Since the beginning of the pandemic, millions of Americans have quit their jobs in what has been deemed as the Great Resignation. While this phenomenon has been experienced across all industries, the financial planning sector has experienced especially high turnover and low retention rates. One study by Fidelity found that over half of advisors in the financial services industry have moved or considered a move in the past five years.¹
As the Great Resignation continues into 2022, it is important for financial services firms to implement effective retention strategies. When companies fail to retain employees, the result is a loss in productivity, profitability, and company morale. In their research, Milman and Dicksons found that 88% of employees who quit voluntarily did not leave because of compensation.²
This means that to effectively retain employees, firms should focus on building a positive and inclusive environment where employees feel that they can grow with the company.
An effective retention strategy begins with hiring the right employees. Hiring managers should focus on candidates’ attitudes and willingness to learn over their qualifications on paper. Within a supportive environment, potential new hires who are open to seeking out new skills can quickly fill in the gaps in their abilities.
Foster Good Communication, Culture of Recognition
A common phrase when discussing team leadership is “People leave managers, not companies.” This proves to be true, as up to 80% of turnover is due to poor management and employee engagement is directly tied to the quality of management.³ A study by Gallup found that employees with highly engaged managers are 59% more likely to be engaged than those supervised by actively disengaged managers.⁴
To create a welcoming atmosphere within an organization, managers must foster good communication with those they manage. Effective communication is open, honest, and does not only flow one way. Leaders can facilitate open, two-way communication through face-to-face meetings, employee surveys, suggestion boxes, brainstorming sessions, etc. Doing so will not only make employees feel connected and accountable but will also boost morale and retention.
In conclusion, there are many ways for financial services firms to show employees that they are valued and respected. By creating an inclusive environment and providing ample opportunities for personal and professional development, employers can boost retention in addition to increasing productivity, engagement, and profitability.
Suzanne Patrick-Lawrence is the CEO of Advisor Business Solutions. She is a business planning and communications specialist with over 20 years of experience developing business and marketing strategies for financial services, global corporations, government agencies, nonprofits, and small businesses. She is passionate about working with financial advisor practices seeking guidance, support, and structure to position their firms through all life cycles of growth and a successful transition. To learn more about Suzanne, connect with her on LinkedIn.