In recent years, the number of family offices has been increasing rapidly. This is partly due to the many benefits and perks of running these types of businesses. However, this doesn’t mean that family offices are without their challenges. In fact, there are a number of challenges to consider when it comes to family office recruitment and compensation. Are you currently undergoing a family office executive search? Perhaps you’re trying to create effective and fair remuneration packages. Let’s take a look at some of these challenges and how you can overcome them to ensure the success of your family office.
Challenges for Family Offices Regarding Compensation and Recruitment
Attracting Outside Talent
Many professionals are unaware of the family office industry or believe it is an industry that only caters to a specific type of individual. Therefore, external recruitment becomes quite a challenging process since many of the people who single and multi-family offices are interested in do not understand how these businesses operate.
Solution
You should consider working with reliable family office recruiters to help your business find the talent it’s looking for. Family office headhunters have a proven track record when it comes to finding the right type of talent.
Furthermore, they have an extensive network of candidates looking for employment in the family office industry. Therefore, whether you’re looking for someone with expertise and experience in wealth management, succession planning, private banking, or more, you can count on family office recruiters to find the right person for the job.
Lastly, these professionals have the knowledge and experience to help family office clients identify the type of employees they need and to get in touch with them as soon as possible. This way, you won’t have to waste any time on the recruitment process, finding the right talent, or trying to interview candidates that aren’t available.
Struggling to Obtain Relevant Data on New Talent
The family office industry is extremely specialized; therefore, it can be quite challenging to obtain relevant data on new talent. Larger companies generally use large data providers to assist in finding talent. However, because of the specialized nature and intricacies of family offices, these services are too generalized to find talent for a family office position.
Solution
One of the ways your family office practice can overcome this issue is by creating peer groups with trusted and reliable advisors who have the in-depth and focused data you need. They can help you to establish relationships with potential employees because of their knowledge of the talent pool.
However, one of the industry’s best practices is to use family office recruitment services. These multi or single-family office recruitment firms have access to all the data you need. Therefore, they can find new talent for you, which will save you a lot of time and money in the long run.
Creating Appropriate Compensation Structures
Whether you work in a single-family office or multi-family office, you’re probably aware of the challenges associated with compensation structures. Choosing between fixed and variable remuneration, as well as what to base incentives on, can be tricky.
Family offices generally don’t follow the same type of compensation structures that larger corporate firms do because of the specialized nature of the firm. This specialized nature along with comparisons made against other investment institutions means that compensation is usually calculated on a more individualistic basis.
Solution
When determining a compensation structure, you need to consider a number of factors, including long-term incentives, performance evaluation and metrics, your business strategy, and competition. Family offices need a compensation plan that will work in tandem with their mission, vision, values, and objectives.
While remuneration is determined by senior-level management and those with executive leadership positions, it could be helpful to communicate with employees and obtain feedback regarding their remuneration. It is also helpful to make sure they understand how remuneration it is structured.
Integrating New Talent into the Firm
When you recruit individuals who have worked in larger companies or the public sector, the transition into the family office industry can be challenging. The most obvious reason for this would be size. Family offices are generally much smaller than the teams the person would’ve worked with previously. A smaller business usually means increased responsibilities. Executives at family offices are often responsible for training and mentoring younger talent, which is something new recruits might not be used to.
Solution
One way to address this issue is by recruiting people who have past experience working in family offices. This way, the individual will already be familiar with the nature, structure, and responsibilities associated with family businesses and will not have to transition from scratch.
However, keep in mind that this reduces the size of the pool of candidates even further, which is already a fairly small pool to choose from.
Finding a Balance with Family Members
One of the most distinctive features of family offices is the family integration dynamic. After all, a family office is an investment and wealth management firm that works for wealthy families. Therefore, it’s not easy to always keep business and family separate. There may be times when family members don’t agree with the person you’re interested in hiring, making the recruitment process more complex.
Solution
You need to have clear policies when it comes to family office recruitment and compensation. This can be achieved by establishing a recruitment process and consulting with family members before finalizing these policies to ensure their needs and demands have also been considered, and that there will be no further issues down the line.
The Bottom Line
As you can see, family offices have their own set of unique challenges when it comes to compensation and recruitment. However, there are effective solutions you can implement to ensure you overcome these. Overall, if you want to ensure your family office addresses these challenges appropriately and continues to grow, we highly recommend hiring family office headhunters. These professionals can help you establish creative and effective strategies to attract top talent in your industry.
For a free consultation on your family office hiring strategy, contact us at info@questorg.com or 212-971-0033.
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