If Things Are Really Looking Up, Then Its Time To Staff Up

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The buzz in most corners of the insurance and financial services industry is that “things are looking up” this year.

People point to some innovative new product designs that are debutinga hedging strategy here, a new type of guarantee there, a critical illness add-on way over there, and a surprisingly convergent approach way over there.

The telltale signs seem everywhere. Online advertising in niche markets is up. Hiring of experienced knowledge-worker pros is under way. Third-party providers are getting new financial sector contracts. Its incipiency, pure and simple.

Still, every time I encounter an up-up-and-away cheerleader talking about financial product expansion, I cant help but retort, “Oh, really?”

Thats because the product development segment of the financial industry has been all but decimated by the recession. The drain on corporate memory, and hands-on expertise, is astonishing.

At this point, let me interject a few caveats. Yes, trained professionals still do hold certain key development and marketing positions at most companies. Yes, some product departments never lost their full complement of experts. And yes, some departments still have “got game,” even though they are a bit lean.

However, the scuttlebutt is that the product rank-and-file at a good number of firms is quite thinthe inevitable result of all the downsizings, rightsizings, restructurings and mergings of the previous 3 years. And, though 2003 showed marked gains in the stock market, not every financial company has yet returned to Easy Street.

To test this out, just scratch the surface a little in the product development domain. Call or e-mail departments in product development, marketing, promotion, underwriting, or perhaps service/support. Choose companies that are liked and trusted, not the iffy ones. You will learn quickly that, while some companies do have people to field inquiries competently and in a timely fashion, many do not.

Some have several newer staffers on board who are eager to help but who are frequently unaware of key issues, products, transactions and the like. They must therefore hunt for answersby finding a veteran at the firm, checking a book, doing online research, taking a class, networking or whatever.

Others just dont have enough people, period. So, they cant quickly answer calls, e-mails or faxes. Sometimes, I am told, they never answer at all.

As for the product development function, what I am hearing is, “too few actuaries, designers and related experts.” Naturally, many of those professionals werent perceived as “needed” when sales were down and cost-cutting was up. But that was yesterday. Today, they are needed but not there.

This situation is not all bad. It creates an opportunity for less experienced professionals to become more seasoned, and creates work for industry consultants and downsized veterans, who are now being called to come in and help. That, in turn, can be cost-effective for the enterprise, in comparison to actually hiring seasoned professionals.

However, for those looking for a competitive edge, this is a good time to take a more comprehensive approach. Some ideas follow, and they apply to product distributors, as well as home office product teams.

If your firms product expertise is already greater than that of your competition, promote it like crazy. In a rebounding market, new product and product expertise are strong pulls.

If your newer staffers are not yet up to speed, get them training now or steer them to appropriate education programs. In a growth market, know-how wins.

If you use consultants to fill in the gaps, consider using them for more than patching and plugging. Many consultants today have deep knowledge, sufficient for handling strategic initiatives, not just fix-ups. Outsourcing at this level does require certain safeguardsnon-disclosure agreements and the likebut good matches can get your organization back on a growth track quickly and efficiently.

If you have the go-ahead to hire, well then, do it sooner rather than later. Depending on your needs, you might want to add wholesaler, advanced sales and promotion support, as well as development staff and service staff.

Products and services are what you have to sell. They are what your customers buy. Because of that, they deserve as much care and attention as you reasonably can afford to give, including sufficient expertise from development on through sales and support.


Reproduced from National Underwriter Life & Health/Financial Services Edition, February 27, 2004. Copyright 2004 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.