Attracting and Retaining Talent in Family Offices

According to the Botoff findings, 75% of family offices budgeted for or approved executive salary increases of 5% or more for 2023, while 80% planned the same boost for staff — levels that outpace the overall U.S. market.

And with many states and municipalities passing legislation requiring pay transparency, job candidates expect organizations to provide greater visibility into the full spectrum of pay practices. Such openness may pay off for both parties: 82% of workers are more likely to apply for a job that lists the pay range in the job posting; 70% of organizations that list pay ranges say it’s led to more applicants; and 65% say pay transparency makes them more competitive in attracting top talent, according to research by the Society for Human Resource Management.

Remote and hybrid work arrangements are no longer temporary, pandemic-inspired responses. “What’s non-negotiable now — and what used to be a perk — is flexibility,” Flanagan says.

More than 75% of family offices have adopted an optional or hybrid work approach, with a mix of in-office and work-from-home schedules, the Botoff data shows.

Personalized employee benefits that emphasize choice, such as those tailored to different age groups, life stages or employee interests, can also help set family offices apart as employers that are able to customize rewards much more nimbly than others. “The key is understanding what your employees value most,” Flanagan says.

Flanagan cites a family office that created a program named after the Dr. Seuss character Thing One. The organization sets a budget devoted to employees discovering “what lights them up — whatever their Thing One may be,” she says. One employee used the funds to take a woodworking class. Another asked for the afternoon off once a quarter to serve on a nonprofit board. This creative benefit program honors each employee’s unique interests and personal development.

Another more frequent practice? At least once a year, family offices share a detailed statement with employees that outlines the full value of the total rewards package they enjoy: “It’s a great reminder of all the reasons to stay,” Flanagan says.

Reliance on LTIs is increasing, with nearly 60% of family offices using one or more LTI vehicles, according to the Botoff report.

Whether they’re using deferred incentives, co-investment opportunities or carried interest, family offices are tying retention-focused LTI plans to long-term goals and performance drivers. They’re also extending the reach beyond top leadership to other critical roles, Flanagan notes. Sequencing cash payouts to encourage employees to stay results in a program that works less like a bonus plan and more like an equity plan.

“The biggest line-item expense on every family office’s budget is compensation and benefits,” Flanagan notes. “Success is all about giving these crucial elements the time, attention and resources they deserve.”