Poaching is ultimately a positive phenomenon, says Barbara Schonhofer
Recent high-profile defections, such as Geoff Bromley leaving Guy Carpenter to join Aon and Andrew Carrier leaving Kiln to head-up Peleus Re, have brought the issue of talent under the spotlight once again.
“Nowadays, everyone is after the dearth of talent – it’s like a frenzied panic,” said Barbara Schonhofer, managing director at London-based EJS Search. “We have seen some high-profile moves, with brokers vying for expertise and market share in a ferociously competitive market.”
Schonhofer confirms that a shift has taken place from the poaching of whole teams (such as Aon Re poaching Benfield’s facultative team) to the poaching of top-level executives. “Companies are now looking to recruit the best leaders, rather than whole teams,” she confirmed.
The present poaching pandemic was not mere media hype but a reality, said Schonhofer, and although “you will always find people moving around the market,” there was now much greater movement.
Far from being a problem, Schonhofer thinks that poaching is ultimately a positive thing. “I do not see poaching as a problem. It creates a more mobile market. It makes companies think about a business vision. It creates better business leaders, managers and clearer visions. This can only be good.”
The negative aspect of poaching lay in the vast sums of money involved. “Some packages are going around for a huge amount of money with really big premiums,” said Schonhofer.
Companies are not getting value for money because they are paying huge fees for people who may not necessarily fit in with what Schonhofer refers to as the “culture” of the company. “A realism has to come in when companies ask themselves what they are getting for their money,” she said.
She thinks the amount of money involved in poaching is unsustainable. “The money involved in poaching is stupid – it is a bubble waiting to burst. Acquiring companies will realise they’re paying too much money and not getting rewards. The Locktons of this world will tell newly acquired people that they have to deliver.
“Brokers need to go out to universities, compete with banks, establish training structures and have a clear vision. This all helps with retention
“There will, thus, be a backlash as people will not be able to produce what they are expected to.”
Part of the problem lies in the market mentality to get a “quick fix”, without considering how the new hire will fit into the business. A winning strategy, insisted Schonhofer, requires long-term thinking.
“The key to success is getting that unbeatable culture that brokers want to work with – this is highly seductive and requires long-term planning,” she said.
So can the poaching phenomena be solved by better retention of staff? “Absolutely,” said Schonhofer. “Brokers need to go out to universities, compete with banks, establish training structures and have a clear vision. This all helps with retention.”
She called for a fundamental change in the way that brokers market themselves if they are to slow the tide of poaching. “Ironically, for people involved in risk, we’re quite averse to risk and change as an industry,” she said.
“We’re not very good as an industry at selling ourselves. To market ourselves better and to attract the best talent, the entrepreneurial and academic sides need to combine.”
The poaching “problem” came to prominence in 2001, when the Bermudian start-ups acquired managers to help run their companies. This, in turn, created gaps in the companies they were poached from.