The origin story of many RIAs is quite similar: a group of advisors unites with the sentiment, “We no longer need this large bureaucratic organization behind us, let’s go into business for ourselves!” They invite their support staff to take a leap of faith and join them, and before they know it, they are officially open for business. However, several months into their new venture, they realize they need additional staff to run the enterprise—a compliance officer, an operations director, a performance reporting specialist, etc.
In those early days, the owners rarely set out to hire for these specific roles. Their initial hiring strategy typically focuses on, “Let’s find really smart people, and they can determine which role they prefer!” This approach works well during the startup phase, where there are numerous open spots to assign. However, as critical roles begin to be filled, it’s essential to shift your hiring strategy from, “Let’s hire really talented people!” to “Let’s hire for very specific skillsets to fill specific roles on the team.”
This dynamic recently played out in the WNBA draft on April 14, when the expansion Golden State Valkyries selected Maryland star guard Shyanne Sellers with the 17th overall pick. A three-time Big Ten First-Team selection who averaged over 14 points per game, Sellers was the most talented player available at pick No. 17. However, less than three weeks later, on May 3, the Valkyries announced they had cut her from the team. What happened?
Sellers’ talent hadn’t diminished in that brief time; she didn’t negatively impact the locker room culture. The issue was that her specific skillset was redundant. In drafting Sellers, the Valkyries somehow forgot they already had six guards on their roster, including veterans like Tiffany Hayes and fan favorite Kate Martin. With only 12 spots allowed on the roster once the season kicks off on May 16, there simply wasn’t room for another guard, no matter how talented. Countless RIAs make the same mistake—wasting their “draft picks” by hiring for talent instead of need.
So, how can you avoid this pitfall at your RIA? Start by assessing the skills necessary for your team. Conduct a thorough skills assessment by creating a matrix that aligns current employees with the skills required for various roles. Engage in one-on-one discussions to uncover individual strengths, weaknesses and career aspirations. Encourage team members to self-evaluate and provide feedback on areas where they feel less confident. Additionally, analyze project outcomes to identify recurring challenges that may signal skill gaps. By regularly revisiting this assessment, you can ensure you remain aligned with evolving business needs and can proactively address skill gaps as they arise.
Next, rethink your job descriptions. Crafting targeted job descriptions is crucial for attracting the right candidates. Clearly define the specific skills and experiences required for each role. Highlight your company culture and the role’s impact within the organization. Include key responsibilities, expectations and opportunities for growth and development. By providing a comprehensive overview, you not only attract qualified candidates but also set clear expectations for each role, leading to a more efficient hiring process and a better team fit.
Finally, revise your interview process. The interview should go beyond merely assessing resumes; it’s an opportunity to evaluate candidates for fit and skill diversity. Start with behavioral questions that explore past experiences and how candidates handle challenges. Incorporate situational assessments to gauge their problem-solving abilities and adaptability. Involve team members in the interview process to gain multiple perspectives on the candidate’s compatibility with the team culture. This collaborative approach fosters a more thorough assessment, ensuring you select candidates who not only have the necessary skills but also enrich your team dynamics.
As your RIA evolves, so must your hiring strategy. The “hire the most talented person and figure out their role later” approach works well in the early days when every role is a blank slate. But as your firm grows, each new hire should serve a specific purpose. A great candidate isn’t just someone with talent; it’s someone whose skillset fills a gap and propels your business forward. By identifying skill gaps, crafting targeted job descriptions, and refining your interview process, you can build a team that meets your needs today and positions your firm for lasting success.
This article originally appeared at Wealthmanagement.com.