Many family offices are struggling to build and maintain staff. AlTi Tiedemann Global’s new study, titled the Family Office Operational Excellence Report, found that 70% of family offices have difficulty recruiting new talent, and 65% have concerns about staff retention.
AlTi Tiedemann Global partnered with Campden Wealth for the study, which was conducted between April and September of 2023. Responses came from 98 family offices primarily based in North America that claim an average of $1.4 billion in assets under management.
Large family offices (assets of more than $1 billion) are able to offer higher employee compensation than small family offices (assets less than $250 million). The report found that the average chief investment officer at a large family office received $821,000 per year in compensation, while CIOs at small family offices received $337,000 annually on average. Compensation totals include salary, bonuses and incentives.
“We’ve cut down on spending, particularly on salaries, to make the family office more sustainable,” said a CFO at a single-family office cited in AlTi Tiedeman’s report. “The family office couldn’t afford to employ myself or my brother at rates comparable to what we could earn elsewhere.”
Of surveyed family members, 80% said they were satisfied with their staff output.
“Like many businesses, family offices emphasize the value of their staff," Adam Ratner, director of research at Campden Wealth, told Crain Currency. "However, employee retention can be challenging across industries. Factors such as competitive pay, better conditions and shifts in generational attitudes toward work are among those impacting retention rates. Additionally, the recent strength of the U.S. economy has increased labor mobility, further influencing this trend.”
The report found that family offices struggled most to attract talent in accounting, IT and tax roles. Strategies being employed to enhance staff retention include “offering flexible working arrangements, such as work-from-home options, and providing incentivization packages for more senior employees,” Ratner said. “These packages may include co-investment opportunities, phantom stock options and discretionary bonuses.”