- Understanding what drives Millennials (Gen Y) will help the financial planning profession attract great talent and remain viable
- Attracting and retaining Millennials is about seven key drivers - aligning values, providing genuinely flexible working arrangements, giving them a sense of purpose, offering access to the leaders of the business, taking a structured approach to performance appraisals, offering a career plan and paying a reasonable salary.
- To successfully recruit and keep Millennials, advice businesses need to be continually focused on recruitment, have a structured induction program and a structured development plan and focus on the seven key drivers.
The market for new financial planners is highly competitive with the number of graduates coming out of universities not keeping pace with the rate of attrition and growth in demand in the industry, warns Alisdair Barr, founder and managing director of Grad Mentor.
In a recent Netwealth webinar titled ‘Growing your firm's future from the ground up’ he says, “Graduates are not rushing into the planning industry because they are not aware of the opportunities it offers,and, as a profession, I don’t think we promote ourselves as a great place to work or as a career enough.”
For advisory firms, this means attracting and retaining millennials – anyone born from 1980 to the late 1990s – is more critical than ever.
“Most firms are pretty good at engaging millennials in their businesses initially,” says Barr, noting the difficulties lie in retaining them. The challenges, he says, usually kick in at a point between 18 months and two and a half years later. After some development and training, they start becoming more productive and the business starts to see real value in their contribution. But that’s also when recruiters get on the phone, other firms begin chasing them and they are at the greatest risk of leaving.
That said, recent research by Grad Mentor identified seven drivers that could lead to better long-term outcomes when it comes to attracting and retaining millennials. They are:
#1: Aligned values:
The business and millennials must share the same values.
Employers usually want to see if millennials pay attention to detail and take responsibility for their own careers and work. Also important is their work ethic. At the same, millennials are looking for businesses to display ethical behaviour.
“With the advent of social media, everything's open,” Barr says. “It’s all about shared values and connecting with purpose. You see businesses that have charity days or do pro bono work or give a day off a month so that staff can go and work at the local charity. Or, you could have a leader in the business that's involved in community work. Millennials really connect to that and it’s really key to engaging them.”
#2: Flexible work:
Traditionally, this has been about working from home, but these days it may be more than that. “Sometimes, it is, but not always,” says Barr. “When we dug deeper in our research, we found a lot of it is around travel, giving time off for education, being flexible around study time and having an informal culture. It’s also about being flexible around working hours and having flexible workspaces.”
#3: The bigger picture:
Millennials become more engaged when they understand the meaning and purpose of the work they're doing and how their input affects the business, its clients and the community. One practical way this can unfold is including them in your business planning days.
Millennials also value having exposure to the leaders in the business, an open-door policy and knowing that their opinions count. Here, smaller companies may have an advantage as it’s far easier for them to provide exposure to top executives than it is for the bigger companies.
#5 Performance discussions:
Having a structure and format in the feedback loop and regular conversations around progression and what further development is needed is very important to millennials.
“In our research, we found cases where people really didn't know where they were on their development journey,” says Barr. “If you turn up for your six-monthly performance review and are told that you're not meeting expectations, it can be pretty demoralising, especially if you didn't see it coming.”
#6: Have a career plan:
This plan needs to be transparent and should include goals, what each party will deliver and clear timelines. Plus, it should cover future education plans and any complexity that may be added to the role so that the millennial can keep learning and growing.
#7 Reasonable pay:
While important, remuneration is not the most important thing. Barr’s research shows that pay needs to "fair and reasonable" and should be tied in with education and continuous learning.
Millennials will become disengaged or frustrated if they don't know what the salary expectations are as they progress. “We know that you can make a good living in this profession and we need to make it really clear what the earning potential is for the role someone is going to go into," he says.
Four key areas of focus when it comes to recruiting, engaging and retaining staff
Knowing that recruiters may start calling just as a millennial is starting to contribute to your business, Barr lists the following as key areas to focus on:
Always be in hiring mode. “If someone resigns, they’ll give you four weeks’ notice, but the process of resourcing takes three months, so the timeframes don't match up,” warns Barr.
He also recommends having robust process already in place for interviewing, reviewing, reference checking and so forth.
This should take place over a three to six-month timeframe and can align with a probation period. It should include a systematic development plan and lots of conversations. Progress should be continually measured. Peer reviews are also useful.
“We've seen everything from 10-week intensive induction programs, to people being thrown in the deep end. There's no right or wrong way,” says Barr. “But the closer you get to a person and the more focus you give the induction, the better.”
Development requires a 12 to 18 month timeframe. In addition to having a plan, goals need to be set and progress needs to be monitored and discussed regularly.
Barr says focusing on the seven drivers throughout the employment journey is critical to retention. “If you start having those conversations when someone is being poached or is resigning, you've already lost them,” he says. “You could throw more money at them and may keep them another six months, but then the whole conversation starts again. You haven't bought loyalty, you've bought time.”
The future of financial planning lies in the industry’s ability to attract and retain great Millennial talent – and if it can do that, then the future is in good hands.