Hiring and Retention Trends

PizzichilloFrank Pizzichillo, AIF®, RIA Regional Director

The long-term viability of an independent RIA rests, in large part, on its ability to attract and retain top talent. The fact that 12,000 to 16,000 financial advisors will retire for the next ten years has fueled intense competition to attract the next generation of stewards of our nation’s wealth.

As a result, many RIAs have had to rethink their employment practices in recognition of the shared characteristics of the four generations now in the workforce.

Compensation is a critical lever an RIA must get right when it comes to building long-term sustainability into their firm. To get compensation right, an RIA must consider the generational and motivational factors that drive your employees’ approach to work.

WHAT WILL MOST LIKELY CONTRIBUTE TO YOUR FIRM’S SUCCESS IN THE NEXT 1-2 YEARS?

Elite_Advisor_Survey

Source: BlackRock, The 2015 Elite RIA Study

Generations and Motivations

Many factors shape the way people approach work, including when they were born. Some RIAs have employees spanning four generations:  The Silent Generation (born between 1925 and 1946), Baby Boomers (1946-1964), Generation X (1965-1980) and Millennials (born after 1980). Each generation has distinct attributes, shaped by their life experiences and the values they have embraced along the way.

Take Baby Boomers as an example. Generally speaking, Boomers have been defined by their work. They take pride in knowing they’ve done a job well done, and for the most part, believe rewards will follow. Employment perks and titles have meaning to those in the Boomer generation. The concept of a work/life balance as critical to overall well-being didn’t come into acceptance until long after they had established their professional identities.

Generation X employees have a different approach to work. They tend to be less formal, and question authority. They were born during a time of declining population growth and lived through downsizing environments. They are global-thinkers, self-reliant and resilient. These characteristics make them adaptive to job instability. They value time spent away from work, and would be willing to sacrifice pay to strike the right work/life balance. Money and perks don’t hold the same allure for Gen X as they do for Silent Generation or Baby Boomers.

Total Rewards System

When building for sustainability, an RIA should aim for a total rewards system with cross-generation and motivation appeal. A total rewards system integrates pay, benefits and overall experience . . . the key elements that employees value the most. Done right, a total rewards system provides the benefits employees value greatest, while also reinforcing the RIAs culture and enhancing the overall work experience. Non-compensation programs which become key components of a total reward system include work-life initiatives, such as wellness programs, flex time, and work-from-home initiatives. They also include training and development programs, and peer and corporate recognition opportunities.

A multi-generational team working towards a common goal can provide an RIA with a significant competitive advantage.  The key is to embrace the perspectives and approaches each generation has to offer and create a flexible work environment and total rewards system that values and motivates everyone, regardless of age.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, a Registered Investment Advisor.

Block It Out

Distractions are a major issue every financial professional must battle.  Although technology is pigeon of distraction, it can also be used to help you regain focus.

Bombarded by interruption technology while trying to give clients individual attention and run a successful practice, many advisors feel overwhelmed.

Interruption technology comes in many forms such as e-mail, text messages, Tweets, and Facebook pokes.  While these tools have helped us gain effectiveness in some respects, it has diminished productivity by other measures.

 Think you are multitasking?  Think again.

As its name implies, multitasking involves completing different tasks simultaneously, with the end goal of increased productivity. If you can generate a proposal while on hold with a client, you have successfully multitasked. While we used to extol multitasking abilities, the term falls short in describing what most advisors are doing today.  They are not multitasking.

Most of us switch-task, not multitask.  Our attentions are pulled from one task and drawn, most frequently by interruption technology, in another direction.

If you are composing an e-mail explaining a complex financial strategy and you impulsively toggle over to ESPN.com for last night’s scores, you have switch-tasked.  It could take several minutes to regain your focus on the e-mail, hence a decrease in productivity.  If you are Tweeting while talking to your client on your cell phone, your client is probably aware that you are listening with only half an ear.  Eventually, your retention rates will suffer.

It’s easy for us to think we can seamlessly jump from one task to the next and give everything our full attention, but we cannot.  Our brains are not hard-wired for switch-tasking.

The University of Kent sought to establish the impact of switch-tasking.  They set up an eyeball-tracking camera to monitor eye movements of 100 people.  The participants read passages on computer screens and while reading, they were interrupted with one-minute tasks, such as phone calls or e-mails.   After the interruption, they went back to their reading.

Once interrupted, it took participants 17% more time to read the original passage than if they read it straight through.

Block Distractions

There are many ways you can shield yourself from distracting digital stimuli.

You can tend to e-mail only at certain times, turn-off your mobile device, and schedule your social networking engagements. You can download productivity software to block Internet distractions.  Programs such as Freedom, Isolator, LeechBlock, Menu Eclipse, Think and Turn Off the Lights, and Anti-Social serve much like parental controls.  For many of these programs, you set an amount of time that you want to work uninterrupted, and the software blocks unwanted content during that time period. Also, many word-processing packages like Ulysses, Scrivener, WriteRoom, Dark Room and Writespace, offer full-screen, no-distraction modes.

The rationale behind these is a clear computer helps clear the mind.  If you are shielded from interruption, you can tackle the task at hand.

The bottom line is this:  if left unchecked, technology can get the best of you.   Exert control over your technology so that it adds value, helps you improve the client experience, and makes you more productive.