The report noted that certain areas such as client teams and specialized roles have seen a long-term increase in compensation. The increase in total cash compensation from 2015 to 2019 to operations director from $95,000 to $113,000 speaks to the gains in productivity technology is bringing to that part of the enterprise, noted Cobb.
The higher compensation also applies to client-facing roles, which Salvi noted are among the key roles at firms as they grow. For example, the compensation of a senior account manager jumped 19% to $240,000 from $202,000, and client account/relationship manager saw an 8% hike to $105,000 from $97,000.
One of trends Salvi said she is seeing is firms take an interest in career paths. “Firms that truly take the time to develop a career path and write it down really differentiate themselves in the marketplace,” she said.
She said career path should not only include training and certification but cultural attributes that a firm might want to instill in their people, such as leading a committee, community outreach recommending books to read.
Noting that she spends a lot of time creating awareness of the industry among college students, Salvi said graduates want to know that the firm they are joining will invest in their development. And while a lot of larger firms are already developing their staffs, mid-size and smaller firms must follow suit if they are trying to attract next generation of talent. “They can add this into their employee value propositioning during their interviewing process and really get a lot of mileage out of it,” she said.
“The best clients want to work at firms that are attracting the best clients, because that’s where all the opportunities are, that’s where the growth is, and that’s exactly why we are seeing top-performing firms leverage their websites and the other marketing assets they have to not just speak to those prospects and existing clients but also prospective employees” Cobb added.
Setting clear individual team and firm-based goals is another key trend Salvi said they are seeing, hence performance-based incentive pay, which 77% of firms have adopted, the report showed.
“It’s a very important practice,” Salvi said, adding that two-thirds of the firms that compensate this way have a strategic plan, a key differentiator in advisory firms. She further noted that three out four roles are receiving performance-based incentive pay.
Equity ownership also is on the rise. Salvi pointed out that in the past five years, firms between $250 million and $1 billion started equity programs to allow more people to participate in future growth and that created options for firm owners, not just succession but also recruiting and retaining talent, she said.
The report showed equity ownership increased to 33% from 29% in 2018 for firms between $250 million and $500 million, and 27% from 22% for firms between $500 million to $1 billion.
“We have to develop people for long term, we have to create that path and we have to show them the reward that accrues to people who progress down that path,” Cobb said.