…and why Family Offices are being non-inclusive in a bid to well, be inclusive.
In the UK, asking about relationships, dependents or cultural origin during the recruitment process is forbidden. There is a general view that anything thought to stand in the way of progressive equality should be eradicated from the recruitment process which is why asking about children, sexuality or physical ability when not relevant to the requirements of the role is a no-go. And rightfully so.
The conversation stretches to compensation too. In parts of America, it is illegal to ask about current compensation because in the same way a person should not be judged upon their appearance or outside-of-work interests, they should not be valued on the worth of a former employer. It is for this reason that from April 2022, New York based organisations will also have to clearly advertise the salary they are offering for a role in order to not mislead or undervalue prospective employees.
In Family Offices however, anything goes and while no entity or person is above the law, there is a very blurry line that stands between Cultural Fit and outright discrimination.
Looking at the affluent Royal Family in the Kingdom of Saudi Arabia as an example and due to cultural and religious reasons, a chaperone hired to escort a Prince during his world travels must be male. Similarly, when thinking to an elderly female Principal who lives alone and seeks a Personal Assistant (and confidant), the hire must be female.
Both of these examples would be frowned upon and outright disallowed in the corporate world but in the world of Family Offices, they are non-negotiable and understandably so.
Age is also a consideration. Longevity is one of the most important qualities in a prospective Family Office hire. Principals need to know that the team they are building and entrusting with their assets and family secrets will still be there in years to come. They will be loyal and understand both the family and its office as if it was their own. As a result, people risk is high and Family Offices will do everything they can to retain the right person. That does however mean ensuring to hire the right person, the first time.
This means that a search for a new candidate can often come with an age limit and while this might lean towards the discrimination end of the blurry spectrum, if a requirement of this role is to travel to the French Alps three times a year to hike and ski with the Principal – age, ability and fitness levels all have to play a part in the conversation about the perfect cultural fit.
There are many idiosyncrasies that separate Family Offices from the ordinary and gender and age are just two pillars. Language and ethnic culture also make a strong appearance and it is mostly due to the origin of the wealth creator. If a Russian Principal only wants to work with Russian natives to achieve the perfect cultural fit, who are we to question it? Similarly, if a Family Office in London is led by a Principal who only speaks Hebrew, is it discriminatory to only hire those who can speak the same language or understand the cultural quirks that they bring?
These are not 100+ employee organisations where government quotas apply. These are five-person teams who work within a collegiate culture, most often in the home of the Principal that leads them. Cultural Fit is everything and sometimes fitting in with the culture means sharing ideologies and belief systems that would otherwise be irrelevant or at least, strictly ignored.
But is this all changing and, if it is, is it changing for the better?
Diversity as a topic might not have had the same ripple effect in the Family Office community as it did in the corporate world but it is certainly making its re-emergence as one of 17 Sustainable Development Goals outlined by the UN. As Social Impact reaches the top of almost every Principal’s priority list, diversity and most importantly, inclusion are becoming hot topics in Family Offices. It isn’t making the recruitment process easy however.
To offer another example for the Middle East, due to their proximity to Asia and distance from European or American financial centres, the majority of talent from outside of their own communities derive from India which is home to some of the world’s most extraordinary talent. This means that often, Family Offices in the Middle East are made of more than 90% Indian-born professionals which can again limit their diversity.
We were elected recently to try and diversify a majority-Asian talent pool in a Middle Eastern Family Office but in their bid to be inclusive, they ended up rejecting dozens of extremely qualified candidates of Asian descent being both discriminatory and ironically, non-inclusive.
It is this exact dilemma that often creates a further barrier to inclusivity and the Middle East is not alone. Family Offices, wherever they are located, are entities that exist to manage the assets of an individual or sometimes, multiple families. A new hire can often feel like introducing a new member to the family, it is both delicate and uniquely personal and vital that their personality is aligned with that of the Principal. In fact, this is more important than any skill-set, competency or education but while a corporate human resources leader might require a tangible reason for rejecting a candidate, Family Office Leaders can simply dislike a personality. Is this discrimination or imperative to achieving cultural fit?
When hiring for your Family Office you need to think Family first and Office second. Can this person take your husband to hospital appointments? Can they jump on a plane without notice to manage your international holdings? Can they watch your daughters recital if you are stuck at work or if you can’t make it in, can they take your seat at the table?
In the world of Family Offices, anything is possible and the professionals hired to do the unthinkable have to be problem solvers, agile and absolutely committed to the cause. Most of the time, that comes above everything else. Diversity included.