Personal incentives

A few years into the depths of the last recession, I was discussing staffing with a friend in a similar sized firm. What he said went something along the lines of this: 'Now is the ideal time to create your perfect team. There are a lot of good quality people around who have been made redundant, often through no fault of their own. It's a great opportunity to significantly upgrade the quality and performance of your department.'

The wheel has now turned fully and a recent conversation I had went in completely the opposite direction. Now we were talking about how we can recruit and retain good quality staff. As the big firms continue to recruit heavily and drive up salaries, keeping young and ambitious staff fully motivated and invested in the firm grows increasingly difficult.

Anyone who has been involved in recruiting and training staff knows that it is a very expensive process. It is not unusual for recruitment fees to be in excess of 25 per cent of first year salary. Training and familiarisation with new systems and client banks is also expensive and time consuming, not to mention disruptive for clients. All in all, it is the latter problem most firms don't want.

Unfortunately the situation is only going to get worse as the baby boomer generation retires, leaving a smaller work force in place and more competition for quality staff. So where to now?

Firms can of course increase salaries, however I am not convinced short term monetary gain is what most staff really want. Different people are clearly motivated in different ways. One person might simply want a job that is conveniently located and does not require overtime or, the need for sleepless nights. However the next person might be motivated by status and financial reward, therefore the carrot of promotion and eventual partnership is all the motivation they need.

Of course not everyone wants to be the managing partner and to be honest, not many people are suited to the job.
In any case, a firm where everyone wants to be at the top is not going to be a happy or successful one, and is very likely be an unsatisfied one. Therefore it is important that firms are flexible enough in their recruitment and their benefit package, to ensure that they can keep everyone happy and the firm financially successful.

A good way forward is flexible benefits packages. These come in many shapes and forms. However allowing staff to trade holidays, pension contributions,
or extended maternity or paternity leave can be very attractive to employees.

Introducing a flexible working approach allowing employees to fit work around child care needs is often more appreciated than a slightly higher salary. Not all jobs need to be done between 9am and 5pm each day.

Among the more career orientated people, a clear career path is very important. This would involve defined goals, as well as benchmarking along the way with clearly attainable and mutually agreed objectives. Staff can then plan their careers accordingly. It is only when such agreements are reneged upon that problems occur.

I actually knew someone who had been promised partnership if they spent two years in a sleepy little tax haven, running the firm's one man office there. After 24 months of topping up his sun tan, drinking pina coladas and regressing technically, he came back in the middle of a recession to be told that circumstances had changed, and that his services would no longer be required. Needless to say,
he was not happy.

This brings me to another point about staff relations. Firms should always treat their staff with complete honesty and transparency. If you are being disingenuous, people will work it out and once you have lost your credibility, they will never respect or trust you again.

Firms will do well to remember that people are not all the same and they are not motivated in the same way. A flexible approach to staffing and remembering to always be honest and transparent, will go a long way to the success of any firm. Without the trust and respect of staff,
the firm will ultimately fail. 

Geraint Jones is a tax partner at BKL Tax

He writes the regular in-practice article on doing business for Private Client Adviser