The revenue a new hire promises can seduce a hiring manager. For instance, that two million dollars in promised revenue may come from foreign exchange trading– but your firm does not do that type of business. If the manager doesn’t do the homework to find out the source of that revenue, the promises often turn out to be empty.
Especially in today’s regulatory climate, no one wants to hire individuals with criminal records or questionable past histories. The same degree of due diligence must also apply to your clients. In the small world of high-net-worth investors, your customers help shape your brand and your reputation. Know not only your own staff but also your client base: to whom they lend, with whom and where they do business. Learn about their past history. Due diligence and proper assessment protect your brand.
Bringing over talent that has had success
elsewhere entails a great deal of risk. The current model dictates that a new
hire is paid one-and-a-half times the highest amount they’ve ever been paid per
year. This means that even in the best case scenario the new hire is not going
to turn a profit for your firm before year three of the contract. When new
talent is brought in there tends to be glowing promises of large revenues
generated, and senior management gets to check the box that they’ve brought in
a major rainmaker. But this new hire is like an athlete on a long contract –
they don’t perform at the top of their game until the last year of the deal.
A new free agent is hired and for a time a great
deal of attention is paid to the new star. Then an even newer hire is brought
in and attention shifts to the new kid on the block. This can create jealousy
and morale problems. New hires may also engage in untrustworthy behaviors like
stealing leads or they may receive opportunities that more established
salespeople feel are rightly theirs. Don’t downplay the chemistry problems.
Treat your sales force like champion racehorses – they need to be stroked
The danger of being enamored with the new at the
expense of the old certainly applies to your internal sales staff. A shiny new
hire may attract attention at the expense of a reliable employee who has
survived life in the trenches and proven his or her loyalty and acumen. The
danger of becoming overly enamored with the new also applies to clients. As
your business grows, you will get better at attracting bigger clients and may
lose smaller clients. That can be very healthy but if you lose the wrong small
clients, those which are influential or who have other benefits, this can cause
serious problems in the marketplace and for your brand.