Why Legacy Systems Make It Hard to Hire and Retain Talent

May 31, 2020 - Doug Moromisato

Legacy systems not only hinder your search for available talent, but it might actually keep the talent away.

Blockbuster Video

Remember the days when you physically had to go into a store to rent a movie? There may be a nostalgia thinking back to the days of “making it a Blockbuster night,” but does anyone miss movie rental late fees?

Remember the days when you had to install portfolio accounting software to a desktop computer, or do manual processes that are automated nowadays?

There really isn’t a nostalgia because, well, what’s nostalgic about inefficient processes? Besides, some advisory firms are still living in that world, and the recent lockdowns from COVID-19 exposed the risk of relying on locally stored devices.

Holding on to legacy technology is not just an internal decision with internal consequences; the old systems could negatively affect RIAs’ ability to hire and retain talent.

Why Advisories’ Legacy Systems Make It Hard to Hire and Keep Talent

Increasingly Limited Talent Pool

Whatever technology you have been using since way back when, fewer and fewer people will be investing their time and energy to master. What’s more, experts on those old systems will eventually retire, or they will move on to newer, perhaps greener, pastures.

New of crops of young talent, as well as forward-thinking industry veterans, will see align themselves to where their human skills are best served in a tech-driven, increasingly automated middle- and back-office. Naturally, their skill sets will be most applicable to a growing majority of firms that employ the latest financial technology and portfolio accounting systems.

In the end, RIAs doing things the old way will find it harder and harder to get the talent they need.

Weakened Firm Image

When employees look at a job posting or learn in the interview process about old systems the company uses, a job-seeker with options will note which firms appear to be moving ahead or falling behind.

A Dell and Intel study found that 80% of millennials said workplace tech would have an influence when deciding to take a job.

Whatever is newer and more conducive to better work performance, and whichever company provides those resources, the younger workforce will more quickly gravitate to.

Regardless of industry they work in, people want to work for an organization that shows a path to a bright future, and even something like a tech revamp shows to employees and job prospects a commitment to future competitiveness and success.

For advisories that don’t make the changes, what does that say to job candidates about the company’s future?

Even if the firm has no intentions to put itself at a disadvantage or shut down, job-seekers’ perceptions will tell them otherwise, and those perceptions can be damaging.

Not Preparing Employees with Skills for the Future

Requiring your team to invest time to learn an old system, while beneficial to the firm in the short run, could hurt the staff in the long run.

What happens to employees when they are let go, either due to budget cuts or a firm closure, but they never had training in new software or applications that would make them attractive job candidates elsewhere?

Some employees may recognize such fate that awaits, and they’ll jump ship before it’s too late.

According to LinkedIn’s 2018 Workforce Learning Report, 94% of employees would stay at a company longer if it invested more in their career.

In the case of investment firms, giving employees the opportunity to learn and master new technology would certainly signal that the firm wants to remain competitive in the future, and they value their current staff so much they want the team to upgrade their skill sets accordingly.

Can someone really boast on their résumé how great they are at developing rolls of film when digital cameras and smartphones replaced film? How many one-hour photo shops are there left for that excellent film roll developer to showcase his or her skills?

Likewise, there isn’t much to brag about on a résumé how skilled someone is with an obsolete portfolio accounting or trading system, as fewer and fewer firms seek said skills.

On one hand, a “sinister” approach would suggest, “Hey, at least the former employees will be of little use to competitors.”

But it’s a two-way street: job-seekers will have little use for firms that don’t help them, and current employees who have a chance to move on will.

Keep and Retain the RIA Talent

Legacy systems have pros and cons, but as the technology gets older, fewer and fewer people will invest their time, energy, and resources into learning old systems, rendering the number of desired applicants with expertise on a given software or application fewer and fewer.

In turn, job candidates may shy away from an advisory firm that uses older and inefficient technology, and joining the organization may be perceived as negative to one’s skills and career development.

As the studies have shown, workplace technology influences an employee’s decision to join a firm, and employees would stay longer at a firm that invests in their career development.

With our TAMP1 platform, Empaxis helps advisory firms move away from inefficient legacy technology to a cloud-based solution for portfolio accounting and performance reporting. The TAMP1 interface is user-friendly, and it’s a system current and prospective employees can stand behind.

By upgrading the technology and allowing employees an opportunity to learn skills associated with the new systems, RIAs could do a better job at attracting and maintaining their talent.