Is it time to reset your ‘people’ plan? - FP Advance

Is it time to reset your ‘people’ plan?

BY brett

Everyone says they know how important good support staff are. Although you wouldn’t always know that if you observed the working environment some businesses have created for “their most important asset.”
 
I was doing some research around ‘people’ strategy recently and re-read some excellent wisdom from Scaling Up, by Verne Harnish. 
 
One of his key points for your ‘people plan’ is to hire fewer people and pay them more. 
 
Why?
 
Because as anyone who has hired staff quickly learns, “one great person can replace three good ones.”

1. The Container Store

The foundational principle at this company is that  “1 equals 3” in that one great person equals three good ones as I outlined above. 

They hire only 3% of candidates who apply, pay salespeople 50% – 100% more than the retail industry average and provide 263 hours of training in year one (the industry average is 7 hours).

Verne paraphrases a quote from the founders: 

“Do we want a whole bunch of low-paid dumb folk; or would we rather have a whole lot fewer, better-paid smart folk?”

2. Costco

Costco is a buy-in-bulk warehouse where you can save money by buying larger quantities of goods. 

“Costco pays its employees roughly 70% more per hour than Sam’s Club , yet needs almost 40% fewer employees per dollar of revenue. And with a 6% employee turnover after one year vs. 21% for Sam’s, Costco saves a tremendous amount on recruiting, training, and development.”

Source: Scaling Up

3. Goldman Sachs

And in case you’re thinking this is all well and good for low paid jobs, apparently, Goldman Sachs pay employees almost twice as much as their competitors but havefewer than half the number of employees on a per-revenue basis and almost three times the profit per employee.” Source: Scaling Up


How can you pay people more?

As I read it, you need to understand two things. Firstly, we’re applying this to frontline employees, not the senior leadership and secondly, after paying people more, you’re still looking to end up with a lower total wage bill than your competitors. 

I see this in my work with firms across the financial planning profession.

Some firms turning over £1M pa have a headcount of 10, while others have a headcount of 5 or 6. 

With 5 or 6 excellent people on a team, they can be paid better than average and still deliver. 

Recruitment

Having said that, in many smaller firms I do see some business owners who are happy to pay more for good people, but it hasn’t always led to the positive outcomes I’m describing here. 

Why not?

Because their recruitment process is weak. 

If you offer more money, you’ll get loads of applications for your position, but it doesn’t necessarily follow that those applying are better than average or great (which is essential for this strategy to work).

So if you’re interested in finding great talent then you’ve got to have a great recruitment process. 

(FYI – The best person I know in our profession to help you create that process is Dominika Sieradzka at RIE Solutions. She runs a membership community for Practice Managers and Operations Managers called The Master Practitioners Club (MPC). MPC members have access to webinars and templates related to recruiting, shaping and nurturing great teams.)

Work Environment

Assuming you can identify the great talent through your recruitment process, then you’re also going to have to ensure you have a work environment that people want to be a part of and I’m not talking about a ping pong table and free sushi. 

Great people have options when it comes to the roles they take.

Here are a few things to think about doing:

a.) Make your staff your number one priority:

Happy staff create happy clients, who then refer and create happy shareholders. Simple.

Another great one-liner from Verne is his management philosophy: “De-hassle, don’t demotivate.” I really like it as a mindset. Talk to your staff members and try to find the sticking points or hassles in their day to day job and work to remove them.

“People join companies. They leave managers.” 
Verne Harnish

And help your staff work to their strengths. 

I have lots of conversations where business owners want a team member to do a particular task or role that just isn’t them (and often not what they were hired for). Don’t do it. If you’ve got a great team member, work hard to get them doing the things they love and are good at. 

If you need to shift tasks around your team in an unconventional way, just do it. Don’t get married to roles and job titles, especially if you’ve got great people on the bus. 

b.) Get your remuneration structure right:
The mix of fixed vs. variable remuneration in your business should reflect the culture of your business. 

If the culture is very individual and salesy, for some roles (like advisers) a higher mix of variable remuneration might be appropriate. 

However, most financial planning firms I know are actively trying to get away from that model. They want all advisers and all team members focused on only one thing; making clients happy. In that culture, I’d be thinking just pay people what they’re worth and take out all the variable remuneration, even for advisers.

c.) Structure the work environment to attract the right talent:
Coronavirus and lockdown have totally upended most firms’ working practices. 

Pre-Covid, most staff worked in a physical office. Now, that’s not always the case and many businesses are still operating perfectly well. 

Can you open your mind to more work options than perhaps you did pre-Covid?

Great staff have lots of options. So you’ll need to make sure that you are open to, and can offer, a style of working that meets a particular individual’s needs if you want them to come and work with you.

Don’t get stuck in the “you have to work in our office” mindset. 

Great people will get more done (wherever they are) and don’t need to be managed. Who cares where they’re based?

Moving forward

There are a ton of good quality candidates out in the job market right now. It’s as good as I’ve seen the hiring environment in 10 years. 

Now is the perfect time to be re-thinking your people strategy and snapping up a few of those great candidates, paying them more and operating with fewer people.

Just a thought.

Let me know how you go.


Some Free Webinars For You To Check Out

Did you know I’ve done a bunch of free webinars throughout 2020 for the Personal Finance Society?
 
Well I did. 
 
They’re all still watchable for free, anytime you like (although they may not stay up there forever, so get watching if a topic grabs your interest).

Here’s what’s available:

1. Are You Building A Business Or Creating A Lifestyle?
Are you really building a business? Or are you creating a lifestyle for you and your family? Sometimes this feels like the million-dollar question. There’s no right or wrong answer, but you absolutely must know which one you’re trying to create. Failing to decide feels like standing on a cracked iceberg, with your feet slowly moving in different directions. At some point, you’re going to have to choose which way you’re going and commit.

2. Fees, Value & Profit: Getting The Balance Right
How much should you charge for your work? Well, it depends on how well you understand and communicate your value. Get those two things in balance and the profits should take care of themselves.

3. Execution Excellence: The Key To Business Success
Managing your business effectively comes down to one core skill – can you execute? You can have all the ideas you want, but if you can’t make them happen you’re toast.

4. Future Proof Your Client Review Service (MOST POPULAR)
Most advisers spend most of their time delivering annual reviews to existing clients. If you want to generate more referrals from those review meetings, then they better be good and they better add value. The truth is, there are only two things you need to do at an annual review meeting to blow your client’s mind.

5. The Power In Your Purpose
When you know your purpose and have a plan to get there, you can walk through brick walls to bring your vision to life. But if you lose your ‘reason why’, it can be hard to drag yourself out of bed every day. If you’re looking for an injection of enthusiasm right now, then this is a webinar for you. Rediscover your mojo and light a rocket under your business.

6. Turnaround Your Business: A 5 Point Plan For Getting Things Back On Track
I created this when Coronavirus first hit and some firms were in trouble. However, it’s great information for anytime you feel your business needs a turnaround plan. 

Get Watching

If Christmas television starts to wear you down, watch me instead.
 
Go on. Take a look. There’s so much great information there for you. 


Now is the perfect time to be re-thinking your people strategy


Can you ever have too much of a good thing?  I think not.  If you’re with me, then sign up to receive this blog straight to your inbox every week. You’ll get tonnes of free advice to grow your Financial Planning business.  You’ll thank yourself later.

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ABOUT BRETT DAVIDSON When you work with FP Advance you work with me, Brett Davidson, directly. My motto is ‘advise better, live better’ and I practice what I preach. I’m straight talking and get to the heart of an issue quickly. There’s no beating about the bush, just a focus on helping things improve. Ask my clients – what I teach works.