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Practice Management > Building Your Business

5 Workplace Trends Advisory Firm Leaders Need to Harness Now

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What You Need to Know

  • Successful leaders recognize changing trends and, rather than fight them, seek to harness them to strengthen their businesses.
  • Small firms that historically had a recruiting disadvantage increasingly have access to high-quality employees outside their immediate geographies.
  • The pandemic has changed the way firms must look at efficiency, communication and organization.

Recently, a prospective consulting client spent a good 20 minutes complaining about what he characterized as his self-centered employees. They were demanding inflation adjustments to their salaries, he explained. They also wanted hybrid work arrangements. In short, the firm leader was complaining about emerging trends in employee management, and it was clear that he wanted no part of them.  

This recent conversation made me think deeper about the successful leaders I’ve had the privilege of working with over the years. One area that sets these leaders apart is their ability to evolve, change and be flexible in their employee management approach. Leaders of these firms recognize changing trends and, rather than fight them, seek to harness them to strengthen their businesses. 

While the wealth management industry has historically been slower to adapt than other industries on the employee management front, the COVID-19 pandemic has forced it to catch up. Let’s look at the most important trends unfolding right now. 

1. Wage Inflation

The most immediate and pressing trend springs from inflation. Rising costs of living have forced firms to address the question of whether and how to raise salaries to compensate for increased inflation. 

Complicating the equation is the fact that inflation has been accompanied by turbulent markets and, consequently, falling revenues. And advisory firms typically don’t have pricing power to increase the costs of their services to accommodate for increasing demands from employees who want their compensation to be adjusted for inflation. 

A related and tricky situation firms are beginning to confront is when prospective new hires ask for inflation-adjusted salaries that are higher than those of existing staff. In some cases, firms are accommodating those requests, feeling that their need for talent is so urgent that the salary concession is worth it. 

But many other firms are standing firm and successfully landing new talent by offering something more attractive in the long run, both for recruiting and retention: A clear career path. 

2. More Decentralization

Many industries had begun workplace decentralization prior to COVID-19. But it took the pandemic to get the advisory firms moving in the same direction.

The wealth management industry’s lag in adopting human capital trends isn’t an anomaly; advisor firms’ tendency to run behind was exemplified by its belated adoption of unrestricted vacation time. While that trend gained traction among American businesses in 2009 and 2010, it didn’t gain popularity within the advisory industry until 2012 or 2013.

The pandemic forced firms that had lagged in decentralizing their workplaces to finally implement the ability and technology for their teams to work virtually. This hybrid work trend is likely to outlive COVID-19, and when it comes to hiring, it is proving especially advantageous to smaller-market firms. 

Those firms, which were historically at a steep recruiting disadvantage to businesses in big metro areas, increasingly have access to high-quality employees outside their immediate geographies. In response to the more-level playing field, larger firms appear to be doubling down on recruiting talent. 

3. Workplace Well-Being

Another important trend is the transition from a focus on individual employees’ well-being to an organizational focus. Because it ushered in so much change, COVID-19 forced firms to focus on individual employees’ professional and personal welfare. Now, leaders are stepping back and looking to facilitate the creation of a healthy overall organization. 

Businesses are restructuring benefits to be more supportive of employee well-being, considering policies like personal time off and mental health days. They are also setting boundaries around work schedules so that employees can consistently relax and recharge. 

Reining in work schedules can be tricky for advisory firms — after all, it’s a service-based business, and clients’ needs extend beyond the hours of 9 to 5. But we have found that many of the organizations that are attracting the best talent are focusing on health at the global level within workforce policies.

4. The Gig Economy

Advisory firms are embracing the gig economy, in which workers are available for temporary employment, freelance contributions or other types of non-permanent arrangements. This trend is showing up quite heavily in both the client service and business functions. 

Firms might, for example, hire a temporary digital marketing person to work full time for nine months to set up a digital marketing program. Or they might use gig workers to input financial planning data during busy, high-growth periods. They might even turn to the gig-worker marketplace for client service help during periods of market turbulence. 

Advisory businesses are learning that tapping into this nontraditional source of human capital can boost their profitability by allowing them to focus on temporary talent at specific pain points. 

5. Reskilling Workers

The final trend is one that the leading firms are leaning into: reskilling. Reskilling, of course, refers to learning a new skill. In this case, firm leadership is investing heavily in training on what we call the power skills: efficiency, communication and organization. People with these skills are trained to manage time and stress, communicate with empathy, and are well organized in their daily working routines. 

The pandemic has changed the way firms must look at efficiency, communication and organization, and reskilling training programs.

Let’s look at efficiency. When an organization’s people work in a decentralized arrangement, oversight diminishes, and a great deal of unnecessary work tends to take place. That’s why a focus on efficiency has become paramount. 

The bar for communication skills has risen as well. Firm leaders have had to express extra empathy and compassion for their clients for more than two years now. Unfortunately, empathy and compassion are finite commodities: Leaders are giving all they have to their clients, with none left over for their employees, who need it most. 

So reskilling and training programs are focusing on helping all employees speak to their clients and colleagues with empathy and compassion. And, most important, when patience runs out, teaching advisors how to recharge themselves has become even more critical to firm success. 

Reskilling to learn and strengthen power skills translates into better communication skills and filters into a firm’s culture. When leaders model empathy and compassion, employees follow suit. And that’s a precondition for a culture in which employees throughout the organization think creatively, solve problems independently, and help the business reach its growth potential. 

In every industry, change is a constant. And employee management best practices are changing fast right now. While some leaders find these changes to be inconvenient and even aggravating, those who are open to them are, I believe, are much more likely to win the growth race.