Common reasons firms find it difficult to hire
Share this Post
In most areas of financial services the most important relationship is between the salesperson and the client. If we use the private client investment management industry as an example, there are few differentiators between firms in the sector. Arguably, the real assets are a firm’s brand and employees, and the relationships they form with private clients and intermediaries. Therefore, attracting talented individuals is a key part of many firms’ growth strategies. However, some companies seem to struggle to attract new employees and often go for up to a year without appointing anyone.
Here, we highlight some of the common hiring errors people make:
Keen to hire rainmakers, but not thinking what they need to offer a rainmaker to make a move attractive
This comes down to more than just money – although in our experience a good financial offer often trumps most things. Rainmakers have real choice over where they work and therefore they will be looking at factors such as brand, quality of service, breadth of products, a unique selling point, administrative support, autonomy, and clarity that if they achieve certain targets that they will benefit financially.
We often meet hiring firms who want to attract talent from bulge bracket banks, but often their pay scales are the same or in some cases worse, the brand weaker, and the administrative support minimal. Why would someone want to join a firm in these circumstances?
Unrealistic expectations about revenue generation in year one
Most firms want to hire someone who will at least breakeven in year one, but is this realistic? Almost all candidates have restrictive covenants in their contract, but irrespective of this issue clients can take time to transfer to a new company. Candidates want to join firms that will support them for two years, and share the risk of a move. Remember that if someone can generate £500K of revenue in year one they can join any firm – they may as well join the one that is the most supportive.
Focusing more on the portability of a person’s client base, rather than on the individual
Whilst people understand they are being hired for the revenue they can generate, they do want to feel that the hiring firm is interested in them as a person. This could be that they take an interest in a person’s outside interests, that they take time to build rapport with them, or they ask what long term career plans the person has.
Unwillingness to change any aspect of a contract
The majority of firms will actually amend a contract to secure a top performer, but some firms won’t move on any issue. Often a firm will fail to secure a candidate over small issues like probation periods and holidays. Ask yourself if you had a long track record of success with your current employer, would you move to a new firm which had a probation period of six months? Would you move to a firm after twenty years employment for less holiday?
Time kills deals
Time kills deals, and protracted interview processes usually result in a candidate accepting another role, or not joining a firm due to them feeling the hirer is indecisive.
Unwillingness to consider alternative candidate profiles
There are so many firms who spend a year trying to hire people, and yet had they have considered a slightly different candidate they would have now had someone in place with a good revenue pipeline.
Failing to have a good PR strategy
The most successful firms have a clearly defined pay strategy that is externally benchmarked. They let the market know their offering and use PR to ensure that they are seen as a place people want to work.
Share this Post