Jiggling and Differentiation - all very 2024?

Jiggling is new to me. I must admit, I first thought they hung around the South of France looking for unsuspecting women. However, it transpires that they go nowhere while you do, and herein lies the problem. What has this got to do with talent? Well, quite a lot, apparently. Mouse jigglers have been around for a long time, and certainly well before Wells Fargo dismissed a number of staff for allegedly using them. Originally, I believe they were designed to stop gamers facing a fate worse than death - being timed out of games. After spending several decades in their bedroom getting to level 457, gamers didn’t want to risk going back to square one when their Mum made them come down for dinner, and so the mouse jiggler was invented. However, they were a real post-pandemic WFH winner! With working from home becoming the norm, employers and employees at some firms entered a very sophisticated game of digital cat and mouse.

Perhaps some employers weren’t as pro-work from home as they publicly stated during the pandemic. Perhaps they’d heard enough tales in the pub of how people are flexing the work from home principle to the max, and had a lightbulb moment that this could be happening at their firm. I’ve heard plenty of tales of people who aren’t working when they should and I suspect the Wells Fargo story won’t be an isolated one. Of course, the lazy stereotype of a “slacker” is a junior member of the team, but my experience is that it’s just as likely to be a manager. Golf course usage has surged during the week since the pandemic. Clearly, it’s fair to assume that there are a small number out there pushing their luck, but my experience is that the vast majority of people are extremely conscientious and loyal. We would never use surveillance on people working from home at Fram, but I appreciate running a boutique is very different than running a large business. One of the reasons I think firms should avoid surveillance software is that it fosters bad feeling and may exasperate the problem. Empowered people will run through walls for managers (a small football analogy there in the spirit of the Euros), whereas micro-managed people look for ways to beat the system. If I worked in HR or Talent, my advice would be that where possible select people with the right values and support them to the hilt rather than trying to catch them out.

Fram has worked with asset managers since our inception in 2010, and me for much longer. As we all know, 2022 and 2023 served up a perfect storm and I think it’s sparked a debate for many leaders around scale vs differentiation. Bain highlighted both business models as likely winners in asset management, but of course many firms are in the middle ground pondering what to do next, and some firms are already in one camp and still aren’t seeing profit growth. The debate I suspect for many is this: is it better to push on for growth, hoping a broad product range helps you capture inflows regardless of conditions, or putting all resources behind winning strategies? Interestingly, in a poll Fram conducted 83% of asset management professionals said they preferred working at a differentiated player and so consensus would point to being a specialist. I also noted with real interest that Asda are now using AI to help with boardroom decisions.

Whilst many firms are some way off using AI to assist with decisions, we do see data transparency and evaluation as key to asset managers over the next 18 months. Oliver Wyman recently highlighted this point i.e. the need for asset managers to understand "good" and "bad" costs better after a difficult 2024. Too many firms are held back by legacy products and systems, and whilst of course economic changes happen quickly, the ability to capture and evaluate data will really separate the winners from losers. Chloe Tillman, who leads distribution hiring at Fram, conducted a poll where 68% of respondees said data analytics were “extremely important” in sales, marketing, and client services functions. In our experience, larger firms are more advanced in this area, but they are also bogged down with more issues stopping them from pivoting and so it could be the SME firms in the industry who benefit the fastest from investment in data analytics.

Some good news within wealth management, and more specifically family offices, where Fram has an excellent track record. According to Deloitte, 4 in 10 family offices are looking to hire?additional staff this year, with 28% shifting toward more professional (non-family) talent. 57% of wealth management professionals we surveyed feel that working for a family office is attractive. It can be a really rewarding environment to work in if you find the right family. It can also open the door to a more international career and the opportunity to learn about investing in both public and private markets, as opposed to being siloed as happens in larger firms. I’d definitely recommend speaking to a family office if one comes knocking.

Continuing with the wealth management theme, the area we feel will separate the winners from losers over the next 18 months is marketing. The industry has long relied on “referrals” to client relationship managers, but in times of lower economic growth, it’s firms with continued marketing programmes who will continue to grow. Even the best talent likes to receive leads and lead generation ability will give firms, who want to grow organically, a real head start. Hiring a high quality Head of Marketing or Growth can be transformational.

VC hiring is still going strong and just about everything seems a bit rosier than six months ago. The FTSE has also shown signs of life, which was inevitable after everyone wrote it off – that’s how one particular law works. Talking of expressions, we are of course in the midst of an election. I think all of the parties are dreadful and so it’s Hobson’s choice for me. We haven’t seen it affect hiring decisions in the slightest. I suspect rates will come down over the summer, but who knows, and whoever gets in could have a slight tailwind when it comes to employment.