Author: Angela Cappello Sarver

When it comes to recruiting and retaining talent, the competition is fierce. In ads for new hires, large companies can boast about the broad array of benefits and high salaries they offer. But smaller firms lack the advantage of economies of scale, so it’s usually not feasible for them to provide robust benefits or pay above-market value for a position. Does that mean small companies can’t compete when recruiting or retaining talented staff? Not necessarily.

Although benefits and salary are important, they’re not the only criteria important to candidates and employees. In a survey conducted by the Financial Planning Association (FPA), work environment was the principal driver of employee satisfaction while benefits offered came in fifth.

Employees want to work where they’re appreciated, where their work is impactful for the firm, and where they are continually challenged. To effectively recruit talent, it is critical to articulate how the employee experience at a smaller firm can rival—and even exceed—that of a larger one. Creativity and flexibility can drive improvements in your culture, allowing you to help cultivate a rich employment experience.

AVENUES TO DIFFERENTIATION
Following are some ideas for differentiating yourself from the corporate competition:

Speak to what makes the work experience at your firm unique. Unlike in larger companies, employees in small firms work closely together, and this can provide a competitive edge. Moreover, when you work with 40,000 other employees, it’s difficult to stand out.

Large companies typically have a hierarchical structure, where job roles are specifically defined. In smaller firms, like those of a financial advisor, employees may organize a client event one day and work on cost basis the next. A smaller firm may not provide vertical growth, but a great deal of horizontal learning takes place. This helps keep employees engaged.

Begin with the job description and job ad. In 2011, recruiting has been difficult and frustrating for many advisors. We’ve learned that, while unemployment is still at an all-time high, many qualified candidates are likely to be employed. Many a candidate has expressed concern about leaving a job, as the markets are still volatile. If the employee joins a firm that later experiences financial difficulties, he or she expects to be the first person laid off.

You need to address these concerns from the beginning. Although a job description is intended to capture the most important tasks associated with a position, it’s also an opportunity to illustrate potential growth. For example, many advisors have successfully developed administrative staff who assume responsibility for cost basis, RMDs, product research, and more. In your job description, you can note that there may be potential growth opportunities. This can show candidates and employees that working at a smaller company doesn’t equate to zero growth.

When you create a job ad, highlight your own years of experience, the group of established clients with whom you work, the strong reputation you’ve earned, and so forth. This can alleviate concern that your firm has an unproven track record.

You may also want to appeal to candidates who have an entrepreneurial spirit by referencing the flexibility that the job you are advertising can offer to contribute across many disciplines. Just as you would market yourself to a prospective client, you should market yourself and your firm to a potential employee.

Bridge the benefits gap. Our experience with advisors is that most provide some level of benefits to employees, primarily in the form of paid time off (PTO) and a retirement plan like a SEP- or SIMPLE IRA. Within that framework, they have adopted a number of creative benefits solutions to distinguish their firms from larger companies.

• Money is important but not always a strong motivator. As many people struggle to maintain a work/life balance, time off has become a valuable incentive. Some of our advisors have revised their benefits to include additional PTO to attract and retain talent. In cases where long-tenured employees have reached the maximum base salary, this benefit is a way to continue motivating them to perform at a high level.
• Creative ways to provide medical benefits. This is probably the single greatest challenge advisors face. First, not every advisor offers health insurance. For those who do, some have adopted creative solutions, such as:
• If a candidate or employee has coverage elsewhere, the advisor provides a small stipend (e.g., $400) to help with co-pays or other costs not covered by the medical plan.
• If a candidate or employee requires medical coverage, he or she can explore possibilities with companies like Benefit Protect. It serves as a broker to negotiate individual and small group policies.
• Some advisors have asked candidates or employees to purchase their own health insurance, offsetting the cost by contributing specific amounts toward premiums. In this way, an employee has the flexibility to select a policy that provides the right level of coverage at a rate that is affordable for him or her.

• Flexible work arrangements are another option. If you can accommodate a different schedule, like allowing an employee to work from 7:00 A.M. to 4:00 P.M., instead of 8:30 A.M. to 5:30 P.M., or offering an employee the option of working four days a week for 10 hours a day, it’s a simple solution for attracting and retaining workers.

Technological advances have made it easier to work from home. Although this may not be an option for every advisor, some have offered this arrangement successfully. Determine whether or not it would work at your firm. Try it for a period of time and then assess the experience. Did you have the right level of coverage in the office? Was the employee productive when working from home? This gives you the chance to adjust or eliminate the arrangement.

• Other perks. Think about your business and professional network and determine whether there are other perks or benefits you can consider. For example, some advisors offer a company-paid life insurance policy, short-term disability, or discounted tax services through their professional contacts.
• Consider tuition reimbursement. You can deduct the reimbursement amount from your taxes (the maximum is $5,250 annually). In addition, you’re taking a big step toward creating an environment that supports and fosters continuous learning.

Take it further. Have employees whose tuition you’ve reimbursed lead a meeting where they present a concept or idea they’ve learned and explain how they plan to put their knowledge into practice. It’s unlikely that the CEO of a major corporation is giving his or her employees this type of personal attention!

Reassess your compensation structure. In a webcast conducted by the FPA last year, changes in compensation structures were addressed. Many companies (and advisors) are getting away from merit increases (i.e., where a base increase is provided simply because a year has passed). Performance-driven plans offer more flexibility and provide control over fixed expenses. To earn base increases, employees must demonstrate that they’ve enhanced their skill set in a way that enables them to contribute to the firm at a higher level. This approach also addresses the entitlement mentality, as base increases are not guaranteed.

The advisor gains more flexibility by awarding a greater portion of the employee’s salary through an incentive program tied to specific goals agreed upon by both parties. The employee also has control over the goal and understands how what he or she does affects the firm.

FIND WHAT WORKS FOR YOU
Although adopting all of these recommendations may not be realistic, selecting and implementing one or two may allow you to close the sale so you can attract and retain highly qualified people. Recruiting and retention will become even more competitive in the months ahead. Making adjustments now could mean the difference between hiring outstanding employees and having staff who are merely adequate. This could have a major impact on your business in the future.

Angela Cappello Sarver is a staffing consultant in Practice Management. She is available at asarver@commonwealth.com.