ARTICLE TABLE OF CONTENTS
This article unpacks the term front office.
- What a front office is
- Why a front office is important
- The duties and responsibilities of a front office
- Lots more
So if you want to understand the 101 of front offices, then you’re in the right place.
It’s time for the first step!
Understand Front Office
The term “front office” is often thrown around so casually in such a wide variety of contexts that it can sometimes confuse the point.
What constitutes a front office for someone in a managerial retail role might mean something else entirely for an upper-level executive at a Fortune 500 firm.
It could also have a whole other meaning for someone in the hotel industry.
So, what does front office mean exactly?
In this article, let’s unpack the term front office so that you can get brought up to speed on what the concept means in the myriad of ways that it’s used in professional conversations.
To help cement the concept in your mind, we’ll also touch on the various front office functions, front office duties and responsibilities, and why front office is important.
This way, you can learn everything there to know about this all-important office position.
Front Office 101
Before we get started, let’s address the question, “What does front office mean?”
The tricky part about defining a concept like front office is that it can mean multiple things depending on the context in which it is used.
Broadly speaking, front office staff, clerks, and personnel are those who engage in direct contact with clients and customers.
Therefore, front office employees are largely responsible for generating revenues for a company and ensuring customer satisfaction.
What a font office looks like will vary widely by one’s profession and the office environment in which they work.
For the sake of convenience, let’s take the example of an investment banking firm.
The front office of an investment bank would look something like this:
- Sales representatives
- Traders and trading floor assistants
- Client advisory professionals
- Mergers and acquisitions experts
Although the positions listed above are unique to the investment banking industry, they speak to a core principle of front offices writ large.
All positions in the front office work directly with customers and clients to grow the firm.
What Do Front Offices Do?
Now that we know the basics of front office workers, let’s explore what they do from one day to the next.
As the client-facing wing of an organization, front offices are often occupied with customer services, sales, and advisory services.
A typical day at a front office might involve client meetings throughout the day, phones ringing off the hook, and prospects being emailed.
Whenever a customer, client, or prospect has to contact the firm, they call the front office.
In this sense, the front office serves as the first point of contact for the customer.
Therefore, front offices set an important example as spokespeople and representatives for a given firm.
Since front offices are often preoccupied with bringing in new customers and strengthening relationships with existing customers, they are wholly responsible for making money for a business.
They serve clients directly in exchange for their money. For this reason, front offices are an essential part of any customer-facing enterprise.
Front Office Functions
It is the responsibility of the front office to serve as the face of a company for customers and clients.
As such, the front office functions as the customer service wing of the firm and is regularly contacting customers and responding to their inquiries and requests.
A key function of the front office is that they develop reciprocal relationships with prospects and clients so that the company can learn more about them.
Front office clerks and representatives often ask clients questions about their goals, interests, and long-term ambitions.
Not all front office functions have to do with big-picture responsibilities.
For instance, front office tasks are often as small as organizing emails, handing out memos, and inputting customer data into a spreadsheet or text document.
Whenever we’re asked, “What is a front office,” the answer usually revolves around a core function: getting in touch with customers, and attending to their needs.
Without a front office, there would be no way of maintaining lasting relationships with customers and prospects.
Front Office Duties and Responsibilities
There are many front office duties and responsibilities that overlap across industries.
However, there are also industry-specific duties that vary by profession.
Below is a breakdown of specific duties of front office workers according to the industry that they work in.
Although there is a fair degree of variation between them, they share a common goal of serving customers and earning revenue for the business.
Hotel Front Office
In the hotel and hospitality industry, front offices carry distinct responsibilities that are unlike their counterparts in other industries.
Some of the key duties of a hotel front office include:
- Booking reservations
- Registering guests to vacant rooms
- Assigning rates and rooms
- Providing guest services
- Maintaining and settling guest accounts
- Maintaining a record of guest history
The duties outlined above all involve working directly with customers, or finding ways to serve their needs better.
As such, the front office is the “face” of a hotel and the quality of front office hotel staff may determine whether a guest decides to stay at a given hotel.
The concierge, valet service, bell desk are also front office positions within a hotel.
However, these positions usually do not entail a physical office.
Nonetheless, these critical customer-facing roles are an integral part of a hotel’s front office.
Investment Bank Front Office
In investment banking, there are several unique roles that serve as part of a firm’s front office.
Whenever we’re asked, “What are front office services,” the first examples that come to mind are divisions from the investment banking industry, such as:
- Investment management
- Wealth advisory
- Global transaction banking
- Merchant banking
- Commercial banking
- Capital markets
- Sales and trading
These are the departments and divisions concerned with growing revenues for the company, discovering future earnings potential, and serving clients directly.
Sports Management Front Office
In the context of sports management, a front office carries a slightly different meaning than in other industries.
A team’s front office includes a variety of high-level decision-makers that do not serve customers, but rather the ones who make executive decisions regarding hiring and player acquisitions, such as:
- General Manager
- Director of Player Operations
A sports team’s front office is concerned with controlling the team and building it so that it is competitive.
A team’s front office also organizes activities for the players and schedules team-building exercises that develop rapport and camaraderie among the players.
Bank Front Office
In a commercial or retail bank environment, a front office refers to all positions at the “front of the house” that serve customers and clients.
Some of the most common examples of front office positions within a bank include:
- Wealth management
- Financial advisory
- Tellers and clerks
- Private equity
- Equity research
- Commodity brokers
Except for equity researchers, all of the positions above deal with customers directly.
In the case of equity research, these positions are unique in a bank’s front office because they are concerned with growing the bank’s revenue and improving their profitability.
Front Office vs. Middle Office vs. Back Office
A firm’s front office is contrasted with its middle office and back office counterparts.
However, not all firms are large enough to have a middle office. Regardless, all front office-containing businesses also have a back office from which it is distinguished.
Middle office personnel does not work with customers or clients directly because all of their interactions with customers are mediated through the front office.
For example, a typical middle office job in a bank is a risk management professional.
These key middle office workers help ensure that front office workers are compliant with company policies and external regulations so that they can serve customers better.
Similarly, information technology (IT) support workers are usually classified as middle office personnel.
Since front office workers often rely on IT workers to assist with preparing for client meetings and client-involved software, an IT department is usually categorized as a middle office.
The distinction between middle office and back office workers can easily blur.
As a rule, middle office workers are only categorized as such if they interact directly with client-facing positions. If they don’t, then they are considered back office workers instead.
Like front office workers, back office personnel is an essential part of an organization. The numbers speak for themselves.
In 2014 alone, back office activity accounted for an estimated $758 billion in the United States, or over 4% of the country’s entire gross domestic product.
Back office workers make up a sizable portion of a given company.
Often, back office workers outnumber front office workers several times over.
Back offices consist of professionals who work behind the scenes, away from customers, on day-to-day operations.
Whenever we’re asked, “What does front office mean,” we often define a front office by juxtaposing it against a back office.
Whereas front office personnel work closely with clients and develop relationships with them, back office workers are kept away from customers.
For example, a back office department in a bank is the settlements division.
This division is responsible for ensuring that trades and transactions at the bank are properly processed and that they reflect the data on the books. They have no interaction with customers.
Understand Front Office vs. Middle Office vs. Back Office in Detail
As you apply for jobs or are researching the infrastructure of an organization, especially in financial services, you might run into the terms all together: front office, middle office, and back office.
Each section of the company would not be able to survive without the support of the other two.
Learn each office classification’s critical tasks and goals, and how they each interact with each other: complete guide to front office vs. middle office vs. back office.
Skills and Qualifications for the Front Office
Front office workers generally must have “soft skills” to help navigate difficult situations with customers.
Often, disgruntled customers and clients act unpredictably and can create a hostile work environment.
It is incumbent on the front office worker to diffuse the situation with grace while upholding a high standard of professionalism.
People skills are important assets for front office staff.
When asked, “What is front office work,” the answer inevitably revolves around working directly with clients or focusing on operations that grow a company’s bottom line.
Without people skills, front office workers would not be able to do their jobs to the standard expected of them.
Below is a non-exhaustive list of essential skills that front office employees require to perform their jobs adequately:
- Excellent oral and written communication skills
- Intensive listening to understand customer complaints and concerns
- Can read and interpret instructions to carry out on a client’s behalf
- Notice when something has gone wrong or may go wrong ahead of time
- Excellent time management skills
- Evaluation of the costs and benefits of a certain action
- Can motivate and inspire action from others
- Seeks out ways to help other people
The skills listed above point to a commonality across all front office workers: Their jobs depend more on practising people-oriented skills than technical skills.
In most professional contexts, an excellent front office worker is one who embodies the soft skills listed above.
Why The Front Office Is Important
Without a front office, a company would have no means by which to directly communicate with clients and address their concerns.
As such, they play a vital role in prospecting new customers and driving growth.
This is why front office meaning is often likened to the nerve center of a company – because they’re responsible, collectively, for driving the firm forward.
In certain industries, a front office can make or break a company.
In the hotel business, for example, a poorly trained front office sets a bad first impression for the establishment.
Since they are the first employees that a potential customer interacts with, a poor front office interaction can cause a guest to leave for a competitor.
The bottom line is that a company cannot function without its customer base.
It’s the responsibility of the front office to acquire customers, serve their needs, maintain their satisfaction and win their business into the future.
Given that a firm cannot function without their customers, front offices are often regarded as the most important office position within a company.
There is no business to consumer (B2C) company that can succeed in a competitive market without a skilled front office.
Salary Differences Between Front and Back Office Employees
Wages and salaries vary between the office positions in a company.
In larger firms with front and back offices, employees in the former office generally earn more than their back office counterparts.
With the exception of senior management and C-suite executives, back office workers are generally compensated less for their work.
This is largely because front office workers are directly responsible for the revenue brought into a company, and they are compensated accordingly.
For example, in the banking industry, the salary of a back office worker such as a trust supplement officer tops out around $79,000.
A comparable front office worker, such as a financial advisor, made a median salary of nearly $89,000 in 2018.
In a white-collar professional context, front office workers often stand to earn more over the course of their careers compared to back office workers.
However, in some industries, such as the hotel business, back office managers tend to outearn their front office counterparts.
The Three Definitions of Front Office Workers
As an umbrella term, the phrase “front office” refers to a wide variety of roles within an organization.
We’ve already alluded to the fact that front offices vary in composition depending on one’s industry.
However, we haven’t yet unpacked what each variation means.
To fully understand what front office job means, you can find a list of the three primary definitions of front office employment below.
These definitions apply to different front offices depending on the business type in reference.
For example, one might apply to the banking industry while another to a restaurant.
A company’s front office is often used to refer to decision-makers within an organization.
This definition of the term denotes the employees or staff who are “at the front” of the office and whose decisions have an impact on the day-to-day operations of the company.
By this definition, the front office is the most powerful office within the company and can refer to middle-managers and corporate executives alike.
Front office workers of this kind supervise lower-level employees who staff other departments.
Front office workers are not always managers. Often, the term front office is used in reference to customer or public-facing positions within an organization.
These are the employees who meet and interact with clients to drive sales and bottom line growth.
By this definition, a front office worker is contrasted with the “back office” who does not maintain relationships with customers.
As such, these front office workers are not administrators – rather, they are public servants who cater to the needs of their prospects and clients.
Although less commonly used than the other two definitions, a third definition of front office worker refers to employees who work in offices that literally occupy the front of a building.
For example, hotel employees who staff the front reception desk are classified as front office workers.
Similarly, receptionists and secretaries are also categorized as front office workers.
Even though these roles are often administrative in nature and are not concerned with sales or bottom line growth, they fit the description of a front office worker by this third definition.
Front Office & Middle Office & Back Office in Detail
Besides the front office is the middle and back office. Do you know what each one does?
If you want to understand in-depth each office type and get it explained with examples, then take a look at the following articles: