Is it better to recruit or retain?

Moderated by: Kanupriya Vashisht

Participants

Jim Morrison, VP and Regional Director, RBC Dominion Securities

Tina Tehranchian, , MA, CFP, CLU, CHFC, Branch Manager, Financial Advisor, Assante Capital Management Ltd.

Tina Tehranchian: A lot of it depends on the position you’re hiring for. Generally, if there’s a way to train an existing employee, it acts as a retention tool and creates excitement around the job.

When retraining existing staff, you have to, however, make sure they are capable of fulfilling the role or interested in taking up the position you have in mind. For example, I have an administrative assistant who in the past has expressed interest in getting trained in insurance sales. I’ve encouraged her, plan to pay the fees if she passes the course, and will accommodate her getting into the insurance position. Down the line, I might even transition the smaller files to her.

On the other hand, a few years ago, we needed a marketing assistant — a role none of our existing staff seemed to have the capability to excel at — and we had to recruit fresh talent.

Jim Morrison: Both processes are very important to our business. While recruiting fresh talent is necessary to retain our staffing levels and grow our business, our number one priority has been retention of existing employees. Our branch management team is generally promoted from within; it seldom tends to be fresh hires. However, we have an aging sales force, and because it’s so difficult to get started in the business, recruiting hiring and training remain a high propriety in our business.

The cost of a turnover

Morrison: It costs us approximately $100,000 to hire and train an employee before they start to pay us back. So that’s how much we stand to lose if the employee leaves.

The industry as a whole has a turnover 50% rate for new hires — those who start in the business but won’t be there in three years.

Tehranchian:The smaller the operation, the bigger the turnover costs. The cost of losing a fresh hire may not be tangible — you don’t see them in dollars and cents right away — but the time you spend training new recruits, and the sheer lack of productivity in the first few months of hiring can add up to thousands of dollars.

Picking between equally qualified candidates

Tehranchian:I usually shortlist the candidates, and once the list is narrowed down to two or three similarly qualified candidates, we involve the team in the final interview. Since we’re a tight-knit team harmony is really important to us.

Another criterion that helps me make the final decision is how much the person really wants and needs the job. If two candidates are absolutely equal in experience, attitude and skill set it’s about who has more hunger for the job. I might pick a new graduate who really needs the experience over somebody who has been around for a while and doesn’t really need the job. Or maybe somebody with a big family to support, or a new immigrant who’s having trouble translating experience from a previous job and really needs to get their foot in the door job.

Morrison: If we find two equally qualified candidates, we’d hire them both. We’re looking to grow our business and don’t have a cap on how many we hire. If good candidates come along we find a place for them. Recruiting is a difficult exercise.

Hiring criteria

Tehranchian:Again, depending on the type of job, experience is important but it isn’t everything for me. I’m more interested in finding the person with the right attitude and skills. I have no problem training that person to get them ready for the job. The interview process is very important. I always ask for a cover letter and that tells me a lot about the candidate. A cover letter fully of grammatical mistakes, or a resume without a cover letter also conveys a message that the candidate isn’t as serious as he or she should be about pursuing this position.

Morrison: Aside from a rigorous interview process and reference checks, for new IAs we require that they have the Canadian Securities Course even before applying. We look for people who have a natural market within the community they wish to work in. We look at their family history and their involvement in the community, even their cultural connection to that market. We’re very conscious of the various diversity issues that define each market. And as our business is evolving from a strictly investment management perspective to a wealth management perspective, we’re also attracting more women advisors, who are a big focus of our firm.

For new advisors, we’ve been hiring pretty close to a 100 a year. Industry stats for women recruits are 16% a year. RBC has made a concerted effort to emphasize the need for more women in our business. Sometime during the lifetime of a client or family, 90% of the time the woman ends up being the sole holder of the wealth in the family. This is a great business for women; it hasn’t been promoted well to women. We now have a women’s advisory board, hold women’s symposiums, and try to make them aware what a great career this is for them.

Finding prospects

Morrison: A lot of them, in the last few years especially, have come from similar industries, not directly full service but financial planning arms of the banks, a whole bunch of related financial planning industries. Many are referred to us by our own IAs, or even clients, and centers of influence in the community.

Outside of finance industry, we’ve had the most success hiring people who have an entrepreneurial bent, someone who runs a small business, with sales experience. Though sales experience with products is quite a bit different from wealth management.

Tehranchian:We advertise in local papers — Employment News. We also look at Seneca College graduates. The college is right next to our office and they have a whole slew of fantastic graduates willing to work at very reasonable rates. We’ve had wonderful experience with them. When hiring assistants, I’ve had good experience with people who don’t come strictly from the finance industry, but such complementary professions or positions that demand a lot of attention to detail and accuracy and dealing with clients on a daily basis such as legal assistants or assistants to accountants.