Employee Experience Insights from the 2020 Global Advisor Study
-
High-retention firms were more likely than low-retention firms to offer educational and occupational benefits, supporting a culture of continuous learning.
-
About one-third of firms measured the overall employee experience, and 66% of those firms indicated that the results made an impact on the organization at large.
-
A written mission, vision, and values statement; written job descriptions; and a formal organizational chart were considered table stakes in both high- and low-retention firms.
The Dimensional 2020 Global Advisor Study aimed to shed light on the employee experience of participating firms by inviting them to complete a designated Employee Experience module. In this article, we share some noteworthy findings and overarching themes drawn from data collected in this module. The focus on human capital was particularly salient, given that total compensation often represents the single greatest expenditure for firms, averaging 47% of total revenue in the study last year. Loss of talent can mean loss of revenue, as firms in the study cited the loss of an advisor among the top three reasons for lost clients.
Our analysis compared high-retention firms, which averaged a 1% loss in total headcount, to low-retention firms, which averaged an 18% loss, in areas including employee and leadership development, measurement of the employee experience, and the use of tools and resources to influence the overall experience.
The Business
Regarding employee benefits, a few themes emerged that distinguished high-retention firms from low-retention firms. High-retention firms were more likely to offer the following benefits to employees:
- Cell phone benefits
- Community service day
- Sabbatical
- Parental/caregiver leave
In addition, high-retention firms appeared to develop a more comprehensive culture of continuous learning through their occupational benefits. High-retention firms more often offered reimbursement or cost coverage for the following educational benefits:
- Continuing education
- Industry conference attendance
- Licensing and professional designations
- Online courses
A key consideration is determining the value employees derive from the benefits firms offer. Firms that have a clear employee feedback process may be better able to provide benefits that have the greatest impact on their employees and, correspondingly, to the firm at large.
Beyond employee benefits, an emerging trend was a focus on diversity and inclusion (D&I) programs. In all, 4% of firms that completed the Employee Experience module responded that they had an active D&I program, with a focus on recruiting, establishing a dedicated committee, and creating specific events to help drive this initiative.
Firms remained focused on their culture and how it could attract and keep talent. When asked about top activities for cultivating culture and team engagement, responses ranged from “including the team in strategic planning” to “giving team members . . . authority to determine how they work together as long as the work gets done.”
Lastly, a topic of increasing importance was the physical workspace. The Dimensional study, conducted in late spring 2020, indicated that 55% of respondents had moved or modified to better meet the needs of employees in the last three years, including adding total square footage, increasing the number of conference rooms and private space, and providing standup desks.
Employee Engagement
Critical to an open dialogue between employees and the firm is assessing employee engagement. In the study, 33% of firms measured the overall employee experience, and certain trends arose from high- vs. low-retention firms.
High-retention firms were more inclined than low-retention firms to measure culture and values, confidence in leadership, and benefits. The employee feedback that firms receive can allow them to assess overall employee engagement and aid in making adjustments to improve overall engagement. Also of note, 60% of high-retention firms received feedback from employees in an anonymous manner, allowing employees to freely provide their thoughts about the organization.
Lastly, of those firms that did measure the overall employee experience, 66% indicated that the results made an impact on the organization at large. One study participant stated, “We have restructured the team to give them more autonomy while dealing with clients. We have also revamped the infrastructure for a more flexible environment.”
Employee Development
Closely related to employee engagement is the focus that firms have on employee development. In all, 36% of firms indicated they had formal employee development plans, and one-third of firms had a specific process for developing leaders. This process included promoting a mentor-mentee relationship, and making formal learning programs within the industry accessible.
As employees progress in their development, a clear career path with well-defined metrics can help gauge success in the role. However, any progression by employees in their career path should be predicated on the needs of the organization.
One tool for mapping how a role may progress is a current job description. When examining the differences between high- and low-retention firms, a few components stood out. In addition to stating the hard skills needed for a role, high-retention firms were more likely than low-retention firms to also indicate the backup duties and character qualities (e.g., soft skills) needed to excel in the role.
Table Stakes
Some components of the Employee Experience module results were common among all participating firms. Both high- and low-retention firms indicated they had a written mission, vision, and values statement; written job descriptions; and a formal organizational chart. “While these tools appear to be table stakes more than ever before, merely having these tools is not sufficient. Effectively using them to lead the organization, develop employees, and communicate the direction of the business may be areas of opportunity for firms experiencing low retention rates,” said Catherine Williams, Dimensional’s Head of Practice Management.
One way to measure the importance and impact of measuring employee engagement, investing in development, and systemizing the employee experience is through the impact on revenue growth. High-retention firms were able to garner greater revenue growth than low-retention firms, 13% vs. 8%.
Much like the strategy a firm has for growth and running the business, a strategy for how to attract, retain, and engage employees is equally critical, regardless of the size of the organization. Low-retention firms might consider looking closely at why employees have departed or why the firm is struggling to attract talent. Compensation, lack of a clearly defined career path, or poorly designed job postings and descriptions could be contributing factors. Beginning with the table-stake items, then assessing what can make the employee experience unique at a firm are great places to start.
Disclosures
Source: Dimensional Fund Advisors 2020 Global Advisor Study. The firm surveyed 974 advisory firms with participants from the US, UK, Europe, Australia, and New Zealand.
All expressions of opinion are subject to change. This information is intended for educational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services.
FOR PROFESSIONAL USE ONLY. NOT FOR USE WITH RETAIL INVESTORS OR THE PUBLIC.
The information in this material is intended for the recipient’s background information and use only. It is provided in good faith and without any warranty or representation as to accuracy or completeness. Information and opinions presented in this material have been obtained or derived from sources believed by Dimensional to be reliable and Dimensional has reasonable grounds to believe that all factual information herein is true as at the date of this document. It does not constitute investment advice, recommendation, or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Unauthorized reproduction or transmitting of this material is strictly prohibited. Dimensional accepts no responsibility for loss arising from the use of the information contained herein.
“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., Dimensional Ireland Limited, Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.
UNITED STATES: This information is provided for registered investment advisors and institutional investors and is not intended for public use. Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.
CANADA: This document is issued by Dimensional Fund Advisors Canada ULC for registered investment advisors, dealers, and institutional investors and is not intended for public use. Commissions, trailing commissions, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise noted, any indicated total rates of return reflect the historical annual compounded total returns, including changes in share or unit value and reinvestment of all dividends or other distributions, and do not take into account sales, redemption, distribution, or optional charges or income taxes payable by any security holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. The other Dimensional entities referenced herein are not registered resident investment fund managers or portfolio managers in Canada.
AUSTRALIA: In Australia, this material is provided by DFA Australia Limited (AFSL 238093, ABN 46 065 937 671). It is provided for financial advisors and wholesale investors for information only and is not intended for public use. No account has been taken of the objectives, financial situation or needs of any particular person. Accordingly, to the extent this material constitutes general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. Any opinions expressed in this publication reflect our judgment at the date of publication and are subject to change.
NEW ZEALAND: This material has been prepared and provided in New Zealand by DFA Australia Limited, (incorporated in Australia, AFS License No.238093, ABN 46 065 937 671). This material is provided for financial advisers only and is not intended for public use. All material that DFA Australia Limited provides has been prepared for advisers, institutional investors and clients who are classified as Wholesale investors under the Financial Markets Conduct Act 2013. This material does not give any recommendation or opinion to acquire any financial advice product, and is not financial advice to you or any other person.
WHERE ISSUED BY DIMENSIONAL IRELAND LIMITED
Issued by Dimensional Ireland Limited (Dimensional Ireland), with registered office 3 Dublin Landings, North Wall Quay, Dublin 1, Ireland. Dimensional Ireland is regulated by the Central Bank of Ireland (Registration No. C185067). Directed only at professional clients within the meaning of Markets in Financial Instruments Directive (MiFID) (2014/65/EU). Information and opinions presented in this material have been obtained or derived from sources believed by Dimensional Ireland to be reliable, and Dimensional Ireland has reasonable grounds to believe that all factual information herein is true as at the date of this document.
Dimensional Ireland issues information and materials in English and may also issue information and materials in certain other languages. The recipient’s continued acceptance of information and materials from Dimensional Ireland will constitute the recipient’s consent to be provided with such information and materials, where relevant, in more than one language.
WHERE ISSUED BY DIMENSIONAL FUND ADVISORS LTD.
Issued by Dimensional Fund Advisors Ltd. (Dimensional UK), 20 Triton Street, Regent’s Place, London, NW1 3BF. Dimensional UK is authorised and regulated by the Financial Conduct Authority (FCA). Directed only at professional clients as defined by the rules of the FCA. Information and opinions presented in this material have been obtained or derived from sources believed by DFAL to be reliable, and Dimensional UK has reasonable grounds to believe that all factual information herein is true as at the date of this document.
Dimensional UK issues information and materials in English and may also issue information and materials in certain other languages. The recipient’s continued acceptance of information and materials from Dimensional UK will constitute the recipient’s consent to be provided with such information and materials, where relevant, in more than one language.
NOTICE TO INVESTORS IN SWITZERLAND: This is an advertising document.
RISKS
Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful.
JAPAN: Provided for institutional investors only. This document is deemed to be issued by Dimensional Japan Ltd., which is regulated by the Financial Services Agency of Japan and is registered as a Financial Instruments Firm conducting Investment Management Business and Investment Advisory and Agency Business. This material is solely for informational purposes only and shall not constitute an offer to sell or the solicitation to buy securities or enter into investment advisory contracts. The material in this article and any content contained herein may not be reproduced, copied, modified, transferred, disclosed, or used in any way not expressly permitted by Dimensional Japan Ltd. in writing. All expressions of opinion are subject to change without notice.
Dimensional Japan Ltd.
Director of Kanto Local Finance Bureau (FIBO) No. 2683
Membership: Japan Investment Advisers Association
FOR LICENSED FINANCIAL ADVISORS AND INSTITUTIONAL INVESTORS IN HONG KONG
This material is deemed to be issued by Dimensional Hong Kong Limited (CE No. BJE760), which is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.
For use by licensed financial advisors and institutional investors who are “professional investors” (as defined in the Securities and Futures Ordinance [Chapter 571 of the Laws of Hong Kong] and its subsidiary legislation) only in Hong Kong. This material is provided solely for internal training and educational purposes and is not for the purpose of inducing, or attempting to induce, such financial advisors and institutional investors to make an investment nor for the purpose of providing investment advice. Not for use with the public.
Unauthorized copying, reproducing, duplicating, or transmitting of this material are prohibited. This material and the distribution of this material are not intended to constitute and do not constitute an offer or an invitation to offer to the Hong Kong public to acquire, dispose of, subscribe for, or underwrite any securities, structured products, or related financial products or instruments nor investment advice thereto. Any opinions and views expressed herein are subject to change. Neither Dimensional Hong Kong Limited nor its affiliates shall be responsible or held responsible for any content prepared by financial advisors or institutional investors. Financial advisors in Hong Kong shall not actively market the services of Dimensional Hong Kong Limited or its affiliates to the Hong Kong public.
FOR LICENSED OR EXEMPT FINANCIAL ADVISORS AND INSTITUTIONAL INVESTORS IN SINGAPORE
This material is deemed to be issued by Dimensional Fund Advisors Pte. Ltd., which is regulated by the Monetary Authority of Singapore and holds a capital markets services license for fund management.
This material is not an advertisement, has not been reviewed by the Monetary Authority of Singapore, and should not be shown to prospective retail investors. For use by institutional investors and licensed or exempt financial advisors only in Singapore for internal training and educational purposes and not for the purpose of inducing, or attempting to induce, such institutional investors or financial advisors to make an investment. Not for use with the public.
This information should not be considered investment advice or an offer of any security for sale. All information is given in good faith without any warranty and is not intended to provide professional, investment, or any other type of advice or recommendation and does not take into account the particular investment objectives, financial situation, or needs of individual recipients. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if appropriate, seek professional advice. Dimensional Fund Advisors Pte. Ltd. does not accept any responsibility and cannot be held liable for any person’s use of or reliance on the information and opinions contained herein. Neither Dimensional Fund Advisors Pte. Ltd. nor its affiliates shall be responsible or held responsible for any content prepared by institutional investors or financial advisors.