However, industry people specialists the SR Group sees the biggest challenge of the new year is how to bring our people on the journey to a changed world.

SR Group predicts there will be two main ways forward for wealth management leaders, c-suite and HR departments in 2021:

• INWARD-focused organisations and leaders that seek to repair the damage caused by COVID, cut-costs and make operational tweaks to get back to where they were before the pandemic, and those that
• OUTWARD-focused organisations and people whom embrace the opportunity to rebuild for the future, become more innovative for the changed world.

These two types will retain and attract very different types of employees and human resource departments responses, said Cathy Doyle, Chair of SR Group (including the transformed SuperRecruiters, SR Consult and SR Research).

Prepare for the future now

“The ‘future now’ organisation requires an increased focus on the people, the human aspects of business; rather than the processes and operations of those trying to get back to where they were,” says Ms Doyle.

“The pace of change is increasing, and we need to ensure roles – and our people – going forward are able to not only keep pace with that change, but to also develop new ways of doing what and will be required,” she said. “This is one of the greatest challenges for not only HR leaders, but all of the c-suite in 2021.”

Roles in demand

SR Group expects the roles to be in greatest demand in 2021 will be:

• Data management and analysis, as well as
• Cyber security.

“Wealth management organisations will all need internal cyber security experts, not just more risk managers.”

War for talent increases

The ‘war for talent’ is also expected to increase in intensity, noted Ms Doyle, as organisations compete for the pool of proven performers who can deliver results. “Now, there is an even smaller pool of talent that can work from home and deliver results. “Every hire is crucial today and some people aren’t going to be successful working from home, be it full or part-time”.

She suggested personal attributes that HR departments look for in potential, and even existing, employees include higher levels of:

•  Self-motivation,
• Resilience, and
• Mental agility, as well as
• Empathy.

HR leaders also need to increase their flexibility. For example, many employees were looking to continue working from home two days a week. “We have cases where people are leaving roles where they were required to be in the office five days a week for a similar role where they could work from home. Flexibility of work location is as valuable to employees as a bonus or other benefit.”

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How do you hire while maintaining social distancing?

While the nation-wide impacts of the COVID-19 pandemic will result in a surge in unemployment in our wealth management industry (with forecasts of over 11% national unemployment), some planning groups are still hiring – as regularly reported in the trade press.

Casuals were one of the first segments to be let go, with contractors soon following, notes Super Recruiters.

That said, the specialist wealth management industry search firm notes there are still roles that need to be filled – with demand still solid for experienced financial advisers. “There are several high quality financial advisory groups that are taking this as an opportunity to shore-up their business and even grow.”

Super Recruiters notes that demand is strongest for qualified planners that can bring a book of clients with them to a new home. Salaried roles are a less in demand.

How do you hire while maintaining social distancing?

Social distancing means that the industry’s hiring, management and engagement processes need to be altered, Super Recruiters suggests, noting that there are ways to recruit without actually meeting people face to face. “And these ways actually work better than traditional hiring methods.”

Research by LinkedIn found that traditionally the majority of candidates hired are selected on ‘gut feel’, despite the fact this is successful^[1] only one in seven hires. These are low odds for success and investment owners and managers would not invest in a company with those odds. Yet this remains how most financial services HR departments hire. The fact is that traditional resumes and job interviews alone are poor predictors of actual job performance; as interviewees give rehearsed answers and interviewers pick candidates they like rather than those whom have a proven track record of delivering results.

Almost two-thirds of HR teams admit their traditional interviews failed at assessing candidates’ soft skills, according to the LinkedIn research. “Now is a good time to transform this!”

The solution

LinkedIn also notes that over three-quarters of candidates find their next role through a contact. Inhouse HR, which is rightly increasingly undertaking their own recruiting, needs to recognise this fact and harness it. This means that upon receiving a role brief, HR departments should search for whom would be best at that role, who has excelled at it in the past – and then reach out to them.

Wealth management organisations now more than ever need the best in the industry and those in the industry know who they area, those who can deliver results – and the only way to assess that is through referrals. Start this referral process even before seeking resumes.

“Cashed up companies are seeking to bolster their talent pools – but on a selective basis.

“When the pandemic ends this will turn around rapidly and companies will scramble to rebuild their teams. Those companies that have treated their employees with care and respect will come through this period well positioned and will be viewed as employers of choice.”

——–

[1] Over more than two years of successful service

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Sally Humphris

As the nation’s financial services industry continues to focus on its greatest-ever remediation efforts through 2020, the leaders of many institutions have overlooked one of the most important areas requiring remediation.

The boards and leadership of most impacted organisations, including some of the biggest listed companies in the country, are missing remediating the cause of most of their problems identified by the Hayne Royal Commission, notes three of our industry’s specialist recruiters.

“Few of our financial services organisations have recognised that their problems were not caused by processes or by technology, but by people,” says Sally Humphris, Executive Director at specialist wealth management industry recruiter Super Recruiters.

Ms Humphris cited how APRA recently described the risk and compliance functions of the nation’s largest financial institutions as being in need of urgent overhaul. Institutions have staffed these departments with many additional people, but these people are not necessarily addressing the problems, according to APRA, she noted. “This suggests institutions need more skilled people with proven performance and expertise who can make a difference, not just more risk department headcount.”  

“This highlights how many of the financial services industry’s hiring, management and engagement process need to be remediated.

“Many industry leaders have not begun thinking about how to remediate this major problem. They continue to use those same out-dated HR department screening and selection processes. This needs to change in 2020.”

The people problem

Ms Humphris cited research by LinkedIn that shows the majority of candidates hired are selected on ‘gut feel’, despite the fact this is successful[1] only one in seven hires. “These are low odds for success and investment owners and managers would not invest in a company with those odds. So why do their HR departments? Yet this remains how most financial services organisations hire.”

“Research clearly shows that traditional resumes and job interviews alone are poor predictors of actual job performance. Interviewees give rehearsed answers and interviewers pick candidates they like rather than those whom have a proven track record of delivering results.” 

She added that further research by Harvard Business School[2] shows that 90% of business strategies fail due to poor execution. “Our institutions require candidates who are proven delivers more than ever.” 

The LinkedIn research also showed that almost two-thirds of HR teams admit their traditional interviews failed at assessing candidates’ soft skills. Yet it is these soft skills that organisations are increasingly looking at assessing for cultural change. Ms Humphris added: “All organisations want to ensure they are employing people with the values of honesty and integrity they require in order to match customer and community expectations as highlighted in the Banking and Financial Services Royal Commission. To do so, they need to transform their hiring processes.”

Technology alone is not the answer

James Lai, Director of HR tech firm Meetig8, said: “The recruitment process needs to be transformed in many financial services organisations in order to better consider candidates’ past performance and cultural fit, not just in their own words, but also from past and present colleagues. This can be done, combining both improved technology and more objective people skills.”

“Wealth managers don’t invest in stocks and companies the way they invest in people. They do much more research, assess past performance to select proven performers. It should be the same when it comes to hiring people. It is also important to look at what lessons candidates learnt from any past poor performance and also their values and cultural fit with the organisation.

“There are many people with a history of poor performance and cultural fit that can undermine an organisation and lead to the issues that we have seen brought to public attention through the Hayne Royal Commission,” said Mr Lai.

Paul O’Brien, principal of risk consultants Riskwise Professionals, adds: “We all know how hiring the ‘wrong’ person to an organisation can cost time, money, clients and reputation. It is time our industry leaders removed the risks that have been, and in many cases still remain, inherent in their HR departments. 

“2020 is the time to transform our industry’s financial services people practices.” 

Super Recruiters’ recent Super Industry Issues 2020 Report[3] found many c-suite leaders were uncertain as to how to transform their human resources practices, with almost 40% not happy with it. But less than a third expect to transform it for the better – see charts in the attached. 

——–

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Sally Humphris

Employment prospects are looking up in our industry. “A third of wealth management organisations recently surveyed said they expected to hire more employees this year (32%),” notes Sally Humphris, Executive Director at specialist wealth management industry recruiter Super Recruiters.

“Two out of five (42%) expect to maintain staff numbers at current levels.”  

Interestingly, none said they planned to downsize, she said yesterday. “Though 16% said they expected to replace some roles with technology.”

 The roles expected to most in demand in 2020 are:

• Sales, equally with 
• Risk & compliance. This was followed by
• Customer / member engagement, and 
• Operations roles. 

Ms Humphris notes when hiring for these roles, cultural fit was considered the most important criteria by c-suite leaders, followed by proven experience and technical skills. Interestingly, there were no responses for qualifications or remuneration. 

Ms Humphris adds that technology was not solving the recruitment challenge in wealth management. “Job seekers are increasingly reporting being disheartened by the automation of recruitment in our industry. We are hearing an increasing number of complaints from skilled people applying for roles and not getting a response – even when they have all the skills and experience.

“At the other extreme, many of the HR departments in wealth management still base their decisions on gut instinct rather than facts!

“There needs to be a better balance by wealth management firms seeking staff. Algorithms and automation cannot substitute for someone who can identify and match proven performance, cultural fit, skills and personality traits with what wealth managers need.”

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Sally Humphris

Wealth managers and financial services organisations – such as ANZ, IOOF and NAB – that are working their way through the implications of the Royal Commission were told to start thinking differently regarding their leadership structures. 

IOOF, which is seeking a new CEO, revealed just this week that it will require the approval of the prudential regulator before its billion-dollar purchase of ANZ’s OnePath superannuation business can proceed.

Changes to organisational management are being implemented in order to better manage external and internal risks, conflicts of interests, and ensuring client best interests duty is met, notes industry people specialists SUPER Recruiters.  

Sally Humphris, Executive Director at SUPER Recruiters, says: “Organisations, like IOOF and others, may better manage internal and external business risks by appointing co-CEOs, a strategic leadership move businesses such as JP Morgan Chase have adopted. The co CEO structure has enabled business growth as well as ensuring best interests duty and reputation remain intact. 

“It is important to set the right culture from board level down. Boards appointing co-CEOs, one being a former regulator, bringing governance and compliance disciplines, and the other being a strong business leader, could overcome many of the reputational issues being faced by these organisations,” suggests Ms Humphris.

“This approach would provide a better start to help repair issues identified by the Royal Commission and also reputation by providing stakeholders with the peace of mind that an experienced regulatory professional was embedded within such organisations.”

Ms Humphris suggested that while the industry disclaims that past performance is not a guarantee of future performance, it often is when it comes to people. “These organisations need to engage proven performers. HR departments recognise that good people can make a big difference to their performance and culture.”

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Guy McKanna

People are a major competitive advantage. How often have you hired a ‘poor fit’? We all have. They cost time money and more.

Having the best people improves practice performance.

So how is your recruiting? Is it best, or typical standard industry, practice?

Have you ever asked ‘How do the best practices find their people, the best people?’

We’ve identified that the best practices take a different approach, turning around the recruiting processes.

They ask around for referrals as to who the best people are, the best advisers, the best managers, the best EAs and PAs and so on. In short, they do ‘reference checks’ at the very beginning of the process to identify the best potential candidates – those with a proven track record of delivering – and then entice them to join their practice.

This is in contrast to traditional recruiting where you identify a candidate from a raft of resumes (often obtained from an online job board advert) and then undertake simple reference checks at the end.

Unfortunately, many practice managers – and even external recruiters – are tasked with finding people for a role at low cost and quick pace. They turn to technology to achieve that, and often technology alone.

Using technology, such as online job boards, does not reduce risk. Rather it has increased it! Reputation damage is considered the greatest risk to organisations in our industry– and that is generally damage caused by people. Online job boards use key word matching from candidates’ online profiles and resumes. Matching 10 key words for the role needed to be filled with 10 similar words from hundreds of resumes is hardly digital disruption – and while it is the latest industry practice it is certainly not world’s best practice.

These algorithms cannot identify the best-proven performers for a role in an organisation. Nor can they reference check, personality check or check some one’s track record.

Technology in recruiting has tended to result in a focus on those people who are looking to move, for whatever reason – rather than identifying the best performers that you should be enticing to join your practice.

Practice managers need to turn the process around and identify who has the best track record in the first instance!

You wouldn’t recommend a client invest in a fund based on 10 key words. Rather, you benchmark the performance of various investment offerings as to their track record, check that each delivers what it says it does and assess the professionals behind it via a range of research.

Practices need to reverse their hiring process. Benchmark who is the best at the beginning – identify the proven performers and then approach them – not just those online.

Ask colleagues you trust for referrals. After all, you want the best, not just someone who is currently available.

Also, just because someone worked for a good organisation does not mean they are themselves good.

How often have you worked with others who were troublesome, who were focused on themselves, who didn’t understand what was required – and how this impacted your own work?

Employing such people increases the risks within an organisation, and to its reputation, often requiring even greater risk and marketing teams to counter the damage they cause.

Remember to also ensure the candidate has the ‘right’ cultural fit for your practice. This is key. Too often managers only look at qualifications. They are only part of the person you are hiring.

There are great people out there working hard but are under appreciated by their current employers and want to join good practices.

If you identify two great people and can’t decide – hire both! As they will help you grow your business twice as fast!

Technology alone won’t make your organisation the best. You need the best technology coupled with the best people. It’s that simple.

By Guy McKanna, principal of SUPER Recruiters and co-founder and board member of the Australian Transformation and Turnaround Association.

The post How advice practices can recruit better appeared first on AdviserVoice.

Superannuation INDUSTRY ISSUES 2017

The pace and poignancy of change has certainly heightened in the past few months; spurred on by new leadership in the US, as well as increasingly innovative ways organisations, are using technology. If Amazon (soon to hit our shores in a big way) can sell cars online, while Alibaba has become the world’s biggest e-commerce player from a zero base, what might these organisations – and others – do to disrupt our superannuation and investment industry?

How will you address the major challenges and technological changes we all face?

To better determine what lies ahead, we joined together to snapshot our industry and are pleased to present you with the results Superannuation INDUSTRY ISSUES 2017.

Our research identified several notable trends:

• 77% of respondents expect this year will be better for them and their organisation
  compared to last year.
• Organisations are concerned about volatile markets and market returns, digital disruption
  and increasing competition – as well as the affects of Donald Trump.
• Major risks were identified as market volatility, reputation damage and cyber crime.
• Few asset allocators have determined what will likely be the best-performing asset classes
  during the Trump era – though expect it will have something to do with infrastructure.
• 50% of the industry expects to hire more people this year – particularly in sales and
  marketing with modest increases in administration and support staff.
• The top employee challenges are considered to be cultural fit and helping employees keep
  up with the pace of change.

By asking where the industry is heading, drawing a line in the sand and then working together we can better overcome the coming challenges and maximise opportunities for us all – whether as an asset owner, manager or investor.

Read the Report.

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