The Billionaire’s Tug-of-War For Talent

Vying for talent

Staffing is a persistent issue for all businesses. Lately, even billionaires have been struggling to find the staff they need to manage their cash. This is what people mean when they say it gets lonely at the top.

The global war for talent has been heating up in family offices—otherwise known as the people who handle investment and wealth management for rich families. As the rich get richer, family offices have grown in number, and also have expanded horizontally as they find new creative ways to spend, protect, and invest their wealth. 

However, this has placed them in direct competition with more feisty competitors in private equity, hedge funds, and venture capital firms.

Businesses are getting desperate

Since these industries demand similar skill sets, billionaires are practically fighting over the same people. The knee-jerk reaction would be to raise salaries and offer enticing compensation packages. But these tactics will only raise salary expenses further and further up.

Some smaller family offices are trying to accomplish the impossible: entice talent from big private equity firms such as KKR, Blackstone, and Carlyle. 

It’s a pointless exercise, especially for senior-level talent. As the market gets denser, these employees have no real incentive to join a small family office. 

Additionally, some family offices are luring middle managers from bigger private equity firms by giving them more control, essentially making them senior-level employees but with less experience.

This is a risky move in a volatile industry. You want experts who have proven themselves over the years. Bestowing authority to someone who hasn’t paid his dues can only lead to a bigger mess. Shortcutting the recruitment process isn’t the way to go.

The perfect workaround

These firms fail to realize that talent isn’t concentrated in one spectrum of the world. Many capable individuals offshore can accomplish similar intricate tasks but at a 70% discount. This will empower firms to funnel their savings to accelerate their expansion initiatives.

Yes, outsourcing won’t solve all staffing problems. It’s close to impossible to outsource a chief investment office or other C-suite positions. However, outsourcing critical staff like HR, IT, accounting, customer service, and even middle managers is very feasible.

Outsourcing is the perfect tool in a high-risk and competitive environment like private equity. By outsourcing administrative and portfolio management duties to an offshore firm, investors can focus on the core aspects of a business, reduce variable costs, and be up-to-date with industry standards without incurring additional expenses.

Question for your business

Have you utilized an offshore workforce to win the talent war?

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