Are your staffing levels right for your firm?

by Damian Davies on 10·09·2021

A common difficulty I am hearing from business owners is how to ensure their team is properly resourced. Too many staff and you face issues of cost inefficiency; too few and there are problems around productivity and income generation.

Of course, there is no single guideline for the right ratio of team members and clients because each firm has a unique service proposition. But cross-referencing the outcomes of the following four steps will help you determine which ratio of clients: advisers: paraplanners: support is right for your team, and therefore which parts of the business may need a bit of a tweak.

Step 1: Review your service proposition

Once you have done this, you can map exactly what time-resourcing requirements you need to deliver your service.

Most firms have more than one proposition, so repeat the exercise for each. This needs to include the services you provide when you engage with a new client.

You can also determine who in your team is responsible for which parts of the delivery. This gives you a clear indication of how much it will cost you to deliver that service. You can then ensure the fee you charge is commensurate with the service being delivered.

Finally, you need a mechanism to record how well each person does in delivering the tasks for which they are responsible.

Outcome

• A number (hours) that predicts what each team member is likely to commit to engaging a new client in each service proposition
• A number (hours) that predicts what each team member is likely to commit to servicing each client in each service proposition
• A number (percentage/score/grade) that is a target for how well each person involved in the service delivery process is doing.

Step 2: Review the management information data you record

Management information is a quick way to determine a business’s state of health.

At the very least, you should ensure everyone in your business time-records everything they do. Second, you should have a mechanism to record how well different tasks are done.

Without these, you can’t set targets for time and quality. Without targets, no one really knows how successful (or not) the team is.

Finally, you need goals for things like client retention, new-client engagement or profit per client.

Outcome

• A number (hours) that each team member actually commits to engaging a new client. This number can then be compared to the target in step one
• A number (hours) that each team member actually commits to servicing each client. This too can be compared to the target in step one
• A number (percentage/score/grade) that demonstrates how well each person involved in the service delivery process is doing in relation to their target. This number can be compared to the target in step one.

Step 3: Review existing client numbers and growth plans

This is the last piece you need to complete the puzzle.

First, you must confirm how many clients you have engaged in each proposition. Then you need to set a target for engaging new clients too.

Outcome

• A number (quantity) of clients in each proposition
• A number (quantity) of target clients for each proposition.

Step 4: Review the maths

Now you have the numbers, you can start to look at an ideal resourcing plan. You will need to ensure you break down the numbers into three parts — adviser, paraplanner and support.

Outcome

Step one minus step two will help determine whether you over- or underestimate how long it takes to engage new clients and deliver service to existing clients, and whether the team are delivering to the expected targets

• Step one times step three will give you an expected resourcing requirement
• Step two times step three will give you the actual resourcing requirement.
• This is a very simplistic guide for resourcing, but it is a great foundation for looking at the cost of delivering service against the income it generates.