As we put the finishing touches to our latest analysis of Australian advice practices and their preparedness for the future, Future Ready IX, we note with interest that during the most challenging of years, Australian advice practices unexpectedly increased their staff numbers. The number of FTE’s rose from 5.5 to 6.1 during this period.
Of course, with extra staff comes added expense. The average practice is now investing almost $500,000 per year in salaries and benefits. This accounts for 48 cents of every dollar of revenue generated by the firm.
This has been a recurring theme in every one of the preceding Future Ready white papers. The cost of people must always to be viewed as an investment which must achieve an acceptable ROI if the business is to remain a viable ongoing concern. Nothing new or particularly insightful I know. But what is perhaps new this time around is:
- These new staff members have largely been hired during a period of lockdown, with many not having met their work colleagues or bosses in person yet.
- While lockdowns forced us all to work from home, many (across all age groups) found they have enjoyed it and are now looking to maintain it in some way. How many times a day do you hear or read about ‘achieving work/life balance’. They won’t be looking to hurry back to their offices on a full-time.
- This has effectively seen the talent pool significantly expanded for staff and employers alike. Location is not the key factor it once was when it came to hiring/keeping staff. (Ditto for clients by the way – a subject for another day).
- There has been increasing reference in our press over recent times to what has been labelled The Great Resignation – people, from all walks of life are voluntarily deciding to call time on their current job. According to Microsoft’s 2021 Work Trend Index, more than 40 per cent of the global workforce are considering leaving their employers this year and while many of these will be working in larger sized companies, the trend is there and will (if it hasn’t already done so) begin to filter down the small businesses – including Australia’s advisory practices.
So, people will be on the move
They’re much more likely today to make or take a call about a new role somewhere else. And if they then decide to make the move, the impact for their current employer may be significant and detrimental.
As to what the small business owner can do to prevent or minimise the impact of The Great Resignation? Staying aware of the trend and influencing factors can help with putting preventative measures in place. The ability to work away from the boss’ office has transformed mindsets and expectations for many workers and will require employers to be flexible, adaptable and innovative.
Proactively consider the question – what could a key resignation or two mean for your business? For most small businesses losing staff has some serious impacts on morale, workload and service delivery, but forewarned is forearmed. Why not take some time and make the effort to keep up to speed with how others are handling this new world? Perhaps talk to peers, colleagues, BDM/PDMs or attend one or two industry events – all good ways to stay informed and gain some new ideas.
For your consideration.