People strategy in a recession
How many financial services companies can really say that they have a unique product? How many products manage themselves or take their own message to market? Even Facebook, arguably the hottest brand and product on the planet, wouldn’t be the same without the creative and commercial skill of Zuckerberg. However, in hard times Executives often spend very little time making sure that they have a robust people strategy that reviews, develops and, if required, attracts talent. Without a robust plan you run the risk of losing colleagues to competitors, or more generally to lacklustre performance.
The world has a changed a lot since 1914, but Edwin G. Booz’s quote still stands – in many industries, and particularly in the serviced based economies, your people are often your only differentiator.
Having a strategy
Understanding your existing team
Some key questions managers should ask about their staff:
- How relevant is their experience to the role?
- How relevant are their qualifications to the role?
- How do their revenues compare to their peers? What is the source of over/under performance? It is an inherited client or one large transaction making repeat success unlikely?
- What does the employee hope to take from the role? This is often overlooked, but understanding “what’s in it for them” is key to motivating.
- Is this person able to leave and motivate others?
- What areas do they need additional training on?
Very few managers have really taken enough time to understand their existing team. They fail to realise early enough that a group of people assembled to maximise opportunities in a growth environment, may not have the right blend of skills and experience to make it through a recession.
If you ask most leaders about their team, they are often respond with answers based on “gut feeling”. Most have never audited the skills of their individual staff, given enough thought to whether team members’ skills compliment each other, or have asked if the team is diverse enough to reflect the needs of clients. In order to do this, a detailed assessment of each employee needs to be carried out and objective measures applied. Some useful ways of challenging your own thinking could be: using psychometric testing, asking an external consultant to interview staff, asking a peer from another department to interview staff.
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Attracting Talent
Companies do not invest enough time in a recession on attracting top talent. Common mistakes are:
Mistake # 1
Imposing hiring freezes – good leaders are always hiring
Blanket hiring freezes force companies to ignore talent, meaning they often overlook people with the skills and energy that can
transform their business. Hiring freezes neglect the fact that meeting people from other businesses is a great way of gaining more insight into a market, and how your firm is viewed.
Mistake # 2
Overlooking that it is cheaper to hire in a recession and to enter new markets. Although don’t make mistake number 3.
Mistake #3
Placing the risk of the new hire/venture entirely on the appointee.
Having identified a star performer, you need to incetivise them to join. More often than not financial offers in a downturn often reflect the fact that firms want to limit their downside, as much as possible. However, you also need to make it financially attractive and viable for a star performer to leave an environment where they are secure, respected, and probably already paid well. Place yourself in their shoes and ask “If I was them would I risk the status quo for this financial offer?”
Mistake# 4
Engaging with recruitment firms on a success only basis
Many firms stop mandating headhunters to find top talent, relying on 4 -5 agencies. However, having made the decision that you need to hire, conducting a thorough search of the market and making the right choice are arguably more important in a recession.
Also, consider the following when working with agencies:
- Agencies seek to work with as many companies as possible. Quite rightly this means they are unable to recruit the staff of a large number of firms – perhaps the firms you want to attract people from
- Agencies send “good” candidates to multiple clients. You have almost no exclusivity over a candidate and are placed immediately in competition with your competitors
- They rely on candidates responding to adverts, but as we all know top performers rarely respond.
- Recruiters invest their time in those that invest in them.
Motivating to achieve performance
The most common reasons we see for people changing employers are:
- Employees don’t believe their employer has a clear and consistent strategy, and they may not believe in it
- They feel that their immediate boss doesn’t take enough time to understand what they do, and subsequently they don’t feel valued
- They don’t have any visibility on what career opportunities are available to them
- They don’t feel their bonus reflects their contribution to the company
Many of the above points tie in with the points made earlier.
- It is key that the firm communicates its strategy and how and why they are pursuing that particular direction.
- Despite what you may have been lead to believe top performers like regular appraisals, and bad performers need them.
- At a time when bonus pools are smaller, financial rewards need to be aimed at those you want to retain.
About Fram Search
Established in 2010 by Simon Roderick, a recruiter with 20 years City recruitment experience, Fram Search is a specialist financial services recruitment consultancy. We focus on permanent and interim recruitment in the UK & internationally.
We provide high quality contingent and retained recruitment to boutiques and global brands. We have long established relationships and access to deep talent pools. Fram takes a highly consultative approach, and we have a quality over quantity ethos. We are proud that our contingent fill rate is nearly three the industry average and we augment our retained search methodology with rigorous psychometric testing. Champions of diversity & inclusion, all staff have undertaken unconscious bias training.
Please contact us on 01525 864 372 / [email protected] to learn more.
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