Asset management is a business built on the talent of the people who do it, and creating an environment that attracts and retains the best available people is one of the most important roles of the people who manage the businesses.
But the Fiduciary Investor Symposium in Healesville earlier this month heard that while a business has to offer an attractive working environment to appeal to the right people, what really makes an employer attractive is the challenge the work presents and being clear on what is expected of people.
Perpetual chief executive Rob Adams told the symposium that the people issue is “what you wake up thinking about, it’s what you go to bed thinking about”.
“Our business doesn’t create widgets, it’s entirely people-oriented,” Adams said.
“And yes, we use systems, but they’re just a component part. The assets of the business are our people and that’s across every single function, whether it be the management of money, client relationships, the technical side, operational side.”
Adams said employment costs are about 75 per cent of Perpetual’s cost-base, and his role as the leader of the business is firstly to attract the best talent, but also to develop and retain it.
“It’s the product that we produce,” Adams said. “There’s always been competition for the very, very, very best talent, and the environment that you that you create, to attract and retain that talent, is your job as a manager. So it’s everything.”
Adams said that from the perspective of attracting and retaining investment professionals it’s important to remember that first and foremost “your money managers want to run money”.
“The rest of what occurs in the business is effectively noise,” he said.
“It’s necessary noise and it’s important noise because we’ve got to be able to deliver product to our investors. But investment professionals want to be fully focused on the thing that they love. And that’s running money.
“And I think it’s incumbent upon us as business managers to create that environment where they can have confidence and trust that they can be fully focused on running money and the necessary and important engagement with their clients.”
UniSuper chief investment officer John Pearce said hiring people is ultimately about who’s best for the role, and attracting the best talent doesn’t mean bending over backwards to accommodate their every demand.
“We got to still come back to what is what is really important and what shouldn’t change,” Pearce said.
“We talk about things here, new requirements, such as work-life balance etc, but really, if you’ve got a 25-year-old, late 20s, whatever, a single person, coming in [to] an interview and saying work-life balance is a huge priority for me, is that really the person you want joining the investments team?
“You can’t say it in the interview, but just rule it out. Let’s cross it out, because they’re going to let the team down.”
Pearce said the right people aren’t only those with great academic results, “because everyone in Australia has got pretty high levels of education”. What’s more important, to UniSuper at least, is “passion and attitude” towards the work.
“They’ve got to be prepared, they’ve got to be passionate about investing money,” Pearce said. “That’s to me far more important.
“It’s not about you get all this leave for that, and you’re allowed to wear red hats on Mondays, and all that sort of stuff. You make the rules pretty clear. We say Tuesday, Wednesday, Thursday, you’re in the office, without exception. If that doesn’t suit you, hey, we get it. We get that others allow a lot more flexibility. We get that. It’s just not us.
“And we don’t believe that the market is so tight that we can’t actually get people to do this. Whenever we advertise, we get 50, 100 people applying for jobs. What drives people is challenge.”
Adams said managing a business listed on the ASX presents additional challenges to managing an investment team inside a large profit-to-members super fund.
“We’ve seen valuations of publicly traded asset management companies come down two or three times just in the last 12 months so that creates a whole set of pressures and I think, from a people perspective, as a public company, the biggest issue for us is the impact on incentive schemes,” he said.
Adams said managing a business through an acquisition can have a significant effect on staff morale.
“Difficulties in the industry are one thing,” he said.
“But I think whenever you go through an integration, the massive downside that you’ve got to manage as quickly as you can is the uncertainty that creates.
“That absolutely creates issues for mood and environment. We need to be tuned to that, balance out between speed of decision-making and making well-informed decisions, and give people clarity and certainly as soon as you possibly can. That’s critical.”
Adams said Perpetual conducts a “mood monitor” of its staff and in the early stages of the merger with Pendal, mood was “the lowest it’s ever been, to be totally frank”.
“But that that’s to be expected,” he said. “We’re now on the improve because we’re giving people that certainly. It’s difficult, but you’ve got to get through that period as quick as you can.”
