If you’re a solo practitioner looking to hire your first employee, you’re no doubt asking yourself: “How do I hire an honest employee?”
If you’ve hired employees in the past, you also know finding one honest employee is no guarantee of hiring another. But you must keep searching for people with integrity, because hiring an unethical or criminal employee can seriously damage your firm.
Unfortunately, there will always be people who view your client base and office as a personal invitation to steal. There's no point bemoaning this. But what you can do is protect yourself: Carefully recruit and select new employees, using every tool possible to deter unethical and larcenous conduct.
The investment you make in hiring honest employees will literally pay for itself. You’ll have fewer client complaints, arbitration settlements, or regulatory enforcement actions. Even more important, you’ll have a lower risk of experiencing client lawsuits and errors-and-omissions insurance claims. And since time is money, not having to clean up after problem employees is a welcome bonus.
But here's the rub. Dishonest employees don’t just cost hard dollars... they also do irreparable harm to a financial advisor’s reputation. When employee crime becomes news, potential customers will hear about it on the Internet. Why would they choose a tarnished firm when so many other advisors are a Google search away?
Solution? Protect your reputation by only hiring the best, most honest employees. This means you'll need to integrate ethics/honesty screening into every step of your hiring process.
What to do
- Be clear about the type of employee you want to hire. Ahead of time, write out a detailed profile of the desired attitudes, skills, and moral values you’re looking for. Then during the hiring process, don’t settle for anything less than your ideal candidate. Most importantly, listen to your “gut.” If a candidate feels wrong, terminate the process immediately.
- In your help-wanted announcements, make clear your firm believes in ethical business practices. Integrate phrases from your Core Values Statement (if any) in your job postings. Then state that you are looking for candidates who share your beliefs. Also point out that you will be conducting full background checks and drug screens on all candidates.
- Go over the submitted resumes. Winnow out clearly unqualified people. But also look for ethical red flags: unusual career transitions, decreasing accountabilities, and long, unexplained periods between jobs. Also look for job titles and accountabilities that seem out of proportion to the candidate’s training and experience. Conversely, people who have been entrusted with large projects and budgets and many employees to supervise have shown they are trustworthy.
- After you screen out inappropriate candidates, only those who generally fit with your requirements will remain. Invite a manageable number in for interviews.
Next page: application review and screening questions
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