The business cost of losing a staff member
While hiring new staff in a financial advice practice inevitably incurs expenses, Striver’s Alisdair Barr uncovers the greater cost of losing a valued team member.
Staff recruitment and retention has become one of the top priorities for the advice profession, with the number of advisers departing still greater than the flow of new entrants.
Research from BT previously found that three-quarters of advisers are struggling with staff recruitment. Commenting on this statistic in July, Matthew Rady, BT CEO, said: “We know we have a shortage of financial advisers in Australia. While we are seeing new entrants choosing careers in financial advice, they do not make up the number of experienced advisers who have left the industry.”
The difficulties surrounding staff recruitment underline the importance of retaining quality staff when they do join an advice team.
With this in mind, Barr, founder and CEO of Striver, emphasised the significant cost impact that comes from losing valuable team members within an advice practice.
“While bringing staff on incurs expenses, losing staff can have an even bigger impact: there’s loss of productivity, downtime, recruitment fees, onboarding fees and so on,” he said in a new report from Advisely, Iress’ community platform.
Some estimates even said that losing a valued team member could end up costing 150 per cent of an annual salary, the founder quoted, in addition to the risk of poor hiring decisions due to the urgency created by losing a valued employee.
To avoid this from occurring, Barr encouraged practice principals and advisers to nail down their employee value proposition proactively from the start to attract, engage, and retain talent.
“Develop a clear employee value proposition that suits the goals and lifestyles of the talent you’d like to attract and retain. If you were looking through the lens of people working in the firm, what do you think they’d say about it? Would they want anything done differently?” Barr said.
“What’s the competitive edge you offer employees that they won’t get elsewhere? If you’re unsure, your best bet is to ask your most loyal employees about it: what makes them want to come into work every day?”
Formalising an effective employee value proposition is not just good business practice, but also a form of risk management, the founder said, to prevent quality staff from looking elsewhere in a tight labour market.
This is particularly critical in light of Robert Half research last month that found half of employees said they are willing to switch careers in the next 12 months. The top reason why staff have said they are considering a change in jobs is to improve their work/life balance as they feel their current role does not suit their lifestyle.
AUTHOR
Jasmine Siljic
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