As a financial advisor, going independent can have many pluses: The ability to provide objective financial advice to your clients and the freedom of running your own business, to name just a few. But with business ownership also comes the role of managing day-to-day operational tasks, such as hiring office staff.
Employing talented employees is an integral part of creating a satisfied workforce and a productive workplace. But it takes time and the know-how to find high-quality talent for day-to-day business support. With the U.S. unemployment rate reaching new lows, competition is ever increasing. Adding to the pressure is the statistic from a recent study that found that two out of three employers in the United States reported making a hire that did not meet expectations. The risk of a bad hire, according to an estimate by the Department of Labor, can equate to three to five times the individual’s first-year earnings—no small sum for advisors running their small independent businesses. And more than the cost, a bad hire can have a negative effect on other aspects of your business such as client relations and office morale.
Given this challenging landscape, here are five tips for advisors looking to hire the best talent and build a winning team:
1. Identify the talent need. Identifying your talent need is key to making a hiring decision that meets your expectations. To help ensure that you will make the right hire, evaluate what specific job duties will be most impactful to the business, to your clients and to you. Focus on two to four non-negotiables and make this the key criteria for your new hire. A few important questions to consider include: What was missing in the last role? What has changed in your organization? What knowledge, skills, experience and education are critical? How much time and money are you willing to invest to train the candidate if they meet all other requirements? By answering these questions on the front end, you will be better positioned to hire the right person for the position.
2. Proactively search for talent. The types of skills you are looking for in a new hire will help you determine the best avenue to source a candidate. There are multiple resources to consider, including social media, employee networks, universities, local job boards and employment agencies, in your effort to explore sourcing options for new hires.
3. Be consistent with the interview process. Prior to each interview, review the job description and candidate’s resume as well as prepare an interview guide with five or six questions that you will use with every candidate. To help save you time, a phone screening with each candidate will allow you to effectively narrow the applicant pool. If the candidate seems qualified to meet your pre-determined talent need with the right education, technical skills and experience, schedule an in-person interview and assess their qualifications based on secondary categories including: will do (motivation, willingness) and team fit (culture and brand alignment/representation).
4. Utilize behavioral interviewing techniques. Behavioral interviewing involves asking for examples of how employees have performed in certain scenarios in the past and serves as a good indicator of how a candidate will perform in a particular situation in the future. Be sure to frame the questions as open-ended and encourage candidates to provide specific examples. In addition, follow-up or probing questions can be useful to clarify responses and gain more insight into the candidate’s behavior.
5. Avoid common hiring traps. Be aware of common traps that many hiring mangers fall into when interviewing job candidates. These traps include self-mirroring, or hiring someone just like you, hiring too quickly based on business needs or just “needing to fill a position,” utilizing an inexperienced interviewer, having too many or too few interviewers to make decisions and hiring based on personal biases such as prejudice of school, geography or other reasons. It’s also important to differentiate between a good interview and whether someone is good for the job and even when you might be working with a weak candidate pool and should consider starting again.
As an independent advisor, building a support team is critical to a business’ success. The right employees in the right positions contribute to a more satisfied workforce, better client service and a more productive and efficient business. Filling an open position is too important of a decision to not invest the time and resources to find the best candidate for your office.
Ricardo Meneses is vice president of human resources at LPL Financial and Nick DiMasi is a senior staffing consultant for HR Partners at LPL, which provides staffing services for advisors filling operational and administrative roles.