The annual salary and review process is the perfect time to revisit your firm’s human capital strategy and make sure you have programs that develop and retain your talent. The following tips will help you maximize the process.
Make sure you benchmark your compensation structure. The talent that is in highest demand will command the most competitive cash compensation. Each firm also needs to decide what level and skill set is needed to support the firm’s goals, then set its cash compensation to be able to compete in those areas. The growth of your firm requires the hiring of advisors and staff at every level. According to the 2013 InvestmentNews/Moss Adams study experienced professionals are in high demand with compensation growing. The total compensation of a lead non-owner advisor has grown from $120,000 in 2011 to $134,000 on median in 2013. Similarly, the compensation for service advisors (level 2) has gone from $75,000 to $81,000 in total.
Ensure that your firm’s total cash compensation is competitive. Look at how salary and incentives are balanced with each other; how cash compensation is balanced with other plan components, and the market demand for the positions in your firm. Combining fixed and variable compensation rounds out a firm’s compensation package, and by tying variable compensation to specific objectives and outcomes, this model can motivate employees to improve behaviors and practices that drive success.
Tie incentive compensation to measurable outcomes so they are easy to track, and they motivate. One of the main reasons firms use incentive compensation is to increase staff motivation and to increase behaviors and attitudes that correlate with the firm’s success. Objectives are a key part of the compensation mix, especially for incentive pay, and they need to be documented as well as used to drive performance.
Solicit input from employees during the year, not just at review time. Two-way open communication is essential to an effective working relationship. Giving employees timely feedback on a regular basis can be an opportunity to encourage staff development and continuous improvement year-round. Have employees assess their performance, and focus on accomplishments and areas for improvement. In addition ask for their input on areas for development and discuss career goals, specifically the path for them in your firm. Review the plan with employees on a monthly or quarterly basis to correct any issues that arise and ensure that your employees stay focused, motived and engaged.
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