Christina Staples is a Director at Deloitte in the UK, and leads the firm’s Family Office Community. She manages a distinctive peer network designed exclusively for senior executives of Single Family Offices. The programme offers members access to topic-specific events on the key challenges impacting family offices and their families, a closed and confidential forum to discuss family office issues, updates and insights on relevant market trends, and access to Deloitte subject matter experts.
What particular challenges do family offices face in recruitment?
Christina Staples: Family offices are continuing to increase in popularity as a vehicle to manage the affairs of wealthy families. This is naturally exacerbating the war for specialist talent. Combine this with the increased hiring of investment and private client professionals in the financial and professional services industries, and you can see how it has very much become a “candidate’s market”.
As a result, family offices are having to work harder than ever to make themselves attractive to potential candidates, who are becoming more selective with who they want to work for, how they want to work and how they want to be remunerated, with the focus moving away from cash towards longer-term alignment and having an element of “skin in the game”.
With compensation and benefits being a family office’s greatest expenditure (around 50-70% of its annual budget), it is important that they get it right.
Where should family offices start in the search for top talent?
Christina Staples: The first step is to consider exactly what kind of family office is being recruited into, what kind of role the executive is expected to fulfil and most importantly what culture the family are seeking to create.
The market for talent is broad, ranging from investment firms to banking to professional services companies. Historically, family offices have used their trusted network as the preferred recruitment pool. This has worked to date, but as families increasingly seek to professionalise their operations, their focus must also move to a wider audience of professionals who can drive towards fulfilling the families’ objectives.
What can families do to improve their chances?
Christina Staples: Thinking laterally about their Employee Value Proposition (EVP) – essentially what being part of the organisation represents - can be a great way for family offices to differentiate themselves from the competition, particularly the more traditional investment firms.
A family office role is, after all, unlike any other. It not only offers an array of responsibilities (from wealth manager, gate-keeper and trusted advisor, to board member, trustee, and next gen educator) but it also requires individuals to operate almost as an extension of the family itself - privy to details about their wealth, their ambitions, their priorities and their values.
Family office executives will be exposed to the way the family operates, how it makes decisions and even to the tensions and differences that might exist between individual family members. However, the sense of fulfilment and validation a family office role can provide once the family’s trust is gained could be more attractive to the right candidate than the most competitive compensation package on the market.
Families are also recognising the appeal of aligning executives’ interests with the family’s or that of its operating businesses. For example, long term incentive plans (LTIPs), which seek to link executive reward with the family’s long-term value creation strategy, are becoming an ever more important part of the package. Such incentives, if well designed, can provide a meaningful way of aligning the family and executives, but need careful planning and implementation to ensure that they pay out in the right scenarios and do not drive unintentional behaviours.
Some of the more creative examples of non-financial incentives have included charitable opportunities, a day of leave each week for self-improvement (e.g. to learn a new language) and even choosing a book each month to add to the family library. Such strategies can not only enhance the alignment of interests but can also forge a closer spirit of engagement between the family and the family office executives.
Are any new roles emerging in the family office?
Christina Staples: Family office in-house teams are generally remaining lean with typical positions including CEOs, CFOs and CIOs, working alongside external advisors, analysts and investment managers. However, many family offices are now adding a Chief Technology Officer (CTO) due to the expanded role and integration of technology. The reliance on virtual meetings, cloud-based data storage and integrated accounting systems is now commonplace in the day-to-day operations of many family offices.
Wealthy families and their family offices also remain attractive targets for cyber attackers, with phishing emails the most common form of attack. Family offices are waking up to the importance of implementing strategic controls to effectively minimise the family office’s exposure to cyber threats. In many cases, the role of the CTO is instrumental to this.
About Christina Staples
Christina Staples is a Director within Deloitte in the UK and leads the firm’s Family Office Community - a distinctive peer network designed exclusively for senior executives of Single Family Offices. The programme offers members access to topic-specific events on the key challenges impacting family offices and their families; a closed and confidential forum to discuss family office issues; updates and insights on relevant market trends; and access to Deloitte subject matter experts.
Disclaimer
This article has been written in general terms and we recommend that you obtain professional advice before acting or refraining from action on any of its contents. Deloitte LLP accepts no liability for any loss occasioned to any person acting or refraining from action as a result of any material in this article. © 2021 Deloitte LLP. All rights reserved
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