A THREE PART SERIES
Author note: After I wrote my first article on GoBuyside [a niche recruiting firm specializing in the investment management industry] last month, I received a lot of feedback from readers interested in using their platform for career placement – and the article received more unique engagement across the board than many of my other articles. At that point, I recognized I hit a topic that resonates with our readers. This prompted me to dig even further and continue familiarizing myself with the GoBuyside platform and model – to give you, our readers, more valuable content. I’ve since conducted a three-part investigative study on GoBuyside. Read on for Part 1 of 3 – feedback is welcome as always. Cheers, SJ
Financial services and investment management CEOs repeatedly mention the ongoing struggle to find enough new talent. In one revealing survey, less than 10 percent of C-level executives expressed confidence about recruiting investment management talent with specialized skill sets.
Even in surveys with less dramatic results, the “confidence level” rises to only 33 percent. Clearly, this is a significant and recurring problem in search of one or more solutions, especially for an industry that depends on visible growth and success stories.
However, there is some good news. With only rare exceptions, the widespread recruiting challenges acknowledged by human resource managers and corporate executives are all preventable. This article is the first in a multiple-part series exploring cost-effective and practical investment management recruiting solutions.
Investment Management Recruiting Solution: Using Industry-Specific Recruiting Specialists
Perhaps the easiest and fastest solution for preventing a recruitment challenge is to use recruiting experts that specialize in the investment management sector, such as those recruiters who work at GoBuyside, an executive search firm. When investment management firms choose to use a general recruiting strategy, they overlook a practical way to eliminate a critical recurring challenge — finding specialized talent. In the medical field, this would be comparable to selecting a general practitioner instead of an ophthalmologist to perform delicate cataract surgery.
While using industry-specific recruiting specialists instead of generalists will not always prevent or eliminate all investment management recruiting challenges, it is a viable and cost-effective strategy with three major advantages:
- Reduced opportunity costs
- Increased niche expertise for a niche business
- Access to more top-tier investment management talent
We are publishing out next compensation report in 2018! Details from the last one here:https://t.co/ROobceKntj
— GoBuyside (@gobuyside) May 23, 2018
Opportunity Cost Advantages
In a “time is money” environment, investment management firms should routinely be searching for ways to reduce the time it takes to finalize a new hire. A successful investment management employee should produce 5-10 times or more of their annual compensation in new revenue. Unfilled positions not only continue to consume valuable time but also cost hedge funds, private equity firms, and other investment management firms a significant amount of revenue. All of these factors are often overlooked by generalized recruitment firms but are key components in finding the right talent at leading market firms such as GoBuyside.
The true opportunity costs for investment management companies are not always obvious until tangible results involving industry-specific recruiting specialists are compared to previous lackluster results with generalists. In one real-life example involving a credit hedge fund with $2 billion in assets under management, a generalist recruiting firm was retained unsuccessfully for 60 days and an investment management specialist recruiting firm successfully closed the search in less than two weeks under the same conditions.
Niche Specialization Advantages
The operational needs of specialized investment managers are distinctly different from virtually all other industry sectors, even those requiring advanced financial expertise. The importance of recognizing this critical difference is perhaps best illustrated by the increasing success of inbound marketing in reaching niche consumers and buyers.
With customer-centric inbound marketing, it has become clear that consumers prefer specialized niche communication over generalized mass-audience strategies. Marketer-centric and generalized techniques such as cold calling and traditional advertising are now increasingly viewed as obsolete. Similarly, generalist recruiting should be viewed as obsolete and ineffective in achieving workable and consistently-successful investment management recruiting solutions.
Talent Access Advantages
In a stellar demonstration of a “show me the money” moment, successful investment management recruiting strategies require regular and uninterrupted access to a dedicated investment management talent platform that reflects highly specialized skillsets. In order for investment banks and consulting firms to secure and maintain a market leadership position, the harsh reality is that investment managers should consider employing a more targeted recruiting strategy than is feasible with generalist recruiters.
The advantage of using industry-specific recruiting specialists applies primarily when investment management firms select recruiting firms that are also leaders within the specialized subset of investment management recruiters with an existing and market-leading investment management talent platform.
A Final Investment Management Recruiting Observation — Improve Hiring Skills
By some standards, recruiting and hiring is the most important management skill. Some believe otherwise because hiring is used only sporadically and argue that hiring skills have no need to be improved. In contrast, when asked about his view on the importance of hiring skills, Steve Jobs said, “I disagree totally. I think it’s the most important job.”
However, Steve Jobs also said, “Recruiting is hard.” One lesson to be learned is that most managers and executives need to improve hiring skills and prevent recurring recruitment challenges.
A reminder: This series will continue with “GoBuyside Investment Management Recruiting Solutions, Part 2: Advantages of Specialists Based in New York.”
An Overview of GoBuyside: GoBuyside is the market leader in exclusively providing recruiting solutions to the investment management sector. Clients include private equity firms and Fortune 1000 companies. GoBuyside is a leading executive search firm established in 2011 as a tech-enabled platform designed to disrupt the traditional industry search and hiring model for investment management recruiting. GoBuyside is the largest investment management talent platform in the United States.
The GoBuyside global financial talent network extends to 500 cities and 100,000 individuals. GoBuyside is based in New York and serves consulting firms, investment banks, hedge funds, and private equity firms.
GoBuyside Investment Management Recruiting Solutions, Part 2: Advantages of Specialists Based in New York
This is the second in a series evaluating practical investment management recruiting solutions. In part one, the focus was on three major advantages of using industry-specific investment management recruiting specialists instead of recruiting generalists.
A Second Investment Management Recruiting Solution: Using Specialists Based in New York
Many famous quotations herald the differences of living and working in New York. One says, “Most cities are nouns. New York’s a verb,” by John F. Kennedy. Another observation tells us, “Once you have lived in New York and made it your home, no place else is good enough,” by John Steinbeck.
However, what is less obvious about New York is why investment management companies and prospective employees can eliminate or prevent several common recruiting problems by using recruitment specialists based in New York. Here is an abbreviated list of 10 competitive advantages to using investment management recruiting specialists based in New York:
- 72 Fortune 1000 companies are headquartered in New York City, making it the top-ranked city for Fortune 1000 companies.
- By many accounts, New York is the easiest place to hire financial talent.
- New York City has more than 8 million people speaking about 800 languages.
- Brooklyn and Queens on their own would each rank as the fourth largest city in the United States.
- New York has the highest concentration of billionaires, estimated to be more than 100.
- Of the 10 largest private equity firms, five are headquartered in the New York area.
- New York is a primary hub of national and international financial information.
- Wall Street and the New York Stock Exchange are global symbols of investing.
- It is relatively easy to get to New York from anywhere in the world.
- Of the 10 largest hedge funds in the world, seven are based in the New York metro area.
The Investment Management Recruiting Advantages of Geography and Clustering
Even in a high-tech environment that involves instant communication, businesses continue to relish the idea of clustering in close proximity to each other. Within the worlds of investment management and financial services, New York is the epitome of “The Perfect Cluster” when it comes to the highest geographical concentration of companies and highly-skilled experts.
The Personal Touch Is Often Mandatory to Seal the Deal
Successful investment management recruiting often relies on a timely personal touch to get the job done. In terms of a genuine personal touch, actually living and working in New York is far superior to flying in from out-of-town or out-of-state. At the same time, relying on the old-fashioned approach of networking or modern social media networking is simply not a personal touch in the truest sense. If anything, social media and old-fashioned networking are impersonal and mechanized strategies that no longer work in practical, cost-effective, and customer-centric investment management recruiting solutions.
21st Century Recruiting Realities
Succeeding in New York requires flexibility, constant innovation, and speed. Many traditional recruiting firms that are based in New York are still using recruiting strategies formulated in the last century. While being based in New York is a critical component in achieving investment management recruiting success, the New York location by itself is not enough. Unlike the real estate mantra of “location, location, location,” success stories for investment management recruiting also require a 21st-century recruitment platform that uses innovative technology, flexibility, and speed. However, a New York location combined with a superior recruitment platform is indeed a winning combination.
A Final Investment Management Recruiting Observation — A New York State of Mind
Here is a closing thought about the inescapable prominence of New York for investment management firms and new talent candidates said by Saul Bellow: “I think New York is not the cultural center of America, but the business and administrative center of American culture.”
In another timeless viewpoint, John Updike tells us, “The true New Yorker secretly believes that people living anywhere else have to be, in some sense, kidding.”
A reminder: This series will continue with “GoBuyside Investment Management Recruiting Solutions, Part 3: Advantages of On-Demand Talent.”
More About GoBuyside: GoBuyside is headquartered in New York and currently represents more than 400 client companies operating in 52 cities and 16 countries. These clients include investment banks and consulting firms. GoBuyside specializes in working with all investment management enterprises, including private equity firms, hedge funds, and Fortune 1000 companies.
GoBuyside is a 21st-century recruitment platform established in 2011 with talent resources encompassing 10,000 firms in 500 cities. GoBuyside is the largest investment management talent platform in the United States.
GoBuyside Investment Management Recruiting Solutions, Part 3: Advantages of On-Demand Talent
This is the third article in a series reviewing cost-effective investment management recruiting solutions. In part one, the emphasis was on using recruiters that specialize in the investment management sector. Part two described the advantages of specialists based in New York.
A Third Investment Management Recruiting Solution: Using On-Demand Talent
When investment management firms are faced with a recruiting shortfall for specialized permanent positions, one successful solution is to use on-demand talent by hiring specialists for short-term projects and part-time consulting engagements. Here are some of the advantages of using an on-demand talent strategy:
- Many investment management companies have short-term project needs that do not require permanent employees.
- Employers pay only a fraction of full-time hire costs.
- An increasing number of highly-skilled investment management specialists prefer working in multiple short-term roles instead of one permanent role.
- Short-term projects allow investment management firms and on-demand talent to work together in a collaborative atmosphere that may lead to a long-term working relationship.
Short-Term Investment Management Projects
In a fast-paced and frequently-volatile financial environment, it is often necessary for investment management firms to make fast decisions that also require quick execution. However, many of these business opportunities can be acted upon even more quickly if a company can immediately “scale up” with new team members who have specialized skills.
The ability to obtain and use on-demand investment management talent can help private equity firms and other investment managers to gain a competitive edge. The only potential challenge concerning the on-demand strategy is finding a reliable source of short-term project talent. To address this possible challenge, corporate executives and human resource professionals should always evaluate the capabilities of investment management recruiters to hire on-demand talent that is available on a fast-turnaround basis.
While reducing recruiting costs is not always a winning strategy, one unmistakable advantage of hiring on-demand talent instead of full-time employees is the lower fee structure. In addition to paying only a fraction of full-time hire costs to an investment management recruiter for short-term talent, hiring companies can also save by avoiding traditional benefits and other compensation requirements of a full-time hire.
As noted above, the ability to “scale up” can provide a competitive advantage for investment management organizations. In terms of cost-saving opportunities, the ability to quickly “scale down” when on-demand talent is no longer required means that short-term project expenses can be reduced immediately.
In the investment management sector and many other specialized industries, some of the best prospective employees are not looking for a full-time job. Due to changing lifestyles and family priorities, flexible investment management employers can obtain access to highly skilled specialists that are otherwise impossible to find. If investment management firms employ a customer-centric hiring strategy, that opens the door to on-demand talent and short-term consulting engagements.
Potential Transitions from Short-Term to Long-Term Roles
It is only natural that some of these short-term investment management consulting engagements will eventually lead to a permanent role. With on-demand talent, investment management firms have the opportunity to work directly with specialized talent without initial commitments for an extended role. Conversely, short-term project specialists have the opportunity to see how one or more investment management companies treat employees without making a long-term commitment.
A Final Investment Management Recruiting Observation — Recruiting Fees and Costs
When analyzing why so many investment management recruiting efforts fail, one contributing factor can be a decision to reduce recruiting costs. To help determine whether recruiting costs and fees are warranted, the following observation by Red Adair can be instructive: “If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.” Red Adair was known for his expertise as an oil-well firefighter and troubleshooter, an occupation that clearly favored professionals over amateurs.
Summary of the GoBuyside service: GoBuyside provides a cost-effective service with fast turnarounds for clients that have short-term project needs. These clients include hedge funds and investment banks. In addition to recruiting for permanent positions, GoBuyside helps client companies to hire talent for part-time consulting engagements. The immediate client access to top-tier talent for on-demand needs via GoBuyside enables individuals to serve in multiple short-term roles while employers pay only a fraction of full-time hire costs.
GoBuyside is based in New York and is the largest investment management talent platform in the United States with talent resources that exceed 100,000 individuals from hundreds of cities throughout the world.
Learn more about GoBuyside before the GDPR EU this weekend.