As most business owners tell us, it’s hard to find (and then keep) good people – especially in an industry such as financial services, whose image has been somewhat tarnished over the past two years. Overlay this with newly emerging industries (read exciting) who are competing for good people, it’s clear that the battle to find and retain is getting harder for advice firms.
Some key stats derived from our latest analysis of Australia’s advice businesses (Future Ready VIII) add important context to this discussion:
- Salaries for staff/advisers (assuming $100,000 per owner) comprise 56% of the average practice’s total annual expenditure, while further equating to 44% of its revenue
- The ratio of support staff to adviser is 1.1:1
- One support person is supporting 223 clients
Clearly, it’s important for practices to invest time and effort into building a quality team of people and, once done, ensure the team is leveraged to its full potential.
It’s disappointing to note that almost half (48%) of the practices in our latest analysis, still do not have up to date position descriptions for all of the roles in their firm, while 46% do not have agreed and documented performance objectives for the majority of their staff.
Somewhat surprisingly given this lack of role clarity and agreed performance deliverables, 86% of firms stated they have recently formally reviewed each staff member’s remuneration package against the appropriate workplace agreement, industrial award and/or the market. And 51% also offer a staff incentive/bonus program – although we question how effective these programs can truly be if they are operating with a lack of role clarity and performance measures.
If we accept that the majority of people want to improve themselves, both personally and professionally, then regular feedback is also essential for this improvement to be encouraged and achieved. It was therefore very pleasing to see 80% of principals reporting they have conducted performance reviews/appraisals with all of their team members in the past 12 months.
Open, honest and frequent communication is healthy for every business.
It not only affords an opportunity for staff members to raise any issues or concerns, but it also facilitates the free exchange of ideas in addressing unique client challenges, exploring new opportunities and suggesting enhancements to processes and procedures. It was therefore pleasing to see that 71% of businesses now hold regular weekly or fortnightly team meetings involving most, if not all, of their staff.
However, staff members want to know not only what their individual goals are, but also the longer-term plan and vision for their company – what will their company look like in 5 years’ time say? After all, without a clear understanding of where the business is heading, it can be very difficult for staff to buy into the end goal.
It is further disappointing to note that one in three owners (31%) have not even shared their high-level business goals for the upcoming year with all of their staff.
71% of practices reported relatively low staff turnover – less than a quarter of their current staff members have joined their team in the past 12 months. This excludes those who joined because of business growth or expansion and is in line with the 75% recorded previously. However, economic and employment conditions can sometimes stem the tide of employee turnover. When conditions improve in the employment market, staff attrition rates can rise. The time and financial costs of hiring and training new employees offer plenty of incentive for owners to work hard at improving the culture of their firm in order to retain valued and productive team members.
Almost half (46%) of the principals thought their staff would rank the morale in their office as “Very Good” and less than 1% thought their staff morale was “Poor/Very Poor”. While many owners are quite good at identifying issues that affect the morale of their team, generally speaking they consistently overestimate their employees’ overall perception of firm morale – typically assuming that their employees are much happier than they actually are. Consequently it was disappointing to see that one in four practices had not sought any feedback from their staff in the last 12 months, and, of the majority who had, a mere 6% had used an independent third party to seek feedback from their staff.
While clearly there’s a lot of positives coming through this analysis in respect of people management, we suspect that the area of team communication is one which requires much more thought and attention – particularly around the practices’ future plans, goals and progress towards them.
Now, remind me again – why am I working for you?
For your consideration.