners add an employee when it’s necessary or as they run out of time to do tasks themselves.
At some point, many firm owners will realize that they’re growing a business and that the humans they hire into the business are the most important factor in making the business great.
There are three components to successful human capital programs that attract and retain great people: hiring, training and retention practices. Hiring is the first step to get right, so let’s talk about best practices that help you build better people programs to benefit your growth.
Two Truths About Hiring
The most successful firms think about their hiring differently than the average business. They follow two truths in their hiring practices. And it might surprise you that these truths don’t involve a job description, some personality test or specialized interviewing process.
First, successful firms hire by design rather than wants. In other words, they don’t hire when they run out of time to do a particular task. They look at the firm globally and ask themselves what type of person would make the greatest impact on their firm growth today and in the future.
It might not help them individually as owners of the firm in the short term, but it helps the business continue to grow. Many of these owners will hire advisors over support staff and trained business managers over administrative assistants.
Second, they think about others first. When owners get stressed and overwhelmed with work, it’s natural to think about themselves first. This means they make a list of everything they need to get off their plate and then seek to hire a person who can do all that work.
But what if, when you got stressed and overextended, you thought globally about the others in the firm? What would be the best hire(s) to expand everyone’s ability to work with more clients, not just yours? If you’re stressed in the work you’re doing, are others stressed in the work they are doing, too?
The most successful firms seek to remove the stress, rather than seek to hire another person as a bandage for the stressor, whatever it may be. In other words, they don’t solve stress problems by hiring more people.
They solve the stress associated with growth by using their brains, not their pocketbooks.
The easiest and fastest way to use your brain is to look directly at your organization and find the stress points. These points might begin with a broken client experience, operational process, lacking technology or a person who is causing stress who doesn’t belong in the organization.
Prior to hiring, they figure out where the real problem is and solve it first. Then, they hire for the benefit of the whole team, not simply for the benefit of removing the stress and overwork that is on their plate only.
Creating a Well-Designed Hiring Plan
A well-designed hiring plan will increase revenues and profits together — which is the goal, of course. In a professional services firm, allocating your human capital in the right way helps you achieve the greatest results. To do that, you’ll need to do some prep work. To help you get started, here are the first two steps you can take to make your hiring practices more effective.
