How to stop the brain drain

With the pool of skilled talent shrinking, the insurance industry cannot afford complacency. Resorting to poaching the staff of competitors, launching costly legal battles over restrictive covenants and even hiring private detectives to track the movements of former employees, the race for the best and brightest has become cut-throat competitive, and employers are taking no chances.

The last couple of years have seen juicy tales of poaching and High Court accusations of former employees walking business out the door and into the arms of rival companies. But where does it end?

As some companies continue to take their fight to the courts, others have opted for more peaceful, less costly scenarios – creating a workplace so appealing that employees won’t want to leave no matter the size of the carrot dangled before them by the ruthless competition.

Earlier this year, the CII warned of a worrisome trend. Graduates, it seems, aren’t aching to work in the world of insurance. The Association of Graduate Recruiters’ Winter Review backed up the fears with findings that predicted the insurance industry was not anticipating any growth in graduate recruitment, despite vacancies of more than 16%.

“The insurance industry is not seen as quite as sexy a career as investment banking, law or even accountancy,” says Mark Sheldon, manager of general insurance at recruitment firm Darwin Rhodes. “At the moment it’s seen as the poor relation. Attracting talent at the entry-level has been a challenge.”

So talent already in the market has become more valuable and fiercely sought after, as shown by the numerous legal cases in the past 12 months.

In July last year, Towergate accused Bob Beckett and 15 former Towergate employees who joined him at Insurance Risk Solutions of breaching restrictive covenants. It said 119 clients had been approached in breach of covenant. The matter was settled out of court with the defendants paying £825,000 in damages and costs.

Also that month, JLT launched legal action against three of its former energy brokers who left to join competitor RK Harrison. Erinaceous Group subsidiary Farr Insurance brokers was locked in an eight-month court battle with former employee Huw Thomas after he left the company to join a start-up rival. Heath Lambert took on a former director in August who was poached by THB.

Broker powerhouses Willis and Marsh went head-to-head in August 2007, with a legal writ revealing that Willis implicated Marsh UK aviation chief executive Simon Harker in a conspiracy to not only poach details of its aviation accounts, but employees as well.

In March this year, Oval started legal proceedings against four former staff members believed to have joined Leicester-based broker Berkeley Burke. And that same month, Towergate went after 10 of its former employees and their new employer, Chaucer Insurance.

After more than 15 years working in recruitment for the insurance sector, Andrew Byrne of Hillman Saunders says one thing is clear today – loyalty just isn’t what it used to be.

“The insurance sector is very incestuous and poaching does happen. There are a lot more people jumping around the market than there were in the past,” he says.

But loyalty is a two-way street. One reason cited for discontent on the part of employees is the feeling that their employers don’t trust their staff, Byrne adds.

“There was a scenario recently when one of my clients arrived at work and got an email informing him that his company had just been bought by the company he had just left and wanted to get away from. There are a lot more people nowadays that don’t have the trust in larger companies they once did.”

For an industry that specialises in mitigating risk, insurance has not been overly proactive in investigating the reasons employees flee.

“It’s too easy to assume it’s about money,” says Sheldon. “But there are other reasons that could have kept them around such as new challenges and variation – an insurer offering a new line of business or a broker moving into a new region – and a new culture.”

But the insurance industry has never shied away from a challenge. Some have already taken some steps in promoting staff satisfaction. For those wondering where to start, Insurance Times, with the help of several talent management experts, has compiled a list of measures employers can take to hold the poachers at bay and keep their employees in the office instead of in court.

Training and development

There is a misconception that if a company dedicates time and resources to training employees, they may take their skills and go elsewhere. Not true, says Darwin Rhodes’ Sheldon. “People are actually more likely to stay if they are well trained.”

&#8220The longer people remain away from work the more their mental well-being begins to suffer. This can result in negative feelings towards work and a lack of confidence about returning to a work environment.

Mike Collins, senior HR manager at Allianz

Ian Jerrum, managing director of Searchlight Insurance Training, says companies that take training seriously are much more likely to have loyal, motivated and happy staff. “Companies that invest in training make their employees feel valued and more confident in their roles,” he says.

Broker JLT had this in mind when it launched its training and development policy 12 months ago, offering a variety of support services and lunchtime study sessions for employees studying for CII qualifications.

“We’re hoping it will illustrate to staff we take their career seriously and that by investing in them, they will stay working for us,” says Catherine Birch, training and competence manager.

Making your employees feel valued

Firms that have the least turnover are the ones where employees are a name, not just a number,” says Hillman Saunders’ Byrne.

Firms are increasingly starting to realise that it’s important to make employees feel like part of a team, and that their opinions matter, experts say. As such, Groupama has introduced its Preferred Employee Task Force (Pet) to keep tabs on how its staff feel about their jobs and the company.

“Pet is all about understanding what is important to our employees and trying to make it happen,” says Caroline Alexander, human resources director at Groupama. The insurer uses staff forums and online surveys to monitor feedback as well as analysing human resources related performance indicators.

Keeping employees out of the pigeon hole

Allowing employees room to grow and expand creatively within an organisation is one of the main steps firms can take to stop people leaving, say talent management consultants.

Victoria Speers, director of talent management at Hudson, suggests offering job shadowing and rotation opportunities within a company so employees can see what other divisions are up to.

“It’s important for people to see how their role impacts other areas of the company,” she says.

Zurich says it recognises the importance of this and therefore places all its employees —regardless of their positions within the company— on a succession plan which allows them to see how they are perceived by the company and maps out the route to several other jobs they are in line for and can work towards.

Health and wellness

Most in the talent management sector will agree that current corporate concepts on health and well-being are outdated and rarely take into consideration issues surrounding mental health. In 2007, Allianz held its first conference in Guildford to discuss wellness and how to provide managers with tips and advice on recognising the signs that all might not be well with an employee.

“Signs might not mean that the root cause is in the work environment, but a noticeable change in behaviour should be addressed before it unduly impacts work and colleagues,” says Mike Collins, senior HR manager at Allianz.

““The longer people remain away from work the more their mental well-being begins to suffer. This can result in negative feelings towards work and a lack of confidence about returning to a work environment.”

Allianz uses a health and wellness project manager to provide the sick person with the kind of support they need on various levels to get them back to work faster.

Groupama has begun the daily delivery of fresh fruit to raise awareness about healthy eating.

Talent recognition and rewards

&#8220We have seen some bigger organisations look at partnering
up with programmes where their employees can use their skills
to volunteer in a developing country for a couple of weeks. This is becoming a very effective way of retaining people

Victoria Speers, Hudson

It’s rarely about money, says Sheldon. What employees really want is to feel that their talents and efforts are being recognised.

Aviva-owned Norwich Union (NU) took this into consideration following feedback from staff suggesting they would like incentives as well as reward and recognition programmes. As such, NU launched its Your Recognition scheme which is a token of thanks to let a person know their work is noticed and appreciated. The scheme means the employee can receive vouchers for anything from shopping to entertainment. NU also recently started up its Shine Awards for staff members who deal specifically with brokers. Employees present cases to a panel of senior managers outlining where they have gone the extra mile. The recognition is welcome and the £20,000 awarded as top prize doesn’t hurt either.

Staff benefits

Today’s benefits are going beyond the usual medical and dental care. Firms are coming up with some creative ways to take care of their employees by understanding what their needs are. Norwich Union has a scheme that helps subsidise the cost of things such as computers, child care and mobile phones tax-free.

Groupama allows staff to put part of their salary towards child care vouchers, which is a more tax efficient way to pay for the service.

And Zurich allows staff to buy and sell holiday time in order to extend their vacations — particularly useful for events such as weddings when people are looking for a bit of extra time off.

Competitive salary

Though most experts say salary isn’t the main reason people leave jobs, employees do expect to be paid competitive salaries, and at least the market rate. But many chief executives will be relieved to know that doesn’t mean paying over the odds, says Sheldon. “Money doesn’t buy loyalty,” he adds.

Recruitment experts say most insurance companies tend to pay the market rate realising it’s necessary given the competitiveness of the market and the relatively small talent pool.

Support services

Sometimes the reason someone leaves a position might have nothing to do with the job itself. Stresses within someone’s personal life can have adverse affects on a person’s productivity and motivation within the workplace, says Allianz’s Mike Collins.

Companies are starting to realise that providing employees with support within their job but also in their personal lives makes for a happier and more successful work environment.

Norwich Union has started a free confidential support service for its staff called Your Call. It’s available 24/7 and can be used by any member of staff or member of their family who lives with them. The support service can be used to tackle a variety of issues at work or outside work such as, starting a new job, returning to work, managing money, bereavement, family conflict, illness and even buying a new home.

Flexible working

Who wouldn’t love to work from home one day a week or leave the office an hour earlier on a Friday afternoon? Companies are starting to realise that by being flexible with work hours, allowing, for example, an employee to put in a couple extra hours a day in exchange for a day off each week, they are making their staff happy without affecting productivity.

Zurich prides itself on its extremely flexible working scheme, claiming it is one of the key ways to help staff ensure a healthy work/life balance.

The insurer offers compressed hours which means employees can work three or four days a week which is particularly beneficial for people with young children, or those who want to save money on commuting costs. Zurich also allows its employees to work from home, either part-time or full-time, and provides all the required equipment and technology required for the job.

This has become particularly important for younger workers, dubbed Generation Y. Hudson’s Speers said younger workers are attracted to companies that they feel behave ethically. “We have seen some bigger organisations look at becoming partners in programmes where their employees can volunteer to use their skills in a developing country for a couple of weeks. This is becoming a very effective way of retaining people.”

Zurich sends five to six employees to India every year for one month to assist a number of non-government organisations with various projects including, marketing assignments and devising business development plans.

Recognising the increased focus on the environment and desire to be good corporate citizens, Groupama has also launched the Cycle to Work scheme and provides more than 800 employees with bicycles and equipment to ride to work. The employees will have a 12-month period to pay the company back through monthly deductions from their salary.