Three key challenges facing family offices, and how they could impact their recruitment strategies
A range of forces – technological, generational and cultural – are effecting changes in family office recruitment in 2019.
Below, we’ve assembled three of the key factors affecting family office executive search strategies for closer analysis:
1. Generational handovers
Generational handovers are at the forefront of many private family office executive’s minds in 2019 (as we discussed previously).
With more than 70% of family offices expecting a handover within the next 15 years, and many increasingly mature heirs now already taking on more responsibility, there is the beginnings of an impact on family office recruitment.
In Deloitte’s 2019 UK Family Office Trends survey, they found that many traditional family office employees – generally ‘hard’ skill specialists in finance or law – are increasingly finding themselves needing staff who have a strong range of the ‘softer’ skills required for smoothly managing the changes that a handover brings.
Those can pertain to the changes in requirements regarding household affairs – some family offices are seeing younger scions eschewing traditional, lifestyle-based concierge services such as travel arrangements or personal bill management unnecessary and even invasive – or to the management of relationships between family members.
2. Cybersecurity dangers
A 2017 study by Campden Wealth and Schillings revealed that 28% of family offices had by that point already fallen victim to cyber attacks. Deloitte’s 2019 Family Office Trends survey reveals that cyber crime vulnerability has continued to rise since, yet in-house expertise and preparation has remained largely static.
This lack of preparation is a risk, particularly when considering that 77% of attacks in the Campden/Schillings report were a result a ‘phishing’ attacks, which rely on social engineering techniques – essentially tricking employees into giving up passwords by impersonating websites or organisations.
According to Deloitte’s Cyber Risk team, around 20% of employees without cyber security training will fall victim to these types of schemes, which is one reason why family offices are likely to be a particularly soft target for cyber criminals. 40% of offices do not have dedicated cybersecurity policies and have only relatively informal information security guidelines.
It’s critical that family office leadership have a strong understanding of the risks moving forward, and that they’re able to put in place the necessary measures both within their IT team and within the broader family office staff to ensure both sensitive financial data and private household data are kept secure.
3. The growing millennial workforce
The word ‘millennial’ still summons thoughts of school leavers and graduates in the minds of many – but the older part of this cohort is now entering a relatively mature stage of their careers,
The oldest millennials are now 37 years old, and by 2025 they will constitute 75% of the global workforce. They are the fundamental constituents of the new talent pipeline and attracting the best among them into family office jobs.
With loyalties, principles and priorities that differ from previous generations, to achieve that will require some reflection and consideration on the part of family offices. PwC’s 2019 Workforce of the Future survey highlights that millennials are highly motivated to work for organisations that reflect their own – while Deloitte’s Global Millennial Survey 2019 reveals that those values tend to be tied to prioritisation of people and societal and environmental welfare.
For some family offices, this could mean ensuring a defined, long term purpose in these areas. If it does, the benefits won’t be in isolation – they should dovetail neatly with the findings regarding the direction that generational handovers are taking some family offices in, particularly the shift towards impact investment as a greater priority.
These are exciting times for family offices, but also ones fraught with change. True House Partners is a specialist family office recruitment agency, and we are ideally positioned to help navigate modern single and multi family office executive search.
Our work spans London, mainland UK and Europe as well as jurisdictions such as Channel Islands (Jersey & Guernsey), Isle of Man, Bermuda, the Caribbean (British Virgin Islands, Cayman Islands and Bahamas), Mauritius, Seychelles and the Middle East (with a particular emphasis on United Arab Emirates) and the Far East including Singapore & Hong Kong.