Much has been written about how it will be more difficult and expensive to find and retain talented people for the financial planning industry. Some have gone so far as to declare this a major sea change. Actually, it's the inevitable consequence of an industry growing up. Finding and retaining the right professionals is not more difficult, it's just that fast-growing firms need higher-caliber recruits.

Unfortunately, folks who have written much of what you've been reading about hiring difficulties don't actually hire financial planners. I, on the other hand, do. In this column, I address what's working well in our firm.

Reality Check

There are three critical trends affecting staff hiring:

Entry-level professionals from Generation Y. Born from 1976 to 1986, Generation Y workers are not nearly as motivated by money as the baby boomers were. They won't respond to the same hiring tactics as baby boomers or Gen Xers. To recruit, train and motivate these folks requires different techniques.

• The need for more skilled employees for firms to compete in the marketplace. This is an inexorable trend in many industries, including ours. (For more information on positioning, read my March 2005 column, "No Chicken Little"). Each year, it becomes harder to find more talented people. Why is that? Firms must ramp up faster to remain competitive, so they need productive staff more quickly and are willing to pay a premium for the best and brightest—whom we call B-Bs.
• Job evolution and specialization as our businesses grow. This is a fact of business life. As companies get bigger, jobs become more specialized. If you are growing and want to be scalable, your staff must specialize, or your firm will quickly become both inefficient and uncompetitive. However, another critical factor is the evolution of firm structure based on changing business models and how that continuing metamorphosis is changing the financial planning industry.

Connecting the Dots

Connecting with Gen Yers is critical. We use outside experts and professional evaluation tools to assess candidates' work attribute profiles. This has helped us immeasurably in finding and retaining qualified candidates.

Speaking of retention, Gen Yers report that their biggest reason for leaving is they do not like their supervisor. They readily challenge authority and the old way of doing things, sometimes in ways that are unsettling to older professionals.

Young employees expect more than job security and fair compensation. They're after an enjoyable work experience. They want to feel like a part of something more significant than just their daily work. Teamwork is important to them, and they need to see the value of their contribution early and often. Gen Yers are looking for a connection to their workplace and to the world at large, and they want a mentor to guide them there. Managers who know how to build relationships with their staff can make these things a reality.

What's the benefit to the firm? By encouraging Gen Yers to come up with ideas they consider better, more efficient or more cost-effective, their contributions can be highly visible and have an immediate impact. If they receive praise for their contributions, they feel part of the big picture. That happens in our firm. Junior employees are expected to contribute to new projects, service offerings and procedures.

From a mentoring standpoint, our planning career program provides juniors with the education, experience and professional training to become a client relations manager. They have a set of career rails to guide them, along with close personal contact with their supervisors. Gen Yers work toward an expected professional standard with no uncertainties, which provides substantial retention glue. No one has left our firm because there was "no future" or they "didn't know how to advance."

Finally, we rotate our junior professionals among planning teams. So there is no silo building or career stagnation, which tend to occur when relationship managers build their own team in an insular fashion. Because younger employees know they will get to work with more than one senior planner, we avoid any potential resentment on their part from being "stuck" or working with someone they do not enjoy.

Let Me Take You Higher

Life was certainly simpler for firms in the 1970s and early 1980s. To generate meaningful revenue, you merely had to sell a lot of product. The six-step planning process, a few products and simple support and delivery systems were all you needed to do an adequate advisory job.