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From Kirsten Bischoff, Opalesque New York: A six year study of investment managers published by Finstad in 2005 found that firms with a high rate of staff turnover tend to produce inferior results relative to those firms where the staff rate turnover was lower. With this in mind, Opalesque looked to a recent study by Merrill Lynch and insight from Russ Gerson, CEO of the Gerson Group for the various ways hedge funds can approach hiring and contract negotiations with the end goal of staff retention. See Part One: here

The human resource advantage beyond hiring According to the research compiled by Merrill Lynch in their white paper "Recruiting and Retaining Investment Professionals, What Works, What Doesn't" employing a chief administrative officer or human resources professional has quantifiable advantages. "A sizeable minority of funds in our survey (39%) do not have a head of human resources - and may want to hire one. A much higher proportion (65%) of low turnover funds have a head of human resources than high turnover ones (45%)." Merrill Lynch also cites a study by Harvard Business Review, where financial services firms with dedicated human capital management practices had higher performance based on stock market returns one year later.

In the Merrill Lynch study, most firms did no......................

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