Finance Compensation: Benefits that Attract New Talent
Job opportunities abound within the finance industry, including a demand for financial advisors and financial analysts, among other roles. Yet there is growing competition for talent.
In response, today’s leading staffing companies are attracting new talent by offering quality of life benefits for younger workers who value work-life balance.
At the same time, competitive finance salaries, along with other perks and incentives such as bonuses, remain key to attracting and retain finance talent, as the group of staffing experts point out below.
Howard S. Diamond, chief operating officer and general counsel, Diamond Consultants
“In our business, it’s a seller’s market. Big firms and small firms want to recruit producing advisors – that’s how they grow inorganically. There’s a mad dash for them. The advisor population is aging, and younger talent is not coming in. Brokerage houses need a value proposition and to differentiate themselves from the pack.”
“The transition bonus is big. If you’re a million-dollar producer and move across the street, you can get a million dollars, mostly in stock. Or you’ll see a forgivable promissory note — it’s set to a number of years, such as nine, and if you leave after five years, you owe 4/9 back to the firm.”
“If the advisor can switch firms and duplicate their performance, we’ve seen 400 percent deals – it just depends on how much a firm wants a team. They may be growth-oriented, or may be hiring for diversity, and that commands a premium. It’s been hot, and it’s been hot for years.
There’s been a large push for advisors for some time.”
Steven Lewis, Director, Michael Page
“When it comes to competition, it depends on which side of the market they are in. Insurance is pretty steady, while investment banking is very bonus-driven, and corporate banking is a little more like a corporate environment.”
“The must have for hiring financial employees is offering a good work-life balance, career progression and a sense of achievements. In addition, equity and profit-sharing are very sought after in the financial world.”
Peter Gault, President, Gault Staffing Inc.
“The financial industry is heavily regulated, and a great deal of compensation in this industry is still tied to commissions based on the book of business an individual is able to or already has developed. With that in mind, financial firms and institutions continue to look heavily at what a potential candidate can bring to their organization in the terms of new business development.”
“Employers need to take a sincere look at compensation structure that combines a base salary along with a commissions or bonuses. One of the largest complaints we hear from candidates wanting to leave the financial industry is because there’s no income stability.”
“The financial industry is extremely competitive. Employers need to establish clear, realistic sales goals, clearly defined territories and clearly defined product lines. Including product line and territory expansion as rewarded growth goals would be a great way to make compensation packages more competitive.”
“Financial firms that we will take on as clients must prove that they’re truly forward thinking, have created a clearly defined career development path and do all they can to enable everyone they hire to become a top-level producer. Some ways to do that include education and certification support, provide 6-month and 1-year mentors, and in turn, allow employees the opportunity to fill mentor roles after completing specified levels of advancement, with mentor roles including a base salary bump for the mentor period.”
Jim Adkins, founder and CEO of Strategic Financial Associates LLC
“Many financial companies have base pay, which compensates the employees for their time and additional bonus opportunities to incentivize them to perform at a superior level. The bonus depends on various factors which reward the employees for successful achievement of specific objectives. This is the model that we typically go by.”
“In the financial planning field, many different compensation strategies exist to reflect the different types of financial planning companies. Some are small and tend to offer lower compensation initially with the long-term potential of succession planning. At a larger firm, you will typically find a higher salary with a more rigid set of daily tasks.”
“Beyond offering benefits such as healthcare and a retirement plan, you can make your compensation package competitive by allowing the employees to work more closely with you in anticipation of a management position down the road.”
“Top companies may offer a bonus of $5,000 to $10,000 in order to incentivize performance, which we sometimes do. Also, in the past when we placed top candidates in the company, we brought each employee and his or her spouse on a trip to Hawaii. It was a wonderful way for everyone to celebrate a year of hard work.”
Kathleen Downs, Recruiting Manager for Robert Half Finance & Accounting
“It’s incumbent on your CFO and HR to understand what the market is paying for the skills you have in your company. It doesn’t matter what you budgeted or think it’s worth — if your competition is paying a higher wage for the same top talent, you have risk.”
“Equity, participation bonuses, profit sharing — those are always exciting for anyone, especially if they believe in the management team and the viability of the business. The other thing is that the financial world realizes that the bonus is a component that’s not always in your control. Employees don’t mind hearing “it’s a recession” or “it’s our worst year ever” and that there are no bonuses — that’s not a reason to leave. But not explaining why or if the company is making a lot of money but not offering bonuses — they will evaluate and consider their options.”
“Counteroffers for employees who have said they’re looking to leave typically don’t work. If a person is leaving because they didn’t feel like they were fairly compensated and if the root of it all is lack of communication, a counteroffer sends a message that ‘you’re literally not worth it until you’re getting ready to go.’ If you offer a counteroffer, don’t get your hopes up. Have an honest dialogue — they might be dissatisfied because of no work-life balance or lack of growth. You might be able to buy some time with a counteroffer, but if the root problem is still there, they will leave.”