The job of a top producer is tough. First you have to manage clients. Next you have to manage investments and to top it off, you have to manage staff. Of the three, the biggest land mine to growth is managing staff.
Advisors aren't trained to manage personnel. If you are running a solo shop, it's not a priority at first. Eventually you have to hire people once you rise from the rookie stage. Often you are limited in your staffing choices by your broker-dealer. Typically, your production level determines the number of staff members you're assigned. If you want a larger crew, some firms will let you hire them if you pay out of pocket.
Clients don't care about staffing issues. They want top-drawer service and they want it yesterday.
A high-performance advisor needs to surround himself or herself with a high-performance team to provide great service. I'll suggest ways to maximize the productivity of your staff by increasing their level of engagement. You do this by hiring for strengths, compensating for performance, and providing feedback and recognition to double productivity.
Service Equals Engagement
In a 30-year study of industry-leading companies, Gallup Inc. found that great client service depends on having highly-engaged employees. Engaged employees that provide great service beget emotionally satisfied clients. Another Gallup study of bank customers found that emotionally satisfied customers increased their spending 67% over 12 months, compared with 8% or less by other customers.
Every contact a client has with you or your staff can either add to or take away emotional satisfaction. Wouldn't you hate to see all the great service you provided be undermined by your staff?
Disengaged employees have mentally checked out of their jobs. Such employees can treat you, fellow employees, and even clients with contempt, or bad mouth you behind your back. Gallup's research has shown that if you focus on an employee's strengths you can reduce the number of actively disengaged employees to only one out of 100. Think about that for a moment. Who would you want to work for-someone who focuses on your strengths, or someone who focuses on your weaknesses?
Hire for Strengths
The first step in increasing employee engagement is to hire for strengths. Break your staff into two broad categoriesthose that need people skills (like administrative personnel and associate advisors) and those that need quantitative skills (like paraplanners, traders, or research associates).
I find the strengths of discipline, relationship building, and communication fantastic for administrative personnel, and strengths like input, deliberation, and intellect marvelous for paraplanners and traders. Before you hire someone, get them the book, Strengths Based Leadership: Great Leaders, Teams, and Why People Follow by Tom Rath and Barry Conchie (Gallup Press, 2009). Have the prospective employee take the online assessment. If the potential hire doesn't have the right strengths for the job, you shouldn't hire them.
In my graduate studies and in my years of coaching, I have learned that people don't change and you can't change someoneeither before or after you've hired them. When you hire for strengths you have to manage them for strengths and accept the tradeoffs. When you have the right person in the right role, you want to identify their job tasks that are most important to the practice and set up an incentive program.
Base salaries often are determined and paid by your broker-dealer. A great resource if you need to research base salaries is the web site Salary.com. The problem with individual incentives is that staff might not feel they're part of a team player since they're not paid to be. The problem with group incentives is that high performers resent low performers getting the same bonus. Get around these issues by incorporating both types of incentives.
Rewards Are Critical
Face facts: 80% of an employee's results come from 20% of their tasks. Simple Pareto Principle math, right? You need to identify those top two or three tasks in the 20% and set up a monthly bonus program around them. If one of those tasks is appointment scheduling, you can pay a bonus based on the actual number of appointments you had in the month.
As for a group bonus you need to set a bar for the normal growth in your practice. If everyone shows up and does the job, you can expect to grow a certain percent, typically between 10% and 20%. A group bonus kicks in once you surpass that growth. If the bar is 10% and you grow a percentage more, everyone gets an additional 1% of their base salary as a bonus. If you grow 20%, it would be an additional 10% of their base. The nice thing about this model is that you pay bonuses from a larger piea win/win scenario. I recommend group bonuses be paid quarterly, based on quarter-to-quarter performance (Q2 2012 is the bar for Q2 2013 group bonuses, etc.).
Realize, though, that eventually more money doesn't equate to greater engagement or better performance. Have you noticed when a professional athlete signs a big contract, nothing really changes? To maximize employee engagement, we need to look for simple and inexpensive ways to continue to improve engagement.
Care and Feeding
Paying someone money will get that person to apply effort, but that effort needs to be focused on the right task. You focus that effort by providing feedback. Feedback can be provided in a negative or positive context. If someone is late for work, you can remind him what time he or she need to arrive. No matter how much you remind that person, he or she can't start the day again. Sometimes the best way to provide feedback is simply by focusing on the future: "The next time you leave for work, you may want to try leaving a little earlier to allow for traffic conditions or bad weather."
Social recognition conveys both respect and approval of that effort. Nearly every advisor I've talked with agreed that staff likes recognition, but the advisors lacked a turnkey system for providing it. Sometimes people like public recognition, sometimes private. Find out which type to provide by asking which way is best. It could be recognizing a job well done in front of everyone at a staff meeting or a simple e-mail praising a performance. Most of all, providing recognition should be fun.
I recommend putting reminders in your calendar to provide feedback and recognition to staff at a minimum of once every seven to 10 days. The combination of money, feedback, and recognition far surpasses what you can do to improve employee engagement than using any of these three individually.
Always remember that you are in a service business. To provide outstanding service to your clients, it's critical to have a staff that's engaged.
Todd Colbeck is principal and founder of the Colbeck Coaching Group,
a subsidiary of General Business Center, Inc. You can reach him at this email address.