Retaining Talented Employees A Growing Industry Concern

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There is a “strong dearth of talent” in the insurance industry, and management is largely to blame, says Tom Rowe, managing director of Korn/Ferry Internationals Insurance Practice, New York.

A general lack of accountability on the part of senior management and their boards is the culprit, as well as employees being promoted through a “narrow, functional focus, rather than a cross-functional focus,” he says.

In other words, rather than spotting a talented professional, having her gain experience in different jobs in the company and then promoting her, management often takes a superstar from one department (underwriting or sales, for example) and promotes her right away. This often leads to senior positions being populated by people who do not have a broad perspective on the industry, Rowe says.

Upgrading the human resources function and bringing in people who are focused on training and development can spur an effort in training, he says.

“Typically the HR function in the industry has been filled by failed underwriters,” Rowe says. “In the past few years theyve brought in real professionals.”

Companies are more conscious about recognizing high performers than they have been in the recent past and are trying to retain them, he says.

Skills that identify a high performer, Rowe says, include leadership, a broad business perspective, turnaround skills, and “the ability to come into a situation and improve performance.

“High performers approach their job as though they have a have bottom-line responsibility for their area, even if they dont,” Rowe says.

Once high performers are trained, retaining them becomes a key concern, he says. Management should make available to them that which motivates most employees: career satisfaction, money and time, according to Rowe.

Companies are making the retention of talented people a priority in part because there remains a limited supply of talented professionals despite the relatively high unemployment rate, says Bruce Tulgan, founder of Rainmaker Thinking Inc., New Haven, Conn.

The high unemployment rate affects people “generally at the lower end of the employment spectrum,” he says.

Because the insurance market requires a high level of skill and education among its employees, management is competing for employees in the professional talent pool, where demand is higher than supply, Tulgan says.

In order to retain talented people, management should strike a balance between making sure employees have the skills they need to perform and over-investing in those employees, so they dont take what theyve learned elsewhere, he says.

Those who employ underwriters should select professionals for their ability to learn skills quickly.

“Put them through high-impact training that gets them up-to-speed quickly in a relatively narrow package of responsibilities,” Tulgan says. “The idea is not to teach professional depth and wisdom, they have to acquire that over time.”

In order to manage effectively, managers should understand that the relationship between themselves and their employees is much less hierarchical than it once was, he says. A manager is now in the position of a buyer and the employee is a vendor of time and energy.

“Its different now,” Tulgan says. “You dont yell at vendors, you dont throw them into a sink-or-swim environment, and you dont manage through fear.”

What managers should do, Tulgan says, is communicate by making goals, deadlines and expectations clear, and negotiate. Employees “want to get paid more and have more control over their own schedule, so its a day-to-day negotiation.”

Often managers feel insulted when employees make demands. They shouldnt, Tulgan says, because thats how negotiation works, and monetary rewards for a job well done can be an effective means of retaining a pool of talented employees.

Also important is hands-on performance management, Tulgan says. Both manager and employee should know what the employee will deliver. Between setting the goal and deadline, the manager should “leave the person alone,” he says.

“If youre not delegating effectively, youll know because the employee will keep asking questions or youll constantly be in the employees work. Let the employee own the goal and coach them, tell them how they can do better, what they should do next, motivate them.”

Allison Alden, executive vice president of Human Resources and Communication, Manulife, Boston, says companies are looking for employees with different skill sets than were once sought, largely because the industry is changing.

A “talent gap may occur as the industry consolidates and becomes more competitive and entrepreneurial and less conservative,” she says.

Along with a changing industry, changing skills include “not only underwriting and risk assessment but also entrepreneurial skills, being able to create product and get it out the door quickly, being market-, segment- or customer-responsive,” Alden says.

Retaining employees who have these skills is tied to their boss, the environment, how a firm provides job satisfaction, whether the work is enriching, and whether employees can contribute ideas. Compensation is a component, Alden says, but not the driving factor.

At Manulife, an annual talent review is used to measure employees performance, Alden says. It focuses on how an employee is performing, how he can be developed, and whether he takes responsibility for his own development. Another assessment surveys management with comment from those they supervise and those by whom they are supervised.

In order to produce leaders, a company must provide “the right opportunities and pay attention,” Alden says. “Thats the best way to grow in a company, to be able to use your experience every day.”


Reproduced from National Underwriter Life & Health/Financial Services Edition, March 18, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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