By Kim Ross
Early in your practice you had to operate lean and mean, so you were a jack-of-all-trades. You juggled data entry, bills and tech support—all while trying to prospect and service clients. Now that your business is established, however, it may be time to let someone else take over the support functions so you can concentrate on generating revenue.
The right hiring decision at the right time “can be the wind in your practice’s sail that propels it to the next level,” according to Kirk J. Hulett, senior vice president of strategy and practice management at Securities America Advisors Inc., one of the nation’s largest independent broker-dealers. In his new book, Hiring to Grow: A Practical Workbook, How to Attract and Select Quality Talent (www.securitiesamerica.com), Hulett provides a comprehensive, systematic approach that advisors can use to decide how and when to bring aboard new employees.
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Is there a strong strategic and economic case for hiring? |
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Step 1: To begin, Hulett writes, you need to carefully analyze your needs. Is there a strong strategic and economic case for hiring? If the benefits justify the cost, smart advisors will take the leap. Because the purpose of adding staff is to enable you to achieve your business goals, take a few minutes to outline your current business situation and your one-year and five-year objectives. Include financial targets tied to metrics like gross revenue or profit per client. With your objectives fresh in your mind, you can begin analyzing your needs.
Hulett suggests you start by identifying tasks you could delegate to free yourself up to prospect and advise clients. Estimate how many hours it would take to complete those tasks. Then project your business six to eight months into the future. Will that number of hours change? If so, are those changes cyclical or seasonal? Be honest with yourself, he writes, about what you’ll really do with the extra free time.
Step 2: The next phase, says Hulett, is to assess how much time a new employee would actually save you. It’s important to realize that 15 hours of staff time do not equal 15 hours saved. That’s because every job has some inherent downtime. To make the appropriate calculation, you should:
- Ask yourself how many productive hours you can expect from the employee.
- Factor in the length of the initial learning curve as well as time for continuing education.
- Assess how much time you will spend training and developing the employee.
- Include regular one-to-one meetings and performance reviews in the equation.
Step 3: The third phase is to calculate out-of-pocket costs. Some factors to consider are:
- How much will you spend on advertising and/or a headhunter?
- What’s the price tag for salary, benefits and taxes?
- How much will you shell out for training and education?
- What is the cost of the time you will spend on training and supervision?
Other potential cash outlays include money for a phone line, a computer and its peripherals, office furniture and other equipment a new employee needs.
Worksheets
The first chapter of the book has easy-to-use worksheets to help you quantify and weigh these costs and benefits. You can download this chapter at no cost at www.securitiesamerica.com/hiring.html. And as you do this needs analysis, keep in mind Hulett’s advice: “The only way you’ll achieve adequate ROI is if the additional payroll expense can be leveraged to create additional value in your practice.”
Kim Ross is a contributor to Advisor Today.
October 2007
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