According to recent stats, as many as 93% of businesses are looking to hire someone. Whether you need to hire because your practice is growing or because someone left and you have a hole to fill, the pressure to hire quickly can lead many advisors to make bad decisions. It may seem prudent to just “have a body” in place now to do the job and worry about finding the right fit later. But hiring the wrong person can end up costing you more time, money, and frustration than not hiring anyone at all.
The Financial Costs of Hiring The Wrong Person
It may seem like not having someone is costing you money, but studies have continuously shown that the cost of hiring the wrong person far outweigh any perceived benefits of the “butt in a seat” approach to hiring. On average, a bad hire costs businesses roughly $15,000 and as much as 30% of that hire’s annual salary. Those costs are attributed to a lack of productivity, lost sales, time spent dealing with HR issues, and time spent having to fix mistakes, among other factors. No business wants to lose money, especially with the threat of recession looming.
The Culture and Personal Costs of Hiring The Wrong Person
It’s not enough to hire for skills. Advisory practices need to hire for fit too. A bad cultural fit can create turmoil and disrupt team dynamics. These disruptions create distractions that take away from the focus on clients and growth and can even cause good employees to leave. They also suck up a lot of the leader’s time and energy as they deal with internal conflict and cultural infractions. A leader’s time is valuable, and the cost of these distractions is immeasurable.
The Reputation Costs of Hiring The Wrong Person
A bad fit employee can also have a tremendous impact on a practice’s reputation with clients. Whether it’s because the hire isn’t a strong cultural fit, can’t do the work, or is creating distractions and disruptions for the team, a client can and will feel it. This has a significant negative impact on the client experience and can even cause them to look for another advisor. The health of the business and of the relationships among team members is a strong indicator of an advisor’s ability to manage the client relationship and the client’s finances. The wrong hire can damage the trust you have built with your clients and in your ability to deliver sound financial advice and services.
Slowing down and taking the time to find the right candidate may seem painful in the short-term, but it will save your practice a great deal of heartache, time, and money in the long run. Most advisors don’t have the time to spend recruiting and onboarding new team members, nor do they have the knowledge to thoroughly vet and select the right candidate. Utilizing an experienced industry recruiter can not only save you time and money, but it can also ensure that you don’t rush the process or select a bad fit. It’s better to get it right the first time and to use an experienced third party so you can stay focused on what you do best – serving clients.