SUMMARY
One of the most important decisions a growing advisory firm will eventually face is determining the right time to hire. While hiring may appear straightforward on the surface, timing often has a greater impact on the outcome than the hire itself. Many advisors approach hiring reactively, waiting until workloads become overwhelming, service begins to slip, and team members feel stretched beyond their limits. By the time the decision is made, the organization is already operating from a position of stress rather than strategy.
This episode challenges that approach by introducing the distinction between reactive hiring and intentional hiring. Reactive hiring occurs when leaders wait until capacity has already been exhausted before seeking additional help. Advisors find themselves drowning in responsibilities, falling behind on service requests, struggling to maintain client experience standards, and trying to manage growth without sufficient resources. In these moments, hiring becomes a necessity rather than a strategic decision.
The problem with reactive hiring is that it creates a significant paradox. The very moment when a firm most needs additional help is often the moment when it has the least capacity to recruit, interview, train, onboard, and integrate a new employee. Team members are already overloaded, making it difficult to dedicate the time and attention required to successfully add someone to the organization. As a result, firms often remain under pressure long after the hiring process begins.
Intentional hiring takes a different approach. Rather than waiting for a crisis, advisors proactively monitor the business and identify constraints before they become major problems. The focus shifts from reacting to capacity issues toward anticipating them. Instead of asking whether the organization has already reached its breaking point, advisors begin evaluating whether they can see future bottlenecks forming.
The first indicator discussed is capacity. Every organization experiences busy periods, but occasional stress is not necessarily a reason to hire. The more important issue is whether capacity constraints are occurring consistently. Repeated signs such as overloaded calendars, delayed client follow-up, unfinished meeting preparation, operational bottlenecks, and routine after-hours work can indicate that the firm is approaching a sustainable limit. These are no longer isolated events but patterns that suggest future growth may be constrained.
The conversation emphasizes the importance of evaluating capacity objectively whenever possible. While advisors often rely on the feeling of being busy, subjective perceptions are not always reliable workforce planning tools. Instead, firms should think about workload distribution, client support ratios, meeting volume, administrative requirements, and the actual productive hours available after accounting for meetings, training, vacations, and internal responsibilities.
However, recognizing capacity constraints alone is not enough. The next step is understanding what work actually needs to come off someone's plate. This perspective shifts the conversation away from adding people for the sake of adding people. Instead, advisors are encouraged to identify the specific activities consuming valuable time and determine whether those responsibilities truly belong with the person currently performing them.
For example, a lead advisor may spend hours each week handling paperwork, processing service requests, updating client records, or preparing for meetings. While these tasks are important, they may not represent the highest and best use of the advisor's time. Removing those responsibilities could create capacity for activities that generate greater value, such as client meetings, planning conversations, business development, strategic leadership, or relationship building.
This concept extends beyond advisors themselves. Operations professionals, client service associates, and support staff may also be performing work that could be handled more efficiently by someone in a different role. A successful hire often unlocks existing capacity within the organization rather than simply increasing headcount. The real objective is creating opportunities for team members to focus on the work that creates the greatest impact.
The episode then explores one of the most common misconceptions around hiring: the belief that firms should wait until they can comfortably afford a new employee. While financial discipline is important, waiting for hiring decisions to feel completely risk-free may actually delay growth. This is where hiring shifts from being viewed solely as an expense to being viewed as an investment.
Rather than asking whether they can afford a salary today, advisors should consider what additional capacity, productivity, and growth opportunities a hire could create. If freeing up a portion of an advisor's schedule enables more client meetings, stronger relationships, increased business development activity, or improved strategic focus, the value generated by that capacity may exceed the direct cost of the employee.
This perspective introduces an important question: what is the cost of waiting? Delaying a hire may seem financially prudent, but it can also create hidden costs. Opportunities may be missed, growth initiatives postponed, client relationships limited, and key contributors may remain trapped in lower-value activities that do not maximize their capabilities. Waiting too long can be just as expensive as hiring too early.
Another critical mindset shift involves recognizing future needs before they become immediate problems. Advisors often assume hiring should occur when they have reached full capacity. However, by the time capacity is fully exhausted, the organization may already be behind. Recruiting, interviewing, onboarding, training, and integrating a new employee takes time. Even after joining the firm, new hires require months to become fully productive. Firms that wait until they are at one hundred percent capacity may find themselves operating under significant strain for an extended period.
Instead, advisors are encouraged to consider hiring when they are at approximately seventy-five to eighty percent capacity and can clearly see additional demand approaching. This proactive approach provides organizations with the flexibility needed to recruit thoughtfully, train effectively, and maintain a high-quality client experience throughout the transition.
To help guide decision-making, the episode presents a practical five-question framework. Advisors should evaluate where they are approaching capacity, determine what work needs to be reassigned, identify the higher-value activities that newly created capacity will support, assess whether the economics justify the investment, and clarify which role will actually solve the underlying problem.
That final question is especially important because hiring successfully is not just about deciding when to hire. It is also about understanding who to hire. Many firms instinctively assume they need another advisor when capacity becomes constrained. In reality, the greater need may be additional support around existing advisors, allowing them to operate more effectively.
Ultimately, the episode reinforces a central lesson: the best hiring decisions are made before desperation takes over. Advisors who understand their capacity, evaluate the economics carefully, and anticipate future constraints position their firms to grow intentionally rather than reactively. In doing so, they create stronger teams, improve client experiences, and build more scalable, sustainable organizations.
TRANSCRIPT
Aaron Grady, Advisor Consulting Director at USA Financial - Welcome back to the Rare Advisor, where we explore the recurring and repeatable activities that help financial advisors build stronger, more valuable, and more sustainable firms. Today I want to talk about a question almost every growing advisor eventually has to answer. And that question is: when is it actually time to hire? And I think this is one of those decisions where timing matters almost as much as the person that you eventually hire. Because
Most advisors don't wake up one morning and say, you know what? Six months from now, we're probably going to need another employee. So let's start preparing for that today. Usually, what the process sounds like is more like we're drowning, client service is slipping, I can't get everything done, my team is overloaded, we're turning away opportunities, or even maybe if we don't hire somebody soon, somebody on this team is going to kill me. That's when the hiring process ends.
Actually starts for more most advisors. And unfortunately, that's usually too late. A few years ago, we did a rare advisor episode on something called the Entrepreneur's Economic Hiring Model. And you can actually go back and look at that episode if you'd like. But one of the ideas in that episode that really is instrumental to what we're talking about today was that businesses often wait until everyone is already overloaded before they add another person.
Now stop for a second and consider the problem that that type of thinking creates. When everybody is already working at 110%, who's going to recruit? Who's going to interview? Who's going to onboard? Who's going to train? Who's going to document the processes? And who's going to spend the extra time with the new employee when they're inevitably have questions? You've waited until the moment where you have the least capacity available.
To successfully add capacity. That's what we call reactive hiring. What I want you to think about instead is the concept of intentional hiring. Intentional hiring means you're watching the business closely, even enough so that you can see the constraints develop before it becomes a crisis. You're not hiring because the wheels are already coming off, you're hiring because you can see where the business is headed.
So the question is, so how do you even know? I think personally, for me, it comes down to four things. And here's the four things I want you to look at. Number one is capacity. Where are you consistently bumping up against capacity? Now notice I said consistently. Everybody has busy weeks. Everybody has a difficult month. That doesn't necessarily mean that you need another employee. But let's say
The lead advisor or advisors' calendars are consistently full, or if service requests are consistently backing up, if meeting prep isn't getting completed, if follow-up is taking too long, if your operations people are constantly working around bottlenecks, if team members are routinely doing work at night or on the weekends just to stay caught up, those aren't just busy season problems. Those may be capacity signals.
And ideally, you're measuring some of those. How many households are each person supporting? How many meetings can your lead advisor or advisors realistically handle? How much service work does each client segment generate? How much product how much productive capacity does each employee actually have after PTO, meetings, training, administrative work, and internal responsibilities? Now look.
You don't have to turn your practice into an engineering project. But we feel busy isn't a great workforce planning model either. So the second thing I would have you look at is understanding what work needs to actually come off someone's plate. And now this is where the economic the entrepreneur's economic hiring model becomes really useful. So you don't start with
Can I afford another employee? Start by asking, what would this employee allow someone else to stop doing? I'll say that again. What would this person allow someone else to stop doing? Maybe as the lead advisor, you're spending 10 hours a week preparing paperwork, chasing service items, updating CRM notes, and doing meeting preparation. If you remove those 10 hours, what happens? Do you simply work 10 fewer hours?
Per week. And there may be merit or value in that. But what if we took those 10 hours and now they can be repurposed towards client meetings or prospect meetings or centers of influence, relationship building, planning conversations, or even business development? Now you've unlocked something that has economic value. And this doesn't only apply to the lead advisor. Maybe your operations manager is doing work that should be handled by a CSA.
Maybe your associate advisor is spending half a day every single week on administrative tasks. Maybe your highest performing CSA is doing work that can be moved to a more junior employee. A good hire doesn't just add another set of hands. A good hire unlocks capacity that's already sitting inside your firm. Let me say that again. A good hire unlocks capacity that's
Already sitting inside your firm. So that brings us to the third thing you need to look at. What higher value work will this new hire replace? Or what higher value work will replace it? So if I free up this time, what are we going to do with it? This is where I think a lot of advisors get stuck. They say, I'll hire when I can afford it.
And on the surface, that sounds responsible. But sometimes waiting until the hire feels completely comfortable financially is exactly what keeps the business from reaching its next level. Because the question isn't only can I afford to add this salary today? A better question may be what capacity, product, productivity, or growth could this hire unlock? Think about it.
If I take five or ten hours of lower value work away from an advisor every week, and that time can now be redirected towards, as I said, client meetings, prospect planning, centers of influence, relationship building, leadership, business development, et cetera, the hire isn't simply adding an expense. It may also be creating the capacity that allows the economics of the firm to improve. That's an important distinction.
And I hear it from advisors all the time. They say, I want to just wait until the until we get a little more positive revenue or recurring revenue. I'm just waiting, waiting, waiting. Advisors often think of hiring as an expense created by growth. But sometimes the hire is actually the investment required to create the next stage of growth. And that's why waiting can be an expensive or an expense too.
If you wait six months, 12 months, or even longer because you want the economics to feel completely risk-free, how much opportunity did you delay during that time? How many prospects did didn't get pursued? How many client relationships couldn't be added? How much higher value work stayed trapped underneath service and administrative or operational work? How much longer did your best people remain stuck together or stuck doing?
Things that someone else could have been doing. Now look, that doesn't mean you you hire recklessly. The economics still need to make sense. You still need to understand the cost of the role, what work it will absorb, whose capacity it will free up, and what you plan to do with that newly created capacity. But don't make the mistake of assuming that you have to fully realize the growth before you make the hire. Sometimes the hire is what makes that growth possible.
So the real question may not be, can I afford to hire? It may be, what is the cost or what is it costing me to keep waiting? So that brings us to our fourth point. Can you see the need coming? This might be the biggest mindset change for most advisors. You don't necessarily hire when you're at 100% capacity. Sometimes you hire when you're at 75 or 80% and can reasonably see that you'll reach 100%.
Especially if you know hiring will take several months, because remember, and this is something that I think goes overlooked too often, you have to find the person first. You have to interview the person, you have to hire the person. You mean that person may need to give notice to their current job. You're gonna have to train them. And even after they're trained, they're not going to operate at full capacity on day one. If you're already underwater when you begin the process, you're probably going to stay underwater for quite a while.
So here's a simple hiring test. Before making your next hire, ask these five questions. Number one, where are we approaching capacity? Number two, what work needs to come off someone's plate? Number three, what higher value work will replace it? Number four, do the economics support the investment? And remember, it doesn't
Have to be 100%. Sometimes this is what the opportunity is what becomes the economics. And number five, and finally, what role actually solves the problem? Now that last question's important. Because just because you've determined it's time to hire doesn't mean you know who you should hire. And that's going to bring us to our next rare episode topic.
And and this is, as I've said before, this may be just as important as knowing when to hire, as knowing who to hire. maybe you're growing and instinctively you think we need another advisor. But do you? Or do you need more support around the advisor or advisors you already have? And that's what we're going to tackle in our next episode, because the best hiring decisions aren't made when you're desperate.
They're made when you understand your capacity, understand the economics, and you can see the next constraint before it becomes a crisis. Thanks again for joining me for another episode of the Rare Advisor Podcast. If you found this episode helpful, please like, subscribe, and share it with another advisor that may be wrestling with when to make that next hire or whether waiting is actually holding back their growth. And as always, remember when the why is clear, the how becomes easy. So never lose sight of your why.
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The RARE Advisor is a business model supercharged by Recurring And Repeatable Events. With decades of experience coaching successful advisors, your host, along with other leaders in the industry, discusses what it takes to grow a successful practice. With the aim of helping financial professionals and financial advisors take their business to the next level, this podcast shares insights and success stories that will make a real impact. Regardless of the stage of your practice, The RARE Advisor will provide thoughtful guidance, suggestions for developing systems and processes that work, and ideas for creating an authentic experience for your clients.
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