The success of your business is largely in the hands of the people who work for you, and the relationship you and your team have with your clients is in essence your business’ secret sauce. It follows then that one of the most important decisions you can make — a decision that has lasting impact on the long-term success of your business — is who you choose to hire.
Yet it never ceases to amaze me that the recruitment process at most firms is an afterthought — meaning there is not a systematic approach for determining who to hire. Hiring should be part of your strategic plan and you should apply the same vigor and discipline to your firm’s recruitment process as you do when constructing financial plans for your clients. These five steps will help:
1. Make hiring a strategic priority for everyone at your firm.
Most often recruiting is a reaction to someone quitting or retiring. A better approach is for everyone in your firm to be constantly on the lookout for your next best recruit — in much the same way that you are constantly searching for your next best client.
Make your senior team members responsible for generating leads from specific recruiting channels, such as professional associations and alumni networks. Hold them accountable for quarterly networking activities that can lead to interviews with qualified job seekers. One great way to solicit help from everyone on your team is to offer a cash award for successful employee referrals. Your staffers know better than anyone what it takes to succeed at your firm, and when they recruit a new hire, they take ownership of the new recruit’s success and help with the onboarding.
2. When hiring, clearly define the role and responsibilities of the position.
These expectations should be written up as a well-articulated job description and used as a marketing piece to inform and attract candidates for the position. The description can be posted to your firm’s website, on associations’ websites (FPA, CFA, etc.) job boards (LinkedIn, Indeed.com, etc.) and other sources you use to attract and recruit employees to your firm.
Job postings not only include the duties, qualifications and reporting relationships for a particular job, they also describe the position in a way that makes it appealing to candidates. Think of this as your marketing piece, so make it attractive to job seekers.
Clearly defining the job and its requirements, including education, experience and particular skill sets, also helps expedite the interview process. The job description serves as a set of guidelines for evaluating each candidate against the requirements of the role.
3. To find the best match, create a disciplined interview process.
To conduct an effective interview, use your job description to craft questions that compare an applicant’s knowledge and abilities with the role as you’ve defined it. These should also take into account how well their traits align with your firm’s culture.
Communication and people skills, judgment and decision-making abilities, and personal motivation and values are all important considerations for the interview to cover. Candidates should be screened for the things you can’t teach them: values, work ethic and their general attitude. The best interview questions solicit information about a candidate’s past performance, because this is often the best predictor of future performance.
To consistently hire great people, you need multiple perspectives, so it’s a best practice to involve all the firm’s key decision-makers in the interview process. Since numerous one-on-one interviews can be inefficient and time consuming, consider using hiring panels consisting of several people. These panels can be especially useful in gauging how potential candidates are likely to interact with other employees.
Also keep in mind that the interview process is a two-way street and that while you are interviewing the candidate, they are also interviewing you and the firm. So make sure to clearly convey the benefits of joining your advisory firm and what sets you apart from the rest of the field.
4. Employ tests to more fully evaluate the candidate.
To get beyond the resume and the typical interview format, techniques such as written tests, role-playing and simulations can be used to get a fuller sense of an individual’s persona.
Third-party assessment tools such as Kolbe, DISC and StrengthsFinder are useful indicators of how well-suited a candidate is for the job in question. Many advisors use a financial planning case study to gauge a candidate’s technical proficiency and skill at client relations.
To ensure fairness and a consistent set of measures, be sure to always administer your tests at the same point in the hiring process. Frequently, this means reserving any testing for the final round of candidates at the very end of the selection process.
Some firms shy away from testing because of concerns about the costs. Yet testing is far less expensive than the cost of a bad hire. The cost of replacing an employee ranges from 30% to 50% of that employee’s annual salary, while for senior-level positions and jobs requiring more extensive skill sets, turnover costs can run even higher.
5. Develop an onboarding process.
Planning for a successful transition from prospective employee to new hire is something that many firms overlook. A strong onboarding process provides information, training and coaching, and begins as soon as the candidate has accepted your job offer.
As you welcome new employees to your firm, you have a unique opportunity not only to gain their trust, but also to instill confidence that they have chosen a great place to work. When managed well, onboarding fosters employee engagement and contribution in line with expectations.
Important elements of a successful transition plan include introducing the new hire to his or her new coach or mentor; identifying goals and objectives for the employee’s first 90 days on the job; scheduling training and ensuring regular follow-up meetings. Your new hire is excited about joining the firm and wants to contribute and demonstrate their value, so make sure to assign short-term projects that provide opportunities for early success.
A major challenge for RIAs seeking the next level of growth is finding the right people to join their organizations. If your firm lacks a recruitment strategy, then you will be at a significant disadvantage when it comes time to seek out and hire people who can really contribute to your business and flourish in your culture.
The successful recruitment and selection of talent adds depth and breadth to your organizational structure, increasing the skills and capabilities of your entire team. Don’t lose out in the competition for the best talent because you neglected to put a recruitment process in place that brings lasting benefits to your firm and your clients.
Kelli Cruz is a Financial Planning columnist and the founder of Cruz Consulting Group in San Francisco. Follow her on Twitter at
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