THE DEATH OF THE HEAD HUNTER – NEW WAYS OF FINDING AND RETAINING TALENT

Wealth Management & Private Banking

Wealth Management & Private Banking

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Expert: Charo Garzon & Lloyd Wigglesworth at Paradox

Moderator: Mark Miles - Scorpio Partnership

Key message 

Is the head-hunter practice of poaching in the industry on the decline?  Although the advantages of training relationship managers from scratch are obvious – particularly when it comes to integrating them into the company culture and moulding advisors’ skills – are head-hunters more aware of factors that may not be clearly evident to internal recruitment teams? And more importantly, once firms do hire the right talent, how can they retain their best relationship managers?

Headlines 

  • Best practice in recruiting, training and retaining talent is to create a healthy culture for employees.
  • Recruitment is based on the mutual understanding that it is a good fit for both parties.
  • Internal recruitment teams facilitate conveying the firm’s culture and message. Head-hunters are perceived to be lacking in this aspect.

Key themes 

What do firms look for when hiring?

With a wave of applications from strong candidates pouring into all types of job openings across various industries, the recruitment criteria and process has inevitably had to change. Increasingly, it is becoming apparent that although skills are absolutely essential to progress, what differentiates the successful from the non-successful candidates is their alignment to companies’ values. To succeed, employees need to translate their skills into motivation driven by purpose and vision. 

In the context of wealth management, roundtable delegates agreed that ideal candidates need to demonstrate a thirst for sales but simultaneously show an awareness of consistently maintaining clients’ best interests at heart.

This led to an interesting discussion – could this be a paradox? Is this inevitably an inherent catch-22 in the financial services industry? If driven by financial success, how can clients’ interests always be the primary focus? It was agreed that this requires a very delicate balance, involving specific technical and fine-tuned client-management skills. One delegate explained that in his eyes 

“The best type of employee is someone who can be a synchronised swimmer. Because then you know he can keep up with the team, but put in the effort alone.”

The roundtable was then asked if any of their firms have used their own high-performers as ‘blue-prints’ of sorts, from which they could profile and use for comparison purposes during recruitment processes. Delegates explained that hiring new employees cannot be as scientific at that, because “different firms are different beasts.”

When it comes to hiring more junior people, firms represented at the roundtable explained they give them a mentor, often a senior client advisor, to guide them. As a result, the senior person goes back into growth mode themselves, identifying gaps in their own development process. If chemistry perpetuates between the pair, this may even lead to new business. All in all, mentoring as a practice was held in high esteem for all participants.

Delegates also acknowledged that remuneration plays a big role in the recruitment process, and most definitely affects the types of applications received:

“Moving firms is a massive bother for people, so often times they only decide to move on either because they are not being paid enough or because they have changed and their firm is not changing with them…”

Another challenge facing firms when hiring relates to finding loyal employees. The main risk linked to this is the recruitment of senior personnel, because if they leave, they can take contacts gained at the firm with them. Huge recruitment mistakes like these can lead to huge losses. This is also why many delegates underlined that the percentage risk of hiring juniors and training them is much lower.

A delegate shared an example about Deep Mind’s recruitment strategy (a tech company acquired by Google), where they specifically outlined their culture to be academic in feel. They recruited based on the opposite of what their competition was doing (the commonly eccentric environment advertised by other technology companies). In that way they implemented an immediate filtering process to ensure only the most worthwhile applicants sent through their CVs.

Do head-hunters facilitate the process?

Although a few of the roundtable participants explained that head-hunters are trained in researching competitors, spotting the high fliers most suited to specific organisations, as well as simultaneously ticking boxes from the FCA’s perspective, the disadvantages of head-hunters appeared to outweigh these benefits. The main issue raised was head-hunters’ inability to fully understand and sell firms based on their culture. Due to the fact that culture between firms is so drastically different, delegates felt strongly that culture should be amplified and used as a core differentiator.

With regards to focusing on diversity, delegates did acknowledge that head-hunters may be more successful at bringing in a wide pool of talent, whereas internal referrals may not be able to reach beyond close circles.

Ultimately, the roundtable agreed that although head-hunters are no longer very useful, there are always exceptions and it is the ones who truly understand the specificities of different firms’ business development strategies that may be able to survive this period of turmoil in the recruitment industry.

Delegates were left with a question – have we as an industry truly given head-hunters strong enough briefs to successfully do their jobs? Should we be giving more guidance on the softer criteria and personality traits we are after?

Is using internal recruitment teams more effective?

The overarching sentiment when discussing internal recruitment was that it is generally much more effective, especially when it comes to hiring junior positions.  Internal HR teams were claimed to have both the headhunting skills and the knowledge of the firm’s messaging and culture.

Delegates representing smaller firms did however point out their concerns with using head-hunters due to the huge amounts of competition for talent from larger firms. In general, the delegate explained, applicants going through head-hunters tend to prefer the image and reputation of larger, well-established firms. Recruitment through their own HR teams works better because they then can know those applicants were specifically looking for a smaller structure and culture. 

Some words of caution were shared by those members of the roundtable having made bad hiring decisions:

  1. Steer clear of too many internal referrals, as these can often times be biased.
  2. When you are looking for someone, you often see what you need – sense check potential hires with junior people on the team.
  3. Read between the lines in reference letters – you can often pick up on any hesitance from previous employers.
  4. Cast the recruitment net widely – look outside the industry if need be.
  5. Be wary of ‘sales people’ who are simply good at interviews; conduct several interview stages (always face to face if possible) and test potential hires on several different aspects.
  6. Ensure that the match is right for both the firm and the potential hire – if it is not, it can become pointless and expensive for the firm and not fair on the potential hire’s career.
  7. Internally recruiting works well because people often know the career path they want within the company

Conclusions 

Recruitment is a malleable process that should be adapted to both the firm and the job needing to be filled. Firms exploring psychometric testing stages in their recruitment processes have often led to several success stories (i.e. Standard Life, Coutts, BMW).

Ultimately the most important thing to understand when hiring is whether applicants are hard-wired to succeed, to innovate, and will ultimately be a good fit for the firm. Whether internal HR teams, or this type of psychometric testing is replacing head-hunters all together, it is not quite certain.

However what is clear is that the best way forward when it comes to recruitment is to initiate an open, transparent, and mutually beneficial conversation between two parties who fully understand and appreciate the firm’s culture, messaging and requirements. 


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