Insights - 15 June, 2022
Top 7 Ways Financial Services Leaders Can Increase Their Advisor Retention Rate
Employee retention is a deep concern for any company. Searching and training new professional workers costs time and assets while paused long-term projects and lost productivity don’t come cheap, no matter how stable the economics are.
According to Gallup’s research, the replacement of a single candidate can cost up to two employee’s annual salaries. Considering that approximately 4 million workers quit their employment in April 2021, the potential costs to business is enormous.
In this blog you’ll find out the most common reasons people leave their jobs and best ways financial services leaders can prevent it.
The Importance Of Employee Retention
Employee retention is the skill of gaining the dedication and loyalty of your workers over the years. Your employee-employer interactions are the cornerstone of staff retention. They require continuous maintenance and attention from the moment you meet your employee on the first day at your company.
As the U.S. Bureau of Labor Statistics reported in 2022, average employee tenure in the financial activities sector is 4.5 years. And nearly 40 % of those who resign do so within the first year, according to a Work Institute report. Although you can always find candidates to fill the gaps just as current employees can find new vacancies, it is in your best interest to invest in retaining, engaging, and recognizing the ones you already have.
Nothing affects your success more than the competence and experience of your team. In case your employee turnover rate is high, you will continually rebuild your team rather than maximize its potential. And as a result, the remaining staff will face burnout from picking up the slack left by previous employees.
Reasons Employees Leave
In order to learn from the mistakes and avoid factors that may cause a high turnover rate, financial services employers should pay attention to the reasons the workers leave their jobs. U.S. Bureau of Labor Statistics collected the full list in 2021, and here are the most popular:
After reviewing the facts, it is easy to infer that income is not the primary or only reason for leaving a position. There are a wide variety of causes, and the best method to reduce premature turnover is to learn what your employees desire.
Study Your Employees' Needs
There are a few most typical approaches to comprehend the wishes of your financial services staff: climate surveys, anonymous questionnaires, etc. But instead of using them, managers frequently prefer to compile their own subjective assessment of employees’ expectations.
Sebastian Reiche, Ph.D., professor of people management at Barcelona's IESE Business School, proposed his method to study workers’ desires: "If you want to find out exactly what talent at your organization wants or how happy they are with a certain way of working, start with one team working differently and use it as a pilot case."
Therefore, managers should refrain from making assumptions about how their financial associates prefer to work and allow them to demonstrate what works best for them instead.
So how can you satisfy your workers' wants and needs?
1) Invest in training and development
Personnel is any organization's lifeblood. Investing in their professional growth is essential for creating a successful and productive workplace. The provision of training and development opportunities assists employees in enhancing their abilities, learning new techniques, and remaining current within their field. This is advantageous for both the individual employee and the financial services company as a whole. Investments in employee development lead to less employee turnover and improved innovation.
Be sure to emphasize the organization's dedication to employee development while recruiting new advisors. It will definitely attract top employees seeking a long-term career path with your organization.
2) Create a positive work environment
Creating a positive work environment is another key factor in retention rates. Workers who feel valued, supported, and appreciated are more likely to stay with a financial services company. A positive work environment gives a feeling of safety and helps reveal the potential.
Make sure your workplace is one that people enjoy coming to every day. This can include things like having an open-door policy, maintaining a good work/life balance, setting adequate break times, providing team-building activities, and keeping the office clean and pleasant to spend 8 hours a day in.
3) Offer benefits and perks
Make sure salary, benefits, and perks are competitive with other businesses in the financial industry. This demonstrates your genuine concern for your employees' well-being and might provide them with a sense of security. For instance, a strong health insurance plan gives personnel the confidence that they will have access to adequate medical care if they get health issues while working in your company.
Additional advantages may include cozy lounges, good coffee, access to corporate promotions, or even fitness discounts. If you want to include benefits that are directly tied to employee desires, solicit employee feedback on what they are interested in receiving.
4) Promote from within
If employees cannot see a future in your company, they will search elsewhere for a better opportunity. To enhance long-term employee retention, design a career development plan with each employee.
This not only demonstrates to employees that there are prospects for growth within the company, but it also assists in retaining the best and brightest staff. Developing a sense of loyalty among workers is another benefit that can come from promoting from within a financial services organization.
Discuss with your team the opportunities for advancement they can get in one, three, or five years. Ask if they see themselves working their way up to the managerial level in time. Be open and honest with your advisors about the steps they need to take to accomplish it. Propose special training, learning under the supervision of a manager. Make a detailed plan for them to follow that specifies each action they must take in order to reach their destination.
5) Add permanent flexibility
In the modern world, flexibility is extremely important to employees and job seekers across America, regardless of industry. More than 50% of workers would consider leaving their jobs if they were not provided with flexibility about the hours they work and the locations in which they perform their work, according to the EY Reimagined Employee Survey 2021 data.
Financial services companies that provide employees with flexible schedules, telecommuting, and unrestricted PTO help employees maintain a healthy work-life balance. It has also been demonstrated that flexibility improves mental health, reduces workplace stress, and increases productivity.
6) Communicate regularly
People are more likely to feel prepared for their tasks and to ask questions in case they are uncertain when they understand what is expected of them. Giving precise, detailed tasks with an option of discussion would save time to complete and show the firm’s support to new workers. Maintaining open lines of communication between management and staff will aid in preventing misunderstandings and ensuring that everyone is on the same page.
Invite staff feedback during projects and meetings. Encourage them to visit your office as necessary. And provide an online form for them to submit their feedback at their convenience. This can go a long way in reducing turnover.
7) Working with a purpose
The need to work with a purpose is the most underappreciated ambition of modern employees by far. Many workers are ready to sacrifice the best coffee or office game areas in exchange for labor that is meaningful. Unfortunately, in today's profit-driven society, a feeling of purpose is neglected by many businesses. Many employees believe they are not contributing to the greater good of society through their employment.
Without a sense of purpose, it is challenging for financial advisors to identify with their work and the firm. Purposeful work increases employee morale, motivation, and overall job satisfaction. The Mercer Talent Trend Study reports that thriving people are three times more inclined to work for an organization with a strong sense of purpose. However, only 13% of organizations surveyed offer an employee value proposition (EVP) that is distinguished by a mission-driven purpose.
Although retaining associates begins with hiring the right individual, it is crucial to make workers feel safe, comfortable, and capable of achieving their business goals. By creating a positive work environment, providing training and development opportunities, and fostering a culture of communication and collaboration, you can give your employees the tools they need to succeed and stay with your company for the long haul.
If you're looking to increase your employees retention, but don't know where to start, feel free to book a call with myself or one of my team members at Provision People. We can walk you through some clear and actionable steps on how you can fill in the gaps on your financial team through upscaling your workforce, supplemented by finding and recruiting top talent for those roles you can't upscale for.