The UK insurance industry needs to do more to satisfy the career aspirations of its senior managers to attract and retain the best people, a survey of senior executives shows. Simon Hearn describes the findings of this.
Against a background of unprecedented change and consolidation, organisations in the insurance industry are striving to improve distribution, product innovation and technology and this has serious implications for the workforce. How does the industry attract and retain top flight graduates and senior executives in the face of competition from a range of traditionally more "glamorous" opportunities in financial services?
As head hunters with a large practice in this sector, Russell Reynolds Associates wants to be able to advise clients what really attracts and motivates senior players in the insurance and broking industry. We, therefore, commissioned a survey of 100 senior insurance executives below director level (45 from the life assurance sector and 55 from general insurance) and asked them to give their opinions on a wide range of subjects relating to their career and role in insurance.
They were asked to rank a series of factors in terms of their importance in career satisfaction and how satisfied they were currently with these factors.
The satisfaction gap
The survey identified a number of "satisfaction gaps", where the perceived importance of an issue exceeded people's actual experience. Better managed, these factors could enhance both performance and motivation.
Career satisfaction - what do people look for?
For most insurance professionals, money is not the critical factor when it comes to career satisfaction. Opportunities to progress in their career, a professional challenge, being able to feel that a job has been well done and being part of a team are all more important.
People in the industry expressed surprise at the survey's finding that 45% of senior insurance executives admitted they had fallen into insurance by mistake. Many of those who commented on our research believed the true number was more likely to be in excess of 99%!
There was no dispute about the report's finding that 91% of senior executives are satisfied or very satisfied with their career and there cannot be many industries which can match this claim. However, feedback indicated that the industry as a whole does a poor job of letting the outside world know about the benefits and levels of satisfaction it can offer.
If the insurance market is to attract graduates and senior executives from other industry sectors, it needs to promote the fact that insurance provides an enjoyable and satisfying career.
Remuneration - the rewards
Salary is well down the list of factors creating job satisfaction. In fact, those who are most concerned about remuneration are also more likely to be less satisfied with their current position or company. Most people who commented on the results, although initially surprised, agreed that salary is only one of a number of important factors when it comes to motivating and retaining the best people. In most cases it seems the insurance business has probably got the balance about right in terms of package and it is the less tangible issues of recognition and career progression that need to be addressed.
Career mobility and appraisal
It should be noted, however, that 82% claimed to have been approached by executive recruiters over the last year. Although most people questioned stated that a major reason to move would be an attractive financial package (79%), the opportunity to run part of a business and greater responsibility were also major reasons for changing jobs. The message is that employers cannot afford to be complacent.
Although 74% said they were happy with the appraisal system in their organisation, it is surprising that appraisals appear to be somewhat academic and not linked in any tangible way to real business performance. Only 20% had salary reviews measured against achieving objectives and only 10% said their reward was ultimately linked to company profits. At a time when businesses are seeking to encourage employees to take real responsibility for their contributions, this must be a concern for senior management.
Education - choosing the insurance industry
Reaction to the revelation that more than half of the senior executives surveyed had no degree and that 41% had no 'A' levels was more one of horror than surprise. These findings add credence to the belief that the insurance industry seriously needs to address the educational disparity between it and the rest of the financial services market, if it is to compete for the best people in the UK and in the world insurance market.
However, the survey also highlighted a difference between the life sector and the rest of the insurance industry. Within the life sector, people claim that their executives are highly qualified, having both 'A' levels and at least one degree. There seems little doubt that the actuaries and fund managers working in the life sector are educated to a higher level than most other insurance executives.
It is clear that there are a great number of highly successful senior managers who have become qualified on the job rather than by taking exams. While this may have been sufficient in the past, in today's highly competitive and increasingly global marketplace, it is no longer satisfactory. Insurance is a multi-billion dollar international business, which needs to attract the best and brightest, who are comfortable dealing at the highest client levels. The industry can no longer afford to have recruitment criteria and an approach which differs from that of its clients or other financial services businesses.
Insurance companies and brokers are already bringing in the skills and expertise of people from non-traditional backgrounds such as management consultancies, banking and IT/MIS. They are starting to recognise that these senior people with first class track records add value to their companies.
The findings of the survey were confirmed and enhanced by discussion with a range of senior people active in the insurance and broking business. Companies recognise that their future may be in jeopardy if they do not take steps to attract high flyers from outside the industry, and identify and reward the best of their existing staff.
Employers cannot afford to be left behind in the race to improve the educational background of their employees.Today's career-conscious employee demands continuous professional development and skills development. MBA holders and other graduates are driving up standards in the industry and overseas secondments are increasingly offered to fast track executives.
Firms need to provide an environment in which their best executives can thrive. Of those surveyed, 94% are still ambitious to further their careers, and only 30% believe that if they retired tomorrow they would have reached their full potential. Combine this with their thirst for recognition and it is obvious that there is a wealth of potential waiting to be unlocked.
Simon Hearn is part of the global reinsurance practice of Russell Reynolds Associates. The group has 34 offices worldwide and works in specialist practices. London and Chicago act as the groups' reinsurance centres. Tel: +44 (0) 171 839 7788; fax: +44 (0) 171 873 0071.