At the beginning of the year, Agreus US Team Head Kay Shah launched a report focused on the differences between UK and US-based Family Offices. She explored cultural, compensation and recruitment differences while exploring the maturity of both Family Office landscapes, their taxation regimes and trends from the previous 12 months.
Having just returned to New York from six weeks spent touring America with her Family Office clients, Kay explores her five findings from the American Family Office Community and what the rest of the world can learn from them. She also has a takeaway or two for her US clients.
Read her thoughts here.
- DEMAND
Having recruited across major financial hubs across the world, I was refreshingly surprised to see the demand for the service we offer in the US. The US has the biggest concentration of HNW and UHNW clients and therefore houses some of the world’s biggest Family Offices. With high barriers to entry and their highly discrete structures, there aren’t many firms that specialises in providing human capital for Family Offices. Consequentially, Family Offices would traditionally approach the mainstream suppliers who often do not understand the nuances of working and hiring for these boutique outfits. Naturally, when we launched in the US the demand was high. But then COVID hit us all. Hard.
Though most Family Offices were relatively unscathed, most put a pause on a lot of activities and went into a ‘wait and watch’ mode. However, 2021 saw a real bounce back in activity globally, especially in the US. The ‘V’ shaped recovery in the markets and a surge in allocation in Private Equity naturally created a demand for talent not just in PE and other investments, but even more generically across other disciplines. This is a welcomed change and it’s great to see the US lead that demand for growth.
- SPEED
When I first joined Agreus to lead the New York Office, I could not believe the legislation or perhaps the lack of legislation that exists to protect employees. The four-week (sometimes longer) notice periods are hardly in existence in the USA. Instead, they mostly follow an employment-at-will doctrine determining that any employee can be terminated without pay at any given time. While this was an undoubtably terrifying initial thought, it makes for an exciting and efficient recruitment space which offers candidates the chance to interview and be onboarded into a new Family Office within weeks, sometimes even days.
I experienced this just recently in Beverly Hills. I met with a client who offered a thorough job description of a new role over lunch. By the afternoon I had sent a shortlist of candidates within my network and by the evening interviews were arranged with the top three. Over the next two days, two rounds of interviews took place and there was a verbal offer made by the third day and later, accepted.
Three-day recruitment periods simply do not exist within UK Family Offices and while I’m sure this was something of a rarity, it illustrates just how spontaneous and exciting recruitment can be in the US and how open and willing both Family Office clients and candidates are to explore new opportunities and of course, new people.
- SALARIES AND BENEFITS
While I have always known from our Compensation Benchmark Reports that compensation varies massively in the US and the UK, something that my recent tour of the US has taught me is the state-by-state comparisons.
California for instance is considered to have stricter labor laws than anywhere else in America. For example, it has a 40 hour working week and all employees working over this are entitled to overtime. Yet, only companies with 50 or more employees are expected to follow additional responsibilities such as the Affordable Care Act.
Minimum wage differs on a state-by-state basis too. While the Fair Labor Standards Act of 1938 required a federal minimum wage of $7.25, 28 states offer a much higher wage causing quite the disparity. The Family Office landscape reflects this too with state taxes alone driving Family Office investment and compensation decisions.
- SOCIAL RECRUITMENT… (and investigation)
US-based Family Offices are far more likely to recruit via social media platforms than those in the UK.
Be it via LinkedIn, Twitter or Clubhouse (on a spectrum of likeliness) Family Offices are heading to social media and so is the top talent. Whether it is due to the size or age of the UK Family Office community or its general hesitation to use social media for work, UK Family Offices tend to rely heavily on their existing networks to find talent while in the US, Family Office candidates tend to rely on LinkedIn mostly to find their next opportunity and it does not disappoint. This is not surprising considering where LinkedIn was originally founded and that there are proportionally more Americans registered with LinkedIn than Brits.
In the six weeks I spent touring the US with my Family Office clients, 60% of my successfully placed candidates came from LinkedIn, 70% of which were existing candidates within my network. With more than 750,000,000 candidates on LinkedIn alone, it has never been more important to use a trusted recruiter to help you narrow down the pool, start the communication and most importantly, separate mediocre profiles from excellent. Social media can be a powerful networking tool, but it needs to be navigated by an expert.
It isn’t just a great recruitment tool either but a vetting instrument used by Family Offices in the states to study their prospective candidates. I’m not sure it’s a bad thing either.
While Family Offices have always been incredibly diligent when expanding their Family Office Team, my US clients are far more likely to explore a potential employee’s social platforms to look for red flags than those in the UK.
From inappropriate profile pictures to oversharing information, with social media a keyhole into the lives of an employee – it offers an honest or at least transparent glimpse into a person’s personality, interests and emotional intelligence. With discretion at the heart of Family Office values, it could be a practice worth exploring for UK Family Offices and for candidates, it teaches an important lesson.
While it is always prudent to ensure you have a professional profile on any platform that you may be visible, it is also vital that your online career platforms such as LinkedIn both complement and support your CV. This means ensuring your dates are exact and your titles remain the same. We often advise candidates to tailor their CV to match the requirements of the role, meaning for instance, if you were previously hired for an Executive Assistant position with an element of travel and are applying for a similar role with a focus on travel, you can emphasise similar responsibilities. You must however ensure when putting forward your most relevant experiences that they correlate with your online presence. Something my US candidate network are well-rehearsed in.
- THE COUNTRY THAT NEVER SLEEPS
While corporations move to adopt flexible working policy in a post-pandemic world, Family Offices are doing the exact opposite. Especially in the states.
Agreus was recently featured in Forbes discussing a global Family Office call to return to the office with requests rejected for home-working and candidates seeking a move outside of the community to facilitate a work/life balance but while Family Offices in the UK seem open to at least trialling a more flexible working arrangement, many in the US are strictly against it. It isn’t just about where you work either but for how long.
The US spans 6 time zones and this means I receive emails and phone calls anywhere from 8am to midnight Eastern time. I have investment professionals and Principals in California starting their day from 6am or even earlier and ending between 12 and 16 hours later. While any and every professional is willing to work when required on occasion, it seems for Family Office Leaders in the states, it’s the norm and it might be worth thinking towards a more flexible arrangement to retain your Family Office employees for the long-term.
From spontaneous recruitment processes to using social media as a sourcing and vetting instrument, US Family Offices are more sophisticated, open-minded and energetic in their recruitment processes than anywhere else in the world and it certainly makes life as a Family Office Recruiter in the states, very interesting.
Have you encountered any regional or geographical differences?