The lack of sufficient talent currently entering the financial planning profession is undeniable. This talent shortage can cause immense frustration among firms attempting to build a solid pipeline of qualified candidates to select from when they need to add a financial planner to their organization.

Due to these challenges, paired with increased efficiency and effectiveness of technology, some firms are rethinking their hiring strategy entirely by embracing remote/virtual hires versus strictly in-house hires.

If a firm decides to go the virtual employee route, here are some potential challenges, and tips to overcome them:

Technology and Infrastructure

Potential challenge –Firms sometimes try to rely too heavily on their new hires to ‘fix’ all the technology woes they may be experiencing, whether it’s figuring out how to start using technology the firm has struggled to adopt, or figure out how to replace legacy technology the firm is overdue to replace.  Yet the reality is that if your new hire does not have all the necessary tools to succeed in a remote environment, because of your technology hiccups and lack of internal systems, it will be very difficult for that new hire to meet and exceed your expectations. In other words, new hires deserve to have the technology they need to succeed… not just be the “fixers” for the technology the firm lacks.

Tip – Make sure you have a clear vision for your own technology needs, and understand when it might be time to move on from something that is only working okay for you. Hire a technology consultant (not a next generation employee) if you need help with your technology and your existing team members don’t have the skill set to help. At minimum, you need these prior to hiring someone remotely: cloud-based file storage, CRM, project management tools such as Basecamp or Teamwork, and some type of video/web conferencing program.

Items to contemplate further – Do you want to start building out a satellite office structure to increase your national footprint, or is this a strictly work from home opportunity for a few team members? Depending on your answer, you might need to secure executive office, or some type of co-working space. Also, strive to have a documented process for every internal and external activity that is associated with your business model. For the activities that involve client touches, ensure they are detailed enough that anyone on your team could run with even if it isn’t “their job”, but not too rigid that eliminates thought and customization.

Candidate Characteristics

Potential challenge – While still relatively small, the pool for candidates interested and available for remote positions could be as much as 10x the options for a normal in-office position (where a candidate might have to relocate). This seems like it could be the answer to all your prayers, as most firms tend to think the more candidates they see the better off they are. But firms can quickly find themselves overwhelmed by the volume, and uncertain which candidates will really “deliver” and work effectively from a remote position.  Be sure you are ready for the onslaught of “qualified” applications you might receive, all stating that they are ‘detailed’, ‘efficient’, ‘process oriented’, ‘deadline driven’, ‘multitasker, ‘self starters’, etc., and be ready to try to suss out who will really be successful working remotely for your firm.

Tip – Develop a job description that has very narrow and specific parameters for what you do need, so candidates can self-select out. For example, having a flexible schedule but requiring certain hours to eliminate stay at home parents who might be looking for a part time gig while their children sleep, versus the full time 100% committed person you are seeking.  Also, consider having candidates answer a short pre-screen questionnaire asking detailed questions about prior remote work experience. For instance: Give us examples of your projects and deadlines you had to meet?; What was the style of your last manager? What worked? What didn’t work?; How long have you worked remotely?; Do you currently have a home office set up for remote work?; Give us an overview of your current tech system? (The protocol here is to supply your team member with whatever they need to be successful, however this question will help you gauge their tech knowledge on the front end). Finally, ensure you have some sort of applicant tracking system and provide instructions for candidates to do something beyond only submitting a resume. This might seem a little forward, but you could instruct them to send along a picture of their work space, to easily rule out the candidates who cannot follow simple instructions. During the interview process, pay close attention to candidate’s phone and video presence as they should be well above average in clarity, inflection, tone, body language queues, and overall awareness, to be successful in a remote position (especially if it will also be client-facing).

Items to contemplate further – Should this person be hired as a 1099 contractor or W2 employee? Some aggressive firms look to hire virtual employees as 1099’s to avoid paying payroll taxes; however, the DOL has established guidelines firms must follow regarding employee classification (including virtual employees).  Basically, if the person you have hired is not in business for themselves to realize a profit or loss, they are likely an employee… even if they are virtual.  If this doesn’t work for you, consider outsourced planning services such as Sue Chesney’s Delegated Planning, among others that are true 1099 contractors.

Firm Management

• Potential challenge – While there are some very good managers, many firm owners are not highly skilled managers, and may never have aspired to be in the first place. They have been able to grow their firms by hiring outside professional management, which usually makes sense around the $2M/year revenue mark. Planning around management is important, because managing people effectively in an in-person situation is difficult enough, and managing team members remotely is substantially more difficult. So do realize this might not be the best solution for you if you have no desire to develop the skills necessary, and/or are not yet ready to hire professional management to help. Also, keep in mind having a remote opportunity is a great aspect of the job opportunity, but it is only one aspect.  You still need to be diligent about develop opportunities for career growth, challenging responsibilities, and engagement with your current team. Find ways to include them in client meetings, even those that are held in person. Several of our clients all meet up several times per year, and others fly their remote workers to HQ routinely for training and camaraderie, because without a solid foundation of connectedness, remote employees will find new opportunities or won’t be efficient.

Tip – Only attempt to develop these management skills if you desire them, because you are going to have to change yourself… which may not be very appealing depending on where you are in your career! Changing your identity from successful planner to manager is tough for many experienced advisors, as it requires changes to your own attitudes, values, and especially communication style.  Individuals that I have seen make this switch successfully went from a ‘I have to take care of my clients well so they don’t leave’ mindset to a ‘I am responsible for this entire organization and the people within it are relying on me for their livelihoods and I have to take care of them so well so they don’t leave’ mindset.

We hope these will help when deciding whether to hire in house or remotely, especially since the margin for error on these types of hires is much lower than someone that sits down the hall from you and the rest of your team each day. Follow these guidelines to reduce the likelihood of a very expensive hiccup, and hopefully making a solid (remote) team member hire!