One of my first jobs in human resources was managing a college summer internship program. The main goal was to hire the interns as full-time employees upon graduation.
College internship programs are still one of the most cost-effective methods for finding key talent, especially for small-business owners. However, in the advisory industry, interns are still an underutilized resource.
According to the InvestmentNews/Moss Adams 2011 Adviser Compensation & Staffing Study, just 43% of firms surveyed employed college interns. The main barrier or excuse I hear from financial advisers to hiring an intern is: “I don't have time to train an inexperienced person.”
I encourage advisers to think of an internship program as a long-term relationship, with the ultimate goal of hiring the intern for a full-time position upon graduation. If hiring an intern is a way of getting work done over a short period of time — say, two to three months — a firm may be better off hiring a temporary employee through an employment agency.
Having this long-term mindset of hiring an intern as a full-time employee will make the time and effort to recruit and train well worth it. This is a perfect win-win situation: The intern gets to try out the firm, and the firm gets to try out the intern without making a full-time hiring commitment.
All of us have made a bad hire in our careers and we all know the high price paid when that happens.
According to a study by CareerBuilder, 69% of employers surveyed reported that their companies have been adversely affected by a bad hire this year, with 41% of those businesses estimating the cost to be more than $25,000, and 24% saying that a bad hire cost them more than $50,000.
Impact of a bad hire
Lost productivity, lost time to train and recruit a replacement and negative impact on employees and clients all add up and can affect the bottom line. So an internship program can become a very cost-effective way to recruit full-time talent.
Where can qualified intern candidates be found?
For many firms, internship postings on college campuses and the company's own website are the best resources. Generation Y professionals are very social-media driven, so making sure that the information about interning opportunities and entry-level positions is on the website is a must.
If possible, recruit from one of the programs registered with the Certified Financial Planner Board of Standards Inc., as these programs specifically train students for careers in the advisory industry and have recruiting programs to help connect firms with students.
Many firms have been successful at establishing relationships with local universities and alumni organizations. To maximize exposure to the top students, establish a relationship with the faculty, attend career fairs, get involved with student clubs/organizations and, if time allows, become a guest lecturer.
These types of activities, over time, will establish a firm as a viable career choice when students are looking for a job.
To attract top students, make sure there is a meaningful role for them. Interns can help to free up capacity so employees can focus on other important roles and responsibilities.The most common intern duties, according to the InvestmentNews/Moss Adams study, included clerical work (75%) and data gathering (66%), but advisers are also involving them in preparing for client meetings (48%) and reporting (30%).
Some advisers are including interns in client meetings (17%), but they are careful to ensure that the intern's role in the meeting is communicated clearly both to the intern and to the client. Although it is encouraging to see some firms expand interns' roles, the industry can definitely do a better job in creating meaningful internship assignments.
It also is important to set goals and objectives for interns. I highly encourage advisers to make the internship a paid position. Eighty-eight percent of firms surveyed in the InvestmentNews/Moss Adams study paid interns an average hourly rate of $13.50.
Finally, giving students exposure to the industry through an internship is a great way for an adviser and firm to give back to the industry. Having real work experience is an important part of career development and building one's résumé.
Advisers will be helping to train the next generation of leaders who will carry on the tradition of providing independent advice.
Kelli Cruz (kelli@pepinconsulting.com) is managing director of Pepin Consulting.
