Business development and investment professionals are the face of an investment firm, but what has been traditionally called the ‘back office’ is the heartbeat of the business – much quieter and much less visible to the outside world, perhaps, but equally important in making a firm function.
Attracting and retaining the best people for these roles is competitive and in an age of downward pressure on fees, throwing money at the problem is not the best answer. When we interview candidates for senior roles in these areas of the business, three factors regularly rank above compensation as reasons for looking elsewhere.
Appetite for change
Many of these roles contain plenty of routine work – most CFOs admit that overseeing accounts is not the most fulfilling part of their role – but what really makes a position exciting is the opportunity to drive change. The best talent will have the initiative and good sense to identify these projects themselves, so what a CEO must do is create an environment where people are encouraged to go above and beyond. While there cannot always be an M&A integration or a systems transformation project to manage, business as usual is simply not of interest for the most dynamic people in these roles. One COO that Bohill Partners recently placed to an asset manager was open to moving because their previous firm was “perfectly happy to keep on doing what they were doing” despite seeing plenty of opportunities for further growth.
People in these roles who are looking to move on, even those right at the top of the organization, are often frustrated that so-called ‘front office’ professionals do not appreciate the importance of their work. “We’re just seen as a cost center,” is a common complaint. In some organizations, this even extends to the office space – sitting the investment team in a separate, much more lavish floor or building is not the best way to show the rest of the firm they matter. Showing how they contribute to the overall success of the business, both to them and to their colleagues, goes a long way in making them feel valued. Having a two-tier organization does not. Senior leadership needs to model this behavior, by publicly congratulating them on big achievements and explicitly linking them to the overall success of the business.
More are seeking input from previously overlooked parts of the business to make key decisions, so if you want HR to contribute more than just administering payroll and firing people, and legal to work proactively alongside you rather than being a blocker, then include them in the big conversations. It is a virtuous circle: letting them understand how you, the CEO, and the investment team are thinking gives them a better understanding of what you are trying to achieve. This allows them to contribute more effectively, which encourages the rest of the business to include them more frequently, and in turn allows them to learn more, and so on. This can be replicated right down the organization. The key change in mindset that needs to happen is that the investment team are requesting the expertise of whichever team it happens to be, not simply barking out orders.
Ultimately, this all boils down to creating the right corporate culture – as a leader, this is a key part of your job. Encourage the right kind of positive, open and appreciative atmosphere and you will be much better placed to attract and retain the best talent throughout the organization, without spending any more of those hard-earned fees.
The cost of replacing a highly skilled employee can be up to three times their annual compensation, including recruitment fees, onboarding and training time, and the gap between them leaving and having a new person in place. So spending a little more time ensuring they are given the right environment is a good investment.