Independent financial advisory firms face unique challenges as small businesses, especially when it comes to the hiring process. With each new hire, overhead costs increase, the corporate culture changes and staffing adjustments need to be made so as not to disrupt the client experience. Financial advisors need to be hypersensitive to the impact of their employment decisions and have a disciplined hiring process to identify, screen and onboard team members. Remember, your firm’s biggest asset is its people—and taking the right steps to help ensure you’re selecting the best candidate for the job is critical to your long-term success and growth.
Buyer Beware: The Cost of a Bad Hire
You may have experienced the headache of bad hires and the business impacts they cause. According to a 2016 study conducted by CareerBuilder, a bad hire can cost anywhere from $11,000 to $24,000. The same study discovered 75% of employers said they have hired the wrong person for a position. Of these, 36% said they experienced a loss in productivity and 31% said the bad hire negatively impacted employee morale.
A Simple, Repeatable Hiring Process Is the Best
While no magic bullet exists when it comes to hiring high-performing team members, there are best practices every financial advisor can leverage to help attract and retain top talent. The following six key steps will help put you on the path to defining your hiring process and building your ideal organization:
- Determine Staffing Needs – It may seem obvious, but the old adage of starting your journey with the end in mind is the best advice you can heed as you make your hiring decisions. Rushing to hire a candidate can quickly become a bad decision, as evidenced by the CareerBuilder study, which found that 43% of poor hiring decisions were caused by a perceived need to fill an open position quickly. Take a strategic view of your firm’s human capital needs, commit to developing your talent pool, and think long term about how your next hire will positively contribute to your growth.
A staffing plan can be a useful tool to determine future staffing needs. Rather than hiring team members ad hoc, you can use this document to visualize what positions or roles will be needed over time, usually the next year. It also shows how the new positions or roles will be organized in your business, including to whom they will report.
- Create Job Descriptions – Once you have a clear idea of what gaps you have in your organizational structure, you will need to create a job description that paints a picture of your ideal candidate. Remember, the job description is the candidate’s first encounter with your open position. A vague job description could lead to a candidate misunderstanding what is expected of the position. Furthermore, if you are unable to fully articulate what you are looking for, it may be difficult to select the right candidate for the position.
Define the set of activities the team member will perform, and define the skill set needed to perform the tasks. You will also want to identify personality characteristics you are looking for: what values or work ethic are necessary to be successful in this position? It’s essential to think big—to have a good balance of essential traits and stretch characteristics so you can find someone with the appropriate mix of hard and soft skills. The more transparent and detailed you are with your requirements, the better the pool of candidates you’re likely to receive.
- Source Candidates – High performers are out there, you just need to find them…and do so quickly. Spread your net far and wide, leveraging your entire network. In addition to job sites, professional networking websites like LinkedIn are great vehicles for posting job openings in a cost- and time-efficient manner (make sure your broker-dealer allows you to use social media and review all related policies). Remember though, you need to have a well-built website and LinkedIn page for yourself and your firm so people can learn about you. Local universities are an untapped marketplace for high-quality candidates, especially for entry-level positions, and represent a great way to build your brand locally.
Job boards, such as Indeed and Beyond, are a great way to find potential candidates. Although, their primary purpose is to post job ads, they are also a massive database of resumes. Employers can run searches from basic to advanced and receive qualified resumes. Don’t forget to consider niche job boards as well: these have a smaller candidate pool, but more often than not those candidates specialize in a particular area. When posting on job boards, however, keep in mind the keywords job seekers will search for. “Sales superstar” may sound great, but are job seekers searching for that term, or are they more likely to search for “sales executive” or “sales associate”?
Don’t forget to look at your current team—could any of these people have the potential to be a candidate for a role you’re looking to fill? In many cases, the best person for the job may be someone already in your office. They are also an extension of your network; perhaps they know someone who would be perfect for the position.
- Interview Candidates – Asking the right questions during the interview process plays a direct role in identifying your next star employee. Getting everyone in the office involved in the interview process at the appropriate time helps ensure that you’re not making the hiring decision in a vacuum and without input. Building a question bank standardizes how all interviewers will engage the candidate and provides a baseline for candidate review during your post-interview debrief.
Consider doing an initial phone screening before doing in-person interviews to avoid spending time with unqualified candidates. During the phone screen, ask the candidate enough carefully prepared questions to determine if they are a viable fit for the position.
Lastly, incorporating a behavior assessment into the process can uncover personality traits that otherwise might not manifest during the interview.
- Extend an Offer – You’re almost there! After you’ve identified your ideal candidate, it’s time to extend an offer. Act quickly—you’ve already made the decision, so why wait? A speedy job offer also demonstrates your desire to have this person join your firm.
Think about the offer letter in terms of total compensation—the mix of base salary, bonus/incentive and benefits that best represent the position and your firm. Any offer presented should be fair to the candidate and in line with industry standards. Reviewing similar job postings or using websites like Salary.com will help you learn about compensation-related trends and best practices.
Along with salary information, include additional details such as job title, location, hours, who the person will report to, etc. This is the time to sell your firm to the candidate. Demonstrate how your firm is a match for the candidate in terms of chances for advancement, new opportunities, benefit packages, or your firm’s unique culture.
- Onboard and Train – Making your office welcoming to your new team member from day one will help ensure you retain key personnel over the long term. A study conducted by the Aberdeen Group indicates 86% of HR professionals feel new employees decide to stay or leave within the first six months. Now is the time to make an excellent first impression of your firm.
Set up technology and system access beforehand, and have their desk/office area well stocked with essential supplies. Build a 30/60/90/180-day training plan with short-, medium- and long-term goals so performance expectations are set from the beginning. In addition, consider sending out a client communication informing them of your new hire and how you’re continuing to build your firm to serve client needs.
About Cetera® Advisor Networks
Cetera Advisor Networks LLC is an independent broker-dealer and registered investment adviser firm that utilizes a unique regional director model to support financial advisors through the entire life cycle of their business. As part of Cetera Financial Group®, a leading network of independent retail broker-dealers, Cetera Advisor Networks is able to build and support regional teams through local service, regional offices and a national home office, facilitating the success of financial professionals.
Cetera Advisor Networks is a member of the Securities Investor Protection Corporation (SIPC) and the Financial Industry Regulatory Authority (FINRA). For more information, see ceteraadvisornetworks.com.