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How the economy impacts recruiting

Agency leaders look at adjusting products and targeting realtors to attract new advisors.

How the economy impacts recruiting

Thomas Lee recruited 20 people into his Singapore agency in 2023, bringing the total number of advisors on his team to 75. Lee enjoys recruiting. And he understands its importance to the future of his agency. He vividly recalls his mentor sharing a well-known leadership axiom years ago: "Recruit or die." 

But Lee is also open about the challenges he faces to persuade talented people to take a chance on his team. He remembers what came to his mind 30 years ago, when that mentor first attempted to recruit him into financial services. 

“I remember choking on my coffee and thinking that if I had made a list when I was in school of all possible professions based on desirability, being an advisor would be ranked right above cleaning toilets,” he said. 

While this attitude is no doubt one that presents challenges, it’s also one that leaders have recognized and have been able to counter for a long time. Lee himself is fond of pointing out the freedom and security that come with being a long-term successful advisor. 

“If you want to achieve financial independence, why don't you do it when you are young and you have time?” he said, by way of example. “You could do all the things that you like. You can be going skiing every other month.” 

What proves more challenging to navigate are shifts in the national economy that can make financial services appear less appealing for tangible reasons. Inflation in Singapore has surged since 2021, at one point topping 7%. Even after falling somewhat, the inflation rate remains well above its pre-COVID numbers. Added to these problems are low growth projections and a very low unemployment rate, all of which influence the pool of available candidates and their willingness to consider a career in financial services. Against this backdrop, Lee’s addition of 20 new advisors takes on a greater sense of accomplishment. 

“Living expenses are very high right now,” Lee said. “Candidates feel that the insurance profession is highly unstable because we are depending on production. They feel that the policies that we sell have returns that may not keep pace with inflation.” 

Lee’s agency has tried to alleviate concerns by focusing more on the investment side of financial services. He assures recruits that comprehensive training programs for these new products are provided to all advisors, and that training will be provided should future market conditions lead to further changes in an advisor’s product portfolio.  

Additionally, Lee combats economic headwinds by offering an allowance to new advisors. This monthly compensation, coming directly from Lee's company, is granted to recruits for a specified period as long as they meet established benchmarks. 

Economic trends, however, don’t always work against leaders. Sometimes they can produce positive factors that encourage movement toward financial services. This is true right now in the United States, where the high cost of buying a house has created hard times for real estate agents. Many are turning to new forms of work to make a living. 

Jason Staas, FCIF, CLTC, of Dayton, Ohio, is among those leaders who are adding former realtors to their team ranks.

“It’s like 2007 again,” Staas said, referencing the period of the most significant U.S. housing crisis in modern times. “They're laying people off in droves — high-talent people that if I had talked to two years ago about a job, they would've said, ‘Get out of my life. I am making big money.’” 

These former realtors are a particularly strong fit for financial services, given the nature of their past profession. They are used to developing deep client relationships, and are comfortable working within production-based compensation schemes. 

For Staas, finding himself a beneficiary of economic conditions means he might alter his recruiting plans to capture more talent now. If he knows that the people currently searching for opportunities are uniquely qualified, he’ll adjust his team growth goals to accommodate as many new advisors as possible, rather than hope high-quality candidates remain available later. 

While the housing-sales crunch has certainly helped, it takes a little more for Staas to onboard talented realtors than an economic downturn alone. Some new hires came only after Staas engaged in a long-running campaign of passive interest. Similar to how advisors build slow-forming relationships with potential clients, Staas identifies potential team members up to years in advance. Then, if they become job seekers, they’re more likely to remember Staas and reach out to him. If that day never comes, it’s possible they’ll refer a similar person to Staas when that person needs a new work opportunity.  

“A lot of times recruiting seems like an uphill battle,” Staas said. “It doesn't have to be.” 

Contact: Thomas Lee thomasleecc@pruadviser.com.sg 

Jason Staas jason.staas@kofc.org