Many parts of Steve Jobs’ legacy have come under scrutiny but one thing has never been challenged—his ability to find and recruit top talent. Steve’s advice is as relevant to any business today as it was 20 years ago, but it’s never been more applicable to the asset management industry. We’re undergoing a seismic shift in talent and culture and it’s no secret that our industry is struggling to bring in the right staff.
New grads with technical skills are looking to work an entirely different breed of company. Packages with flexibility, equity stakes, and a dynamic culture trump the lure of finance. A once well-trodden career progression in asset management no longer attracts individuals who offer the technical skills a digital operating environment necessitates. When going head-to-head with digital giants and tech start-ups, this is no easy feat.
Tried-and-true recruiting simply isn’t working for next generation talent. Allow me to borrow a few timeless quotes from Steve to help us understand where to invest resources in attracting, motivating, and retaining talent to build a talent pool that will drive digital transformation.
On attracting talent: “Hiring the best is your most important task”
At one time, the lure of the finance industry itself simply attracted the best of the best. Times have changed—the next generation is less influenced by compensation structure than in the past. Positions with more automony, company ownership, or leadership opportunities are often the most sought after. Unfortunately, these types of roles are easier to come by on the tech and start-up scene. The philosophy that new starters have to ‘earn their stripes’ persists in asset management; however, top talent doesn’t want to wait years for seniority if they don’t have to.
Understanding these motivations is only half the battle—asset managers need to transform the staid and hierarchical culture that is so ingrained. Re-orienting the career path around performance while finding a way to strike a balance with the new and old guard is easier said than done, but it is what will mark successful firms.
On motivating talent: “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do”
The key to motivating valuable employees is to consistently demonstrate that there are achieveable leadership incentives and a clear career path to success. Contrary to popular opinion, millennials are prepared to work very hard, but they want to know how to get to the next level and get there fast. This requires the asset manager to be transparent in terms of how individuals can develop within their organization – whether that means finances, titles, or responsibilities.
On retaining talent: “A small team of A+ players can run circles around a giant team of B and C players”
Retention is clearly an important factor in improving the talent pool but zero staff turnover is not always beneficial for an asset management firm—especially in recent years. An ‘old guard’ that has been around for decades that is averse to new technologies prevents rising stars from progressing, a key consideration for attrition of new talent. Given the challenges of these two cultures clashing, how does a company keep employees with fresh skills fulfilled and able to progress?
A key element in a next generation retention strategy is training. While a data scientist may come in with an extremely important skillset, to rise to the level of senior staff, he or she needs to understand the asset management industry. Often, this education is left to the individual to ascertain through their own research which can leave employees confused or demotivated. A course or onboarding process where non-finance tech grads can learn how our industry is structured and the major processes involved would pay off exponentially over the long run.
And with that, I will leave you with one more quote: “Management is about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could” As our industry undergoes transformative change, the onus is on us to lead and inspire our colleagues to rise to the occasion and embrace the next generation of asset management.