Not every business has a distinct ‘middle office’ – the function that sits between back office and front office and does all the important, but sometimes unglamorous, work such as research, report writing and analysis.
But it is the engine room that drives a business forward, so make sure it is properly serviced and maintained.
Do you have a middle office?
If not, you should. Without a distinct middle office, staffed by dedicated paraplanners, people end up doing jobs that are not appropriate or that take the away from other more productive or lucrative tasks.
Work out what you generate for the business per hour, then work out if that is worth spending on hold for routine calls to insurers, when a qualified paraplanner can do it.
What does it cost?
Paraplanners today are expecting a higher salary than they were five years ago.
Paraplanners are a rare commodity. This is the reality of supply and demand. There are not enough paraplanners, so their ‘price’ increases.
Recruitment consultants are encouraging paraplanners to move for higher salaries. Sadly, this goes hand-in-hand with the scarcity of paraplanners.
Do not be tempted into thinking that just because you know what salary you pay to the people in your middle office, you think that is all it costs.
The truth is, you need to time record everything.
Research conducted by Research in Finance last year showed that as little as 50 per cent of a paraplanner’s time might be spent on client cases.
The other things they do may be important, but this lack of time to commit to client work will help explain why it can be hard for employed paraplanners to keep up with workload.
Added to that the additional costs of national insurance, sickness, holidays, pension contributions, tools to do the job, upfront costs and training, and the dreaded recruitment fees, it is understandable that in our experience, very few businesses genuinely know the cost of their middle office.
The Hadzima method, developed at the MIT Sloan School of Management, helps frame the overall costs as an hourly cost based on salary (as seen in the table).
What you pay your paraplanner
The costs to get the paraplanner up and running
Effective hourly cost to the business
Keep the middle office loyal
One of the biggest bugbears employers have regarding their middle office is they spend time training them up, only for them to move on.
Paraplanners are quite often dedicated to a career as a paraplanner, which carries the risk of keeping them engaged in their role.
To keep a middle office loyal you need to have measures and targets for quality, productivity, and timescale for work production – all of which needs to form part of a CPD and training and competence plan.
The four steps can help ensure your middle office is as effective as it can be.
Damian Davies is managing director of The Timebank
This column is supported by Scottish Widows