What a big investment – and risk – it is for a small firm to hire a new member of the staff. The effectiveness and success of the firm’s operation depends so much on who is doing the work and how the work is done. With a small staff, duties are often broad and a mistake in hiring can be hard to overcome. What your firm may want or need in an employee – loyalty, trust, self-starter, quick learner, communicative, perhaps entrepreneurial – may be hard to test for in a candidate. Equally so, what your firm may not really desire in an employee – lack of initiative, clock watcher, sense of entitlement, inability to think – may be equally difficult to ascertain in a applicant for employment.
There are some things that can help, though, such as using a general personality test (e.g., Myers-Briggs, Minnesota Multiphasic Personality Inventory), tests of skills related to the specific job functions hired for, or a background or credit check. Naturally, checking a candidate’s references and conducting more than one interview can be very helpful. Here it is important to ask the right questions of a candidate and his or her references to get a sense of the person, what they have accomplished in the workplace and what they might bring to your firm. Having more than one interview can help develop a better sense of a person than a single, often stressful interview.
Hiring in investment adviser firms of any size should not be taken lightly or done in a hurry. It is much easier to make a decision not to hire than to be forced to fire a mistake and clean up after it.