Many would argue that taxpayers have been victimized by the financial mess on Wall Street over the past year or so due to TARP payments to some of the country's biggest banks. Some also argue that another victim is the investment management industry. The fact is that even many smaller firms in this industry – on Main Street as opposed to Wall Street – have been forced to go on the offensive to demonstrate that clients can continue to trust them with their money.
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But when you have a winning workplace that engenders a culture of trust, respect and fairness, the effort expended here is greatly reduced. In extreme instances of doing right by employees, even worldwide market downturns can have a minimal effect on client retention and trust.
This is the case at Bailard Inc., a 40-year-old financial advisory firm with 49 employees in Foster City, CA, that Winning Workplaces named a Top Small Workplace in 2009. Bailard has its battle scars from the economic turmoil, to be sure: the company recently instituted across-the-board pay cuts. But their collective eyes have never wavered from the prize: even in the last year, client retention was an astounding 97 percent.
Part of this success comes from the fact that, in stark contrast to other small businesses who might not even have this term in their vocabulary, a strong workplace culture is put front and center at Bailard. Employees speak about it as something as tangible as a new suit.
"As we do our jobs with our clients, we wear this openness and trust on our sleeves in all of our daily actions," says Burnie Sparks, who has been with the firm for 27 years and is currently their President.
Adds CEO Peter Hill, a 23-year veteran of Bailard, "Your internal brand becomes your culture in a service company, so you kind of wear that brand as you deal with people. And if the brand is for transparency and openness, they come through in your customer and client relationships."
What does this mean in practical terms? When it comes to Bailard's clients, Hill says this means not shying away from communicating during the tough times.
A year ago, as the bottom was falling out of the market, Bailard ramped up its communication with clients in new and powerful ways. They held conference calls with multiple clients where any and all questions were on the table. They even devoted staff to soliciting questions via email in real time during these calls.
In these efforts, Bailard has arguably had more buy-in and commitment from its associates than its competitors because it holds weekly meetings designed not only to keep everyone current about key tasks and the state of the marketplace, but to plan ahead. Reflecting their open, transparent culture, a longstanding practice is to share all information with employees. In a huge deviation from big, Wall Street firms, this even includes salary information.
This type of standing, all-employee meeting within a framework of complete openness no doubt helped the firm retain competitive advantage when it became clear that, like past Winning Workplaces honorees Corporate Ink and JA Frate, Bailard would have to choose which path to go down at the fork in the road: lay people off or cut pay.
"We had a series of meetings with the whole company to explain how we saw the financial situation, what was happening and how it might affect us under different scenarios," Hill says. "We actually said to employees ahead of time, 'Here are some alternatives. Here's step one, here's step two.' Step one was cutting back on certain things. Step two involved taking some pay cuts."
"When the decision was eventually made to implement pay cuts, the shock was not as great," says Jenilee Deal, who has worked at Bailard for a year as Human Resources Associate. "Company morale and involvement stayed level, despite the cuts."
Katie Beltrone, Investment Associate of three years, agrees. "By the time the cuts were enacted, I felt prepared both financially and emotionally," she says. "I really respected that the cuts were proportional by title. It seemed fair that the decision makers took the highest cuts."
Hill says it was important to retain current employees at all costs because having long-tenured employees correlates directly to client retention. In fact, Bailard has the longest-tenured employees on average among the 2009 Top Small Workplaces, at 13 years. Their professional client service staff, notes Sparks, averages over 21 years.
"That creates a consistency in the client relationship, so the client can always know who they're talking to," says Hill, who adds that this impacts Bailard's bottom line because half to two-thirds of their business comes from client referrals.
What will the future hold for Bailard? Hill says they're cautiously optimistic heading into 2010. While their year-end is coming up in March, and the firm is planning to see where it will be as far as pay levels at that time, he says it is impractical to think that they will necessarily be where they were before the turmoil started a year ago. But because Bailard has put such a solid foundation in place of being open with employees and involving them in long-term planning, they seem set to continue to enjoy the benefit of high client retention and predictable revenue that comes with stellar service from long-tenured, highly empowered employees.
Company: Bailard Inc.
Web site: www.bailard.com
Industry: Financial advisory
Location: Foster City, CA
Number of Employees: 49
Sales: $11.7 million
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