Based on SRG’s recent survey of over 500 financial service businesses—ranging from small single-owner practices to larger multi-owner firms—we uncovered a surprising vulnerability: 17% reported having formal employment agreements in place, while 83% admitted they did not. If your business falls into the latter category, you may be exposing yourself to unnecessary risks and potentially diminishing the value of your firm.
Why Employment Agreements Matter
Your employees are the driving force behind your success and play a critical role in the long-term viability of any succession or growth strategy. Without proper agreements in place, your business could face challenges in protecting its interests and maintaining stability. Employment agreements help define expectations, protect confidential information, and secure the foundation of your firm’s future.
If you currently lack formal agreements or believe yours could be improved, Succession Resource Group can help. We provide essential employment resources to guide you in implementing best practices for team development while safeguarding your business.
Why Business Owners Avoid Formal Employment Agreements
- Informality and Trust: Small practices often rely on close-knit, informal environments. Employers may trust that mutual understanding negates the need for formal agreements.
- Cost and Complexity: Agreements are seen as costly and administratively burdensome.
- Lack of Awareness: Many owners are unaware of the benefits formal agreements can provide.
- Preference for Flexibility: Verbal or informal agreements feel more adaptable to changing needs.
- Short-Term Roles: Part-time or temporary roles may not seem to warrant a full employment agreement.
Protecting Your Business with Formal Agreements
Formal agreements set clear expectations for roles and responsibilities, outline behavioral standards, and align employees with your company’s mission and vision.
They also protect intellectual property, ensure client confidentiality, and provide a critical layer of security for your business. Don’t leave your firm exposed. Let Succession Resource Group equip you with the tools to build a secure foundation for your team and your future success.
