Insights - 15 December, 2022
Financial Services Leaders: Top-9 Warning Signs of Advisor Turnover
High turnover can lead to deep trouble for big companies and can become a real business-killer for small or unprepared firms in highly competitive industries. Losing staff is extremely costly and arduous when it exceeds a firm's capacity to handle it. In fact, it might cost 1.5 to 2X’s an employee's annual compensation to replace a qualified employee, not to mention losses caused by an overall staff productivity downturn.
In 2022 employers should be on the alert even more than before. Due to the recent employment trends, 55% of HireVue respondents reported increased turnover, while every 4th company stated they lost at least 13% of their staff in a single year.
When it comes to employee turnover, prevention is always better than cure. In order to spot the early symptoms of an unsatisfied employee who might be considering leaving, financial services leaders need to be aware of the red flags.
This article will lay out the top-10 warning signs of impending financial advisors employee turnover and advice on addressing them.
Could You Prevent It?
According to a 2020 Teamstage study, up to 77% of employee turnover may be avoided. The first step in preventing financial company workers from checking out is to understand the motivations behind why people think about leaving their positions.
The desire to change jobs often arises due to stress, dissatisfaction with a position and its responsibilities, a work / life imbalance, low wages, bad management, and of course an endless number of external factors. Let's take a deeper look at some popular examples:
In addition, if an employer does not even try to retain a competent, valuable specialist, it gradually destroys the trust in the leadership team and the company's image.
According to a 2020 Work Institute study, the leading preventable reasons for turnover were career-related (lack of growth opportunities, recognition, job security), bad work-life balance (scheduling and flexibility), dissatisfaction with one's job (lack of enjoyment and ownership over one's workload), poor management (productive relationship preferences) and toxic working environment (physical and cultural surroundings).
When To Sound The Alarm
When a financial services leader receives a resignation letter, spotting the reason won't make any difference at that point. The probability of retaining such an employee is extremely low since he has decided long ago or probably has already found a new job. Therefore, the manager needs to determine the state of "internal dismissal" of an advisor (when he physically works in the company, but mentally he is already in a different place) as early as possible.
You should be on the watch for these signs so you can take action before it's too late:
Increased absences or lateness
If a reliable and punctual financial associate suddenly starts arriving late, leaving early, or taking sick days too frequently, it's time for a turnover red flags investigation. On the one hand, employees who start significantly altering their regular work schedule may be juggling job searches and interviews with their present responsibilities. But on the other hand, they may be going through some difficult personal situations affecting their work availability. An attentive manager should initiate a conversation with such a worker to learn the reasons for these changes and then decide if he can find a solution to help the team member better manage their time.
Lack of engagement in company activities
Employee engagement is hard to fake. It can reveal if the worker is really committed to the company, its mission, and goals or whether he's about to walk out that door and never come back. Advisors who avoid taking part in long-term projects, don't contribute during team meetings, or seem uninterested in career growth prospects demonstrate poor engagement and raise a red flag for an upcoming resignation.
When your employee suddenly starts to deliver shoddy work or skip deadlines, it can signify that he is beginning to pack his things. Everybody has rough days occasionally, therefore you should approach this subject delicately to identify the root of the problem. However, any behavioral changes that indicate 'presenteeism' — a phenomenon where employees show up for work but aren't fully present — are hazardous signals.
Did you notice that a financial associate who usually wears casual jeans and a t-shirt has put on a suit, tie, and a polished pair of shoes? It may indicate that he is interviewing in other companies after work or during lunch breaks.
However, the opposite scenario is also possible. When a person is dissatisfied with his present position, he may start dressing worse since he believes "no one cares anyway."
Isolation from colleagues
When sociable and outgoing workers unexpectedly distance themselves from coworkers, this can also be another red flag. One of the most challenging aspects of leaving a workplace is breaking habits and saying goodbye to colleagues and coworkers. Therefore, if you observe some of your staff withdrawing and becoming reticent, they may be ready to quit.
Avoiding direct managers
Top-performers who consistently provide above and beyond for their financial services organization value their working relationships with their boss and are loath to disappoint them or be compelled to tell white lies. Therefore, avoiding the boss is a huge red flag showing that the employee is seeking a new job.
Different reactions to conflicts
As people prepare to leave, they may change their approach to conflict. Those employees, who previously were inclined to back off and temper their ardor, now may not retreat when they find themselves in a conflict at work, as they don't feel it's worth biting their tongue. Instead, they get to experience an emotional release. Ultimately, it results in an employee who was more accommodating earlier, that turns confrontational due to frustration or resentment.
Of course, taking inventory, sorting documents, signing folders, and sorting files on a computer is not something supernatural for an excellent worker. But when regardless of his normal daily performance, the financial advisor allocates lunch or after-work time to clean up all areas of his job and "tie up loose ends" on old projects, that may mean that he’s planning on walking out the door after setting the stage for a future replacement. This process serves two purposes: not to let the company down and to keep his own reputation high. Also, pay attention to taking personal items out of the office one by one – a sure sign of emotional detachment.
Cold, emotionless behavior
Associates who are about to leave may stop using their sense of humor and become colder and aloof in the workplace. Their demeanor becomes more direct and practical rather than friendly and fun. One of the possible reasons is that they worry less about looking responsive, building mutually beneficial relationships within the team, or trying to impress anyone.
How To Avoid Staff Layoffs
LinkedIn recently revealed the following statistic: if the turnover of professionals (specialists) in a company of 10,000 people is reduced by only 1%, then they would save roughly $75 million company-wide. Clearly, avoiding turnover makes absolute sense, and to do so, financial services leaders should follow this advice. In fact, there are only three main pieces of advice that can help you to avoid sudden employee layoffs:
1) Choose the right staff
The first and most important thing for preventing a high turnover rate is a thorough recruitment process. When a person feels like they are in the right place, working under a great manager, solving interesting, challenging tasks, and has a match in skills, goals, and plans according to the employer's demands – all this synchronicity keeps him from switching jobs.
Conduct regular one-to-one meetings, ask questions, and observe human behavior. Suppose an advisor starts taking more frequent days off, their productivity falls, and they act and look different. In that case, you should not wait until he comes with a competitor offer – initiate a meeting and conversation yourself.
It is not always a matter of salary — the greater the specialized skill-set, the more needs an employee will have in addition to competitive pay. The motivators may be the exciting project itself, the goals of the position (are there any challenges and unusual tasks), the team (experienced colleagues and team leaders), and cutting-edge working tools.
Proper management of staff turnover is the main factor that can influence the risk of frequent employee departure. With the introduction of effective actions that contribute to a workers' confidence, value, comfort, and growth, employers will improve their organization's performance and minimize staff turnover.
If you've faced high turnover before and you don't want to go through it again, or you wish to retain your top talent for years, feel free to book a call with us here at Provision People. We can assist you in developing and sustaining a retention-focused culture in your financial services organization, teach the strategy of choosing the right staff and provide you with the real-life motivation tips to keep your team engaged and satisfied for years to come.