But, regardless of its efficacy, this means that consultants naturally gravitate towards High Net Worth (HNW) placements over time. Establishing yourself as a talent manager for HNW individuals is a fairly common ‘endgame scenario’ for a career in recruitment. The question is: should it be?
Who is a High Net Worth Individual?
First of all, how do you define a ‘High Net Worth Individual’ (HNWI)?
HNWI is a customer classification that the financial services industry uses to identify households with assets of £750,000 or above. It has since been adopted across other industries as a useful metric for all sorts of situations – including within recruiting.
A HNW candidate typically starts the hiring process with greater leverage. They are already likely to be earning a high income (hence the status). And they are likely to feel less financial pressure to accept an unappealing salary offer when it is tabled. In short, recruiting high net worth individuals can be a complex matter.
The Challenges of recruiting High Net Worth individuals
Of course, if it was easy, then everybody would be doing it. But there are sufficient obstacles to convince many agencies that HNW recruitment simply is not for them. Some of the usual suspects are:
- Limited Candidate Pool
- Time on the Market
- Longer Times to Hired
- Additional Costs
Let’s take a look at each, and see how the experts address the issues.
Limited Candidate Pool
The most obvious challenge when recruiting HNWI is the limited pool of talent. There were 573,000 in the United Kingdom according to the Capgemini World Health Report 2021. That is not a vast number of total candidates – especially when you consider how fiercely your competitors are already fighting over them.
Secondly, the pool appears to be shrinking. The UK had 591,000 HNWI in 2019. This amounts to a yearly decline of exactly 3 per cent (3%). Although some sources have estimated that wealth became concentrated towards the top during the pandemic, it is unclear whether the number of HNWI has increased or declined. A continuation of the downward trend would only intensify the competition.
But there is also the fact that many HNWI are not even jobseekers. Many are retired and enjoying their assets; others may themselves be business owners. The number of HNW individuals available for recruiting – either actively or passively – is therefore significantly below that overall figure.
As such, HNW individuals may not be familiar with a typical recruitment process. It means that recruiting high net worth individuals may require additional levels of nurturing and time commitment. But simply finding a prospect can be a challenge in and of itself. How can you make candidate acquisition and attraction a little easier?
In this respect recruiters can borrow many of the lessons already learned by investment fund managers.
The article gives several options that we will look at here – including using tech to streamline your business, and focusing your targeting and acquisition. But one additional point raised is the inherent value of social proof and word of mouth. An effective referral scheme can provide you with a closer network – a degree of trust comes with the endorsement from a previously happy client.
Time on the market
Attracting talent takes time – but the harsh truth is that it is time that most agencies simply will not have. The top candidates only remain on the jobs market for ten days on average. This makes the window of opportunity between first interaction, engagement, and placement incredibly tight.
If you are looking into making HNWI placements, then you have to build a process that allows for a high drop-off rate. Of course, technology can help – to smooth interactions and to speed up key tasks. Nevertheless, the road to HNW recruitment is beset with other challenges.
Longer Times to Hired
As a (very general) rule, the hiring process for HNWI is substantially greater than a typical placement. This alone can make HNWI recruiting prohibitively costly for many agencies. There is a lot of work to be done, and a lot of time goes by with potentially no revenue generated. Can your current operations sustain this type of activity?
If your HNW recruiting starts to feel like a roll of the dice where you are staking your the future of your business, it may not be the right time to proceed.
High Net Worth individuals can also require additional investments on behalf of their talent agent of choice. These can range from extra hospitality; increased time spent on nurturing and engagement; to additional security and privacy allowances.
An example? Do not be surprised if your client (the employer) or your candidate themselves requests a non-disclosure agreement (NDA) at the start of the process. This can protect employers from salary pressure when it is known which talent they are targeting. It can protect your candidate as they transition from one high profile position to the next.
An NDA for HNWI candidates need not cost an arm and a leg – though it is an additional expense. And it is one that you may not have encountered up until this point. Several legal self-service sites exist online, including Docular – which has a number of NDA for HNWI candidates and other circumstances.
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