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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
Dear Bev,
We are experiencing an exceptionally high rate of turnover at our firm. We have 29 roles but right now we have only 21 people here, three of whom have been with us for less than six months. The eight “missing” people have all walked out over the last 18 months for a variety of reasons. Two relocated, but six cited the working conditions and said the culture was untenable for them.
I am in a senior-level role here (although not an owner or senior advisor) and I have been with the firm for seven years. We have four partners who are extremely difficult people to get along with. They are all very ego-centric and refuse to listen to feedback or ideas. If you talk to them about something they will tell you directly, “Whatever you are about to say, I’ve heard it before.” To be blunt, they are all very rude. On top of that, they cannot stand each other. They are constantly bickering and backbiting, and I can’t think of a meeting I have been in for the last seven years where one of them didn’t walk out annoyed at what another one said.
Why do I stay? I get paid very, very well for a job I love. While I am in a senior role, I don’t have to interact with the partners very much except to give updates because with my 15 years of prior experience they trust me to know what I am doing. Why am I writing? I see the destruction their behavior wreaks on the firm overall and I am very concerned about the amount of extra work many of my team members are forced to take on. On a percentage basis we are missing 30 percent of our necessary staff and we have newer team members that require oversight and training.
I do not enjoy bringing up issues to our partners but they are less rude and aggressive to me than they are to most people here, probably because I do my job and mind my own business. I am now feeling compelled to say something even if it falls on deaf ears. Do I bother? Do people like I am describing ever change their approach?
K.L.
Dear K.L.,
Your last question is the most loaded one – and one I have heard thousands of times in my career. There are two answers – yes, I have seen many professionals change their approach when they realize what they are doing is not working for them and they need to implement something new. However, there is a big caveat: The person has to be open to listen, learn and see how their behavior is not serving them and why they need a new approach. They have to want to figure out how to change and they have to be desirous of trying something new. When leaders have a big ego and believe they have heard it all and that they are always right sometimes nothing you could say will change their approach.
It’s especially challenging in our business when advisors make a lot of money – like a lot of money – and run their firm in negative and damaging ways. It’s hard to get someone who earns millions each year to say something is wrong that needs to be fixed. I have heard advisors say in the case of turnover, “It’s their problem they didn’t want to stay here.” Attitudes like this can make it impossible to get a message through. I won’t coach someone who isn’t open to hear how they can improve, because there is no point!
In your case, there are a couple of ideas that might work if you approach your partners in the right way. You cannot tell them they are doing anything wrong, and you can’t identify areas they need to improve. What you could do is offer up some information on how expensive turnover can be to get them to consider why they are experiencing so much.
I often quote Dr. Bradford Smart’s great book, Topgrading, when I am doing presentations. Dr. Smart suggests turnover can cost as much as 27 times salary. Take the eight people you have lost over the last year and a half, and multiply all of their salaries by 27. I’m going to guess this is a whopping number! Next you need to add in the cost of training and onboarding, as you are currently doing with the three newer team members and will be doing with the eight hires you have to eventually make. The Society of Human Resources (SHRM) estimates that you will probably spend $7,500-$28,000 in hard costs to find and onboard a new employee, including job board fees, background checks, and the new hire’s training. According to SHRM, soft costs – such as lost productivity – can add up to as much as 60 percent of the total cost to hire.
You might want to drop some of these numbers into an Excel spreadsheet and show them to your partners. It’s expensive not to hire right, motivate and engage employees so they stay and keep people on board for as long as possible.
Dear Bev,
What do you recommend to firms who need to hire and cannot find the right people?
I.T.
Dear I.T.,
This question could qualify for pages of answers. It is a chronic experience throughout our industry. I don’t know from your short note how you have diagnosed your inability to find the right people, so I will share a few things to consider:
- Make sure you are not only sharing a job description but also information about the culture of your firm, how the role fits into your overall firm, and what the opportunities are for engagement and advancement. Job descriptions too often focus simply on the role, but people care about so much more than just what the job entails.
- Be sure your salary is commensurate with other opportunities and you are targeting a number to attract the right people.
- Cast a wide net – don’t just post a job on LinkedIn (although doing this is important, of course) but ask team members to talk to their family members and friends, talk about your firm everywhere you go (for example, at your gym or place of worship). Join clubs in the industry to meet people, go to conferences and events. They say looking for a job is a full-time job; so is trying to find the right person for your firm.
- Get known on social media. Post about what your firm is doing and show what a great place it is to work.
- Be sure in the interview process to “sell” who you are as much as you try tryto figure out whether the person is a right fit for you.
Not knowing much more about what you’ve done – and what’s worked and what hasn’t – I hope this can give you some ideas to consider. Like anything known to be difficult, you have to persevere, try new things and keep on pushing!
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. The firm has won the Wealthbriefing WealthTech award for Best Training Solution for 2022, 2023 and 2024. Beverly is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. She is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
