Empowering and Attracting External Talent in Family Businesses and Offices

Introduction

Family offices are increasingly looking beyond the family circle to hire talent, with 4 in 10 planning to add new staff this year and 28% opting for professional (non-family) talent. The growing need for specialized teams to manage larger and more complex portfolios is driving this trend.?

Despite this growing need for talent, recruitment and retention remain top challenges for family offices. They are often seen as less attractive to young professionals compared to traditional finance firms, offering limited growth opportunities and lacking brand recognition.?

In my experience, people often caution against working for family offices or businesses due to their private nature and perceived lack of transparency. This blog will explore strategies for family offices to retain talent and offer advice for professionals on integrating into closely-knit family office environments.

Understanding Family Business Culture

Professionals need to understand that family business cultures and values differ significantly from non-family ones. Four critical mindsets allow them to excel: a focus on purpose beyond profits, a long-term view on reinvesting in the business, a conservative and cautious stance on finances, and processes that enable efficient decision-making.?

Many family businesses strive to maintain their legacy while also seeking transformation and innovation, aiming to strike a balance between tradition and modernity. They often look to diversify their businesses, which creates a need for external talent to fill skill gaps in relevant areas.

Source

By recognizing and respecting family traditions and dynamics, outside talent can better understand how family businesses operate and how they can contribute to common goals. Talented non-family staff members should be encouraged to immerse themselves in the company’s history and absorb the family’s values. This also means that family businesses should communicate their purpose and values to outside talent and hire people who share these values. Strong cultures are regularly associated with higher employee commitment, satisfaction, retention, and productivity levels.

Encouraging Professional Growth and Development

Family offices can foster the growth and development of non-family members by offering opportunities for skill enhancement and career advancement. Implementing mentorship programs and continuous learning initiatives can help these professionals thrive. Additionally, creating structures that recognize and reward the contributions and achievements of non-family members is essential for motivation and retention.

A competency model can be developed and utilized by HR, which sets out the specific skills, knowledge, and behavioral requirements necessary for employees to perform their jobs successfully. This approach eliminates the familial factor, focusing instead on performance and competency. It allows HR to more accurately identify learning and development needs and sets a clear direction for workforce performance that aligns with organizational goals and strategies.

While many family businesses are hiring for top positions, they should also consider bringing in talented individuals early in their careers and focus on helping them grow internally. This approach ensures a steady pipeline of skilled professionals who are well-versed in the company’s culture and values, contributing to long-term success.

Be the Company People Want to Work At

Source

Employees are increasingly seeking meaning in their work, and family offices can appeal to individuals' values and sense of social responsibility by aligning company values with impactful initiatives. For example, incorporating impact investment, supporting ESG efforts, and engaging with local communities can make the company’s strategy and goals more appealing. The values of family businesses can be much stronger than those of non-family businesses, which can be attractive to potential talents.

Reputation is crucial in attracting top talent. While family offices are becoming more recognized in the labor market, they are still often overshadowed by larger investment and financial firms. To compete, family offices need to raise their public profiles, expand their networks, and engage in brand-building across various communication platforms.

It is also crucial to ensure that compensation packages are competitive. Leaders can be classified into “local,” “national,” or “global” categories, with base salaries aligned with the local cost of living and yearly bonuses designed to provide a comparable saving capacity as they would have elsewhere. As many employees can now work remotely, their job options have expanded, making it necessary for family offices to remain competitive on a global scale.

Transparency is another important factor. The traditionally discrete nature of family offices often means information is kept confidential, which is understandable. However, once talent is identified, sharing as much detail as possible can help retain the right talent and deter unsuitable candidates, as the skill set required to handle various assets can differ significantly. Being open about job requirements and expectations is also vital, as transitioning from large corporations and financial institutions can be a significant culture shock for executives.

End Note

Family offices are increasingly hiring non-family talent to manage more complex portfolios. Despite the need for specialized skills, they face challenges like limited growth opportunities and low brand recognition compared to traditional finance firms.

Understanding and respecting family business culture is crucial for outside professionals. Embracing family traditions, values, and long-term vision fosters a sense of belonging. Family offices should encourage growth through mentorship, continuous learning, and competency-based models, recognizing and rewarding contributions from non-family members.

To attract top talent, family offices need to improve their public profiles, engage in brand-building, and offer competitive compensation. Transparency in job requirements and expectations helps retain suitable candidates and avoid mismatches. Aligning company values with impactful initiatives and supporting social responsibility can make family offices more appealing workplaces.

By implementing these strategies, family offices can build strong, committed teams, ensuring long-term success and preserving their legacy.