There’s a striking culture shift happening in the workplace as employees’ expectations—of their job experience and of their leaders—undergo a generational shift. And with the Great Resignation continuing, advisory firms that don’t adapt will struggle with employee motivation and retention, and ultimately with sustaining meaningful growth.
The cultural shift was evident in the recently completed Herbers & Company 2022 Leadership Study, which surveyed 750 people between the ages of 22 and 65. Broadly, the survey results underscore the scale of the Great Resignation, a period since early 2021 in which tens of millions of employees have voluntarily left their jobs. Of our respondents, 34% of men and 30% of women reported that they’d left a full-time job in the past year to start a new one. The job changers, each of which had at least a four-year college degree and minimum household income of $50,000, were overwhelmingly satisfied with their decision: 84% of respondents would make the same choice again, while just 8% would not; 9% were unsure.
Money was far from the sole motivator behind these job changes. Seeking new leadership was the most important factor to these job changers, with 69% saying they left their old job due to disliking it. Asked about leadership qualities that appealed to them as job hunters, empathy and understanding headed the list, citing it as the most important factor employees wanted. Behind leadership by a long shot, respondents (38%) cited burnout as the second biggest factor.
The data in the Herbers & Company 2022 Leadership Study reflect the fact that educated workers increasingly value a workplace culture that sees them as multidimensional human beings rather than just assets or human capital. They don’t want cultures that grind them down but rather empower them to grow and achieve something special as a team.
Unfortunately, much of the financial advisor industry is built on a model that’s rapidly becoming outdated, in which financial incentives and disincentives are relied on to motivate employees. That won’t cut it as the broader culture becomes more empathetic, and as job market dynamics have handed employees unprecedented power to vote with their feet. How can advisor-firm leaders begin to transform their organizational cultures? Here are some key ideas to consider.
Facilitate More Communication
Culture and employee training are intertwined, and both should be rooted in ample and fulsome communication. Firms that want to modernize their culture should start by fostering much more open and effective interpersonal communication.
“Follow instructions and work hard” isn’t an effective expectation for leaders who want the kind of cohesive and motivated team that can sustainably grow a firm. Slowing down and allowing the time and space for open communication is critical.
As I’ve written in the past, increasing communication between advisors reveals the specific areas where knowledge gaps lie and where training should focus. This process, which I call sharing to be known, generally requires three or four months to play out. In sharing to be known, advisors exchange questions, ideas and insights on various aspects of their job.
Organizations that constantly run at full capacity don’t have the time to acknowledge internal conflicts, much less address and resolve them. This boosts stress and bogs down effective cooperation. The antidote: taking the time to have conversations that address and resolve the root causes of stress.
Rethink Organizational Structure
Many advisory firms have centralized structures: All decisions run down a hierarchical chain of command, with those lower in the chain expected to follow orders. And while today’s employees understand that they must achieve clear goals, they also value independent thought and creative problem solving. That requires a decentralized organizational structure, one that is flexible and open to change and innovation.
Having the autonomy to creatively solve problems, rather than being a drone executing orders, leads to motivation and loyalty. But implementing a decentralized structure can be particularly scary for business leaders who have achieved a certain level of success by using what is essentially a dictatorial style. The problem is that such firms inevitably find their growth plateauing. To sustain growth, it’s imperative that leaders trust their people.
Culture and Personal Passions
One underappreciated but increasingly important way to create a culture that’s attractive to today’s employees is to demonstrate care about their personal passions. In the past, we’ve seen that organizations care about how employees fit in, but that care is now extending to nonwork pursuits. In designing cultures, advisor firms should think about how to support employees’ ability to pursue their passions outside of work. Harvard Business Review recently noted that businesses that get this right “may not only draw in talented employees, but can help them maintain their productivity and well-being over the long term.”
Providing this support can mean:
- Working with employees to create flexibility: Pursuing passions requires time; firms can allow employees more power to set their work schedule to both accommodate their professional responsibilities and their personal passions.
- Normalizing flexible schedules: Employees usually feel peer pressure to work a conventional full day—they fear judgment if they show up late or leave early. Firm leaders can publicize flexible-scheduling policies and also encourage others on their team to structure planned time off to pursue outside interests.
Enjoying life is particularly important to younger people. In a recent survey by Randstad NV, more than half of millennial and Gen-Z respondents said they would quit a job that kept them from enjoying life. Just over a third of baby boomers polled agreed. Supporting employees’ passions can be an act of enlightened self-interest, because outside pursuits foster a sense of empowerment, positivity and engagement that spills over to their work.
Caring about what inspires your people pertains to their work experience as well as their nonwork experience. The things an employee is excited about at work might not always align with their strengths—and that’s OK. Most employees want to be challenged by projects outside their comfort zone and should be encouraged to do so. The trick is to strike a balance between what they’re good at and what they’re excited to do.
The world has changed a lot in a short time, with the pandemic being a big catalyst for that change. Employees want to work for leaders who care about their professional and personal well-being. Interestingly, “care” is the meaning of the Latin word cultus, from which we derive the word culture. That’s a useful fact for advisor firm leaders to keep in mind as they seek to build sustainable, growing businesses post pandemic.