We’ve all heard it said that “people are your greatest asset”.
While the statement may sound hackneyed, the sentiment is now fuelling a battle for talent in our industry.
Financial planning businesses Australia-wide report retention of key employees as their current number one HR challenge.
As knowledge, software systems and products are becoming increasingly standardised, it’s now the people who provide a competitive advantage.
Exceptional service, the ability to develop valuable relationships with clients, and the opportunity to establish your reputation as a trusted service provider are all key differentiators in a cluttered marketplace.
But actually retaining the talent capable of delivering for you is becoming a burning issue for many businesses as a result of Australia’s looming skills and labour shortage.
With unemployment at near 30-year lows, and an ageing workforce, it’s becoming increasingly hard to find quality candidates.
Alison Loader, head of Profusion Financial Planning elaborates: “One of the biggest challenges our clients face is sourcing highly qualified, experienced staff. Recognising this, our clients have become much more focused on retaining the talent they already have.
“Losing key people is inefficient, and potentially expensive. Research suggests that it can cost you up to three times a person’s salary to replace them. This doesn’t account for indirect costs like reduced morale, lost productivity, or loss of clients who follow your ex-employee.”
Profusion works with businesses to hire and retain top performers and also to make the most of employees’ potential.
Hire, develop and retain
Over the past two years Profusion has listened to advisers in order to better understand their people issues. The result is a ‘hire, develop and retain’ (HDR) program that’s been well received by the industry.
Peggy Barker from Barker Wealth Management in Adelaide attended the workshop in August 2005: “The [program] helped me realise how important it is to engage our people, and involve them in the business… Today, it’s [your employees] deciding to stay with you, not you deciding whether to keep them. So you have to respond if you want to retain your top people and remain competitive.”
Loader says a typical financial planner running their own business has limited time to spend on people issues and therefore demands easy-to-use resources and to know that their efforts will pay off, and quickly.
“The trick is knowing which initiatives have the greatest effect on your people. People respond differently to certain retention and development strategies and without understanding your employees’ motivations, you risk investing time and money ineffectively.”
A diagnostic process that starts well before the hiring process is key.
Understanding turnover
What are the current causes of turnover? What are your people motivated by? In a competitive hiring market, what’s your ‘offer’ to employees, or your ‘employee value proposition’? Do you know the kind of workforce or team profile needed to achieve your business goals? And finally, have you embedded an effective recruitment process?
Determining current causes of turnover and employee motivation factors need not be laborious, time consuming and/or expensive. You simply need to know what is causing people to leave, and what gets people motivated so that you can redress (or reinforce, as the case may be) the issues and make changes to the workplace.
Motivators
Knowing what motivates your employees will enable you to design and implement programs that hit the spot.
Exit interviews, a simple online employee satisfaction survey or face-to-face interviews conducted by an external and independent person will provide the answers.
With this information at hand, spending time and money on the priority issues will be effective and rewarding.
Employee value propositions
An employee value proposition (EVP), similar to your client value proposition, describes the complete package for an employee of your business. It sums up everything people experience and receive while they’re part of your team, in return for their effort, commitment and contribution.
One approach is to look at the current, often unarticulated, EVP, identify gaps and brainstorm potential strategies to fill these gaps.
The EVP becomes a powerful tool, used both in advertising and interviews, as well as for the retention of existing employees.
A clear statement of what you offer employees helps manage expectations appropriately on both sides. As employees place greater demands on employers, there’s a fine balance to be struck between over-promising versus selling the opportunity on offer and the company’s expectations.
What sort of workforce do you need?
Knowing the make-up of your current team is the ideal starting point for hiring — what skills and experience are required to build that team to deliver the business targets? This kind of strategic, best-fit recruiting coupled with a positive work environment (and accurately portrayed EVP) will more likely ensure higher retention rates.
Just how good is your recruitment?
Once you know what type of people you are looking for (competencies, experience, qualifications, and so on), you can design the role advertisements, interview questions and recruitment process to target these people.
Having a clearly-defined, documented process ensures consistent decision-making each time you recruit. It also means the typical time-poor business owner does not need to manage the entire procedure, but can get involved in the latter stages when a final decision is required.
In short, says Loader, a robust and effective recruitment process ensures you bring people into your business who will stay. This delivers efficiencies, whereas the alternative — ad-hoc recruitment — is a sure-fire way to high employee turnover.
With the employment market continuing to tighten and employees demanding more from their employers, retention has never been such a hot issue.
Rebecca Harper is a people management specialist at ProfusionHuman Capital .
