Your plan consulting business is running flat out. It’s time to add staff, but you’ve seen numerous headlines about the tight labor market and the difficulty finding qualified candidates. But your firm has a good reputation and its compensation and benefits are competitive, so it shouldn’t be too difficult to find experienced candidates—right?
According to Matt Burt, director of professional services at Fi360, Inc., plan consultants typically evaluate capacity, financial impact and workload when they consider adding staff. Fi360’s surveys have found that taking on 25 new plans is one commonly used metric, as is the projection of $250,000 to $275,000 in additional annual revenue. Timing a hiring decision can be more art than science, Burt cautions, but lately, financial indicators have become more influential in advisors’ decisions.
Welcome to the Jungle
Deciding to hire is the easy part, however. Finding qualified applicants, particularly for positions that require experience with plans, is a different story, and Fi360’s surveys indicate that staffing challenges are widespread. “Number one from our survey is finding the right talent,” Burt notes. “That includes skill set, it includes experience level, it includes knowledge, it includes desire to grow professionally, it includes desire to build out the business, it includes finding folks with ERISA experience and experience working in the plan marketplace.”
Assuming an applicant has the requisite skills and experience, there’s still no guarantee of what Burt describes as a cultural fit. For instance, does the applicant share the organization’s vision of client service and staff members’ responsibilities? A final hurdle: the high cost of hiring experienced applicants when the pool of qualified candidates is limited. Available, qualified candidates will require competitive compensation. It can be difficult for advisors to take on that additional expense or potentially give up a degree of business control if the applicant will assume an ownership position. “It’s a very competitive situation where it’s seemingly a shortage of really good talent that can help advisors build their practice overall,” he adds.
Stan Milovancev, executive vice president at CBIZ Retirement Plan Services, a division of CBIZ Inc., expresses similar concerns. His division operates nationally, and he cites several challenges in finding candidates. First, retirement plan consulting is a specialized financial services niche. University finance students tend to focus on corporate finance and investments; their course of study isn’t likely to include qualified plans and ERISA. Genuine expertise is rare among experienced financial services advisors, too. Milovancev estimates that if he walked 10 miles down the road, he’d probably find 100 private client advisors and financial planners but only one legitimate, experienced retirement plan advisor.
Geography poses another obstacle. The larger record-keepers often operate from a small number of centralized locations around the country. Experienced prospective hires tend to be clustered in those areas, and if your business is not nearby, you’ll have to address the relocation issue. Identifying and reaching candidates within those organizations is another obstacle. “You’re talking about people in small subsets in certain pockets,” says Milovancev. “So, how do you find them? Physically, how do you find them? You’d have to have a good recruiter.”
Every business wants to hire successful, top-tier advisors, Milovancev notes, but even if you can find them, can you lure them to your company? “You might have a hard time ripping them away,” he cautions. “Think about how few advisors there really are, and if you found a first-tier advisor, they either may have equity in their own shop or they might have a very, very good program that they built for years and years with a brand and recognition,” he adds.
Overcoming the Obstacles
Milovancev says CBIZ uses several methods to boost its recruiting efforts. Targeted acquisitions of advisory firms can provide access to specialized talent and create a presence in specific parts of the country. Hiring senior experienced staff with transferable skills from other industries and training them is also a possibility.
Hiring inexperienced staff is another option, but that’s also a tight labor market. Younger applicants, for instance, often evaluate companies’ workplace reputation, and they want a clear sense of how an employer envisions their career path. Organizations need human capital development capacities that can help employees develop the tools and skills they’re seeking, but it’s easier for larger firms to develop those capacities.
Younger hires also want more than a job and salary—they want their work to server a larger purpose. Fortunately, the retirement plan industry is well-positioned to meet that goal, Milovancev asserts. “Our job is to help the kind of average American who wants to save and wants to have a better life,” he says. When candidates learn about that objective, they’re more likely to return for a second interview.”