Personnel - Making the most of human resources

Insurance is always touted as a people business and there is no doubt that, when it comes to broking, personal relationships are at the heart of what takes place in the market.

Over and above the relationship between broker and client however, there is also a huge focus on the relationship between employee and employer. For those firms that want to succeed in the insurance broking sector, striking the right balance between these two parties is essential, although with all of the rules and regulations that now exist in regard to human resources, striking this balance has never been more difficult.

From the moment a firm decides to recruit an individual, there is a raft of legislation that surrounds how it must behave and the rights that both parties have during their relationship as employee and employer.

Punishment

There are stiff penalties for those that fall foul of these guidelines and, for smaller broking businesses, dedicating the time and resources to keeping on top of such matters can be difficult.

For any business looking to get to grips with its mandatory responsibilities in relation to human resources and personnel, there are a number of good starting points. The Department for Business Enterprise and Regulatory Reform has plenty of useful information that businesses can access, while the Advisory Conciliation and Arbitration Service and The Equality and Human Rights Commission should both be able to point companies in the right direction.

When it comes to recruiting, retaining and managing a workforce, keeping on the right side of the law is critical. Employment law is perhaps the fastest growing branch of the legal tree and keeping up to speed is difficult, however, firms cannot afford to be ignorant if they want their reputation, finances and long-term chances of success to remain intact.

The Equality Bill has hit the headlines in recent weeks and this is going to have a huge impact on the insurance broking sector. Although the final detail of the Bill has not been drawn up, the idea is that the legislation will simplify what is already in existence as well as level the playing field in a number of areas that remain out of kilter.

The most significant of these is in regard to age discrimination and, while it is already unacceptable to take a person's age into account when considering them for a job, the legislation has not yet been extended to the provision of goods, services and facilities. However, this is likely to change once the new Bill comes into force and this is something that the insurance industry will have to watch very closely indeed.

It is likely that it will remain possible to use age as a criterion in underwriting, so long as actuarial reasoning can justify its use. Nonetheless, it is likely that the products that insurers offer their clients and those that they provide for their employees, such as life and medical cover, will come under significant scrutiny.

Rachel Dineley, a partner in the employment and pensions group at law firm Beachcroft, comments: "Age discrimination is already very much a feature on the landscape for employers, yet where it could have an impact is that it (the Bill) may require insurers, if it is extended to goods, facilities and services, to take a different approach as to how they offer insurance cover, which will include cover for employees such as life and medical cover."

If benefit packages have to be re-evaluated then there is going to be a lot of work to do, while reorganising what is already in place could be very costly.

This is only one aspect of the proposed legislation and Dineley says that there are numerous other areas to keep employers on their toes, such as the possible inclusion of a mandatory requirement to conduct equal pay audits.

Ease of use

Whatever is contained in the detail of the bill, Dineley is very clear on the need for it to be thought through thoroughly, arguing that the last thing employers in the UK need is another layer of legal uncertainty and inconsistency. She adds: "This legislation will only be a success if it is truly well drafted and thought through, so that it achieves simplification rather than generates a whole new raft of confusion and case law as to how it is to be interpreted."

One area of employment law not so well thought out was the minimum statutory procedures introduced in regard to the process for dismissing a member of staff.

Under The Employment Act (2002), an employer must set out in writing the reasons for the alleged misconduct of an employee. Thereafter, the employee must be invited to attend a disciplinary meeting and, after the meeting, the employer must inform the employee of the decision in writing. Depending on the outcome, the employee can appeal. Failure to follow the standard procedure will amount to unfair dismissal unless the employer can show that it would have made no difference to the outcome.

Reality

Although the rules were introduced to set out a procedure by which many more cases would be settled without needing recourse to an employment tribunal, this is not how things turned out in practice.

Instead, the process has become a major obstacle and in many cases took on an importance that was out of proportion to the actual matter in hand. Fortunately, this legislation is set to be replaced in the coming year, on which Dineley comments: "The procedures, which have been a millstone around employers' necks, remain in place until next April but they will be removed as part and parcel of The Employment Act, which is going through parliament. Although the government intended that these procedures should assist in resolving disputes internally so that they did not go to tribunal, it actually had the reverse effect and as such it was wholly ineffective as a policy."

Despite the best intentions of management boards, the commercial world is a fickle environment and, unfortunately, redundancy and unemployment are as much a part of everyday life as the need to occasionally fire staff. In this aspect of the business, there are also procedures to go through and it is imperative that firms are well aware of the rights that their employees have and the way that they should go about consulting and completing on redundancy proposals.

One temptation that many firms have fallen into, smaller ones especially, is in seeking to use commercial redundancy requirements as a way of getting rid of people that have not fitted into the business as well as was hoped originally. This is perhaps a natural response if the business needs to introduce a certain number of redundancies but, in today's commercial environment, such an approach is completely unacceptable.

It is important that every angle of the situation is considered, as Paula Morris, HR manager at broker Alec Finch, says: "You need to make sure that nothing is considered as a fait acompli; you should always have your mind open to change. Redundancies are a difficult and stressful situation for all concerned and you should never even enter into this without fully thinking things through and be open to the fact that you might not have come up with the best outcome.

"You need to make sure that you consult with staff fully and consider any ideas or suggestions they may suggest that you haven't thought of."

Consultation is not just important around issues such as redundancy but also about virtually every aspect of change in a business that affects its employees. The Information and Consultation Regulations (2004) give employees the right, subject to certain conditions, to request that their employer sets up or changes arrangements to inform and consult them about issues in the organisation for which they work. The regulations came into force for organisations with 150 or more employees in 2005 and then took effect for firms with more than 100 employees on 6 April 2007 and for those with more than 50 employees from 6 April this year.

Workload

Alan Price, senior employment law adviser at Peninsula Business Services, is under no illusion as to just how much this affects brokers. He comments: "The medium-sized broker has now fallen under these regulations and there is a requirement to consult with staff on wide-ranging issues. If there are going to be any substantial changes then firms have to consult with staff and enter into a dialogue as to the future of the business and that is quite onerous in itself. (It will affect) everything: working time, training, restructuring, equal opportunities and outsourcing. Anything on the HR landscape."

While there may be a number of hoops to go through when dealing with existing staff, things are no less complicated when it comes to recruiting new ones. Over and above issues regarding discrimination and the ever-tightening legislation that exists in this area, there are also more basic issues around finding the right quality of people and making sure that mistakes are not made in the basic process of interviewing and hiring candidates.

Expertise

While HR and personnel staff may be up to speed on exactly what can and cannot be asked at an interview, this is not necessarily true of other employees likely to be involved in meeting and interviewing possible new starters.

This is something that Kevin Young, chairman at Argyll Insurance Group, is very aware of and he says that it could be easy for senior managers to create problems, as Young explains: "We take a great deal of time to make sure that the interview process is as it should be and we are coached by HR to make sure our interviewing technique is correct."

Over and above the responsibilities that senior managers have when it comes to interviewing potential candidates, there is also a need for them to be fostering the type of reputation that will see talented people want to join the firm in the first place.

Much of a firm's reputation will rely on its commercial performance but individuals considering a new job also put a lot of store in the HR reputation that a business has and how it is perceived to treat and reward its staff on a daily basis.

This is not a side of the operation that senior management can afford to ignore and Young adds: "It is a big step to join a new firm and reputation is paramount. It is important to provide consistenty when dealing with staff. HR is important and word spreads quickly if you get it wrong."

Over and above the statutory rights that people have when it comes to being recruited and retained by firms and the way they should be treated, employers are also responsible for making sure they offer staff a safe working environment.

Reason

The health and safety regime in the UK has been overdone for many, although it is difficult to argue against legislations that have the wellbeing of each and every individual at their heart.

Given that insurance brokers deal in risk daily, it is perhaps surprising that their attitude to managing it in their own offices is not always as focused as they try to encourage in their clients.

All employers must have a health and safety statement and it needs to be more than just a policy statement; they need to have proper management and health and safety systems in place that make clear who is responsible, their obligations and the measures of risk avoidance taken.

It is easy for brokers that work out of an office to see themselves as low risk but there are numerous things that many small businesses forget, as Price explains: "Wiring not being covered or plugs sticking out; the warm air from a printer needs to be ventilated. Visual display unit (operating) people need to have eye tests sorted out. These are all things that need to be considered and they are long-term rather than short-term risks."

Price is acutely aware that there is already a good deal of legislation for brokers to deal with and, as such, he is not surprised that health and safety concerns often slip down the priority list. He explains: "The problem for brokers is that, because there is so much Financial Services Authority compliance to deal with, it can sometimes fall to the bottom of the list as it is not what they necessarily see as being the top priority. It is not a revenue stream for them and so it can sometimes sit on the shelf."

Dealing with the many vagaries thrown up daily by the rules and regulations governing the management of a modern day workforce is a full-time job in itself.

Ignorance is agony

The idea that this is a business area that can be left out is outdated and dangerous and, unless senior management are prepared to embrace the challenges that managing staff effectively throws up, they will end up paying the price for refusing to take this on.

Morris sums up the situation well when she concludes: "I work closely with the senior management team, supporting and assisting them. It's important to be involved early on in the decision-making process to help avoid any pitfalls along the way. It is not possible for everyone to imagine every single outcome to a situation involving staff. HR brings a different view to the running of a business."

This is not a side of the operation that senior management can afford to ignore and Young adds: "It is a big step to join a new firm and reputation is paramount. It is important to provide consistenty when dealing with staff. HR is important and word spreads quickly if you get it wrong."

Over and above the statutory rights that people have when it comes to being recruited and retained by firms and the way they should be treated, employers are also responsible for making sure they offer staff a safe working environment.

Reason

The health and safety regime in the UK has been overdone for many, although it is difficult to argue against legislations that have the wellbeing of each and every individual at their heart.

Given that insurance brokers deal in risk daily, it is perhaps surprising that their attitude to managing it in their own offices is not always as focused as they try to encourage in their clients.

All employers must have a health and safety statement and it needs to be more than just a policy statement; they need to have proper management and health and safety systems in place that make clear who is responsible, their obligations and the measures of risk avoidance taken.

It is easy for brokers that work out of an office to see themselves as low risk but there are numerous things that many small businesses forget, as Price explains: "Wiring not being covered or plugs sticking out; the warm air from a printer needs to be ventilated. Visual display unit (operating) people need to have eye tests sorted out. These are all things that need to be considered and they are long-term rather than short-term risks."

Price is acutely aware that there is already a good deal of legislation for brokers to deal with and, as such, he is not surprised that health and safety concerns often slip down the priority list. He explains: "The problem for brokers is that, because there is so much Financial Services Authority compliance to deal with, it can sometimes fall to the bottom of the list as it is not what they necessarily see as being the top priority. It is not a revenue stream for them and so it can sometimes sit on the shelf."

Dealing with the many vagaries thrown up daily by the rules and regulations governing the management of a modern day workforce is a full-time job in itself.

Ignorance is agony

The idea that this is a business area that can be left out is outdated and dangerous and, unless senior management are prepared to embrace the challenges that managing staff brings to their remit, they will end up paying the price for refusing to take this on.

Morris sums up the situation well when she concludes: "I work closely with the senior management team, supporting and assisting them. It's important to be involved early on in the decision-making process to help avoid any pitfalls along the way. It is not possible for everyone to imagine every single outcome to a situation involving staff. HR brings a different view to the running of a business."

Unions and management: working together

The voice of the modern-day worker has never been louder and those in senior management need to listen.

In April 2008, the Confederation of British Industry, the Trades Union Congress and the Department for Business, Enterprise and Regulatory Reform launched a joint project to describe the role of modern union representatives and the positive contribution that they can make to the workplace. The three parties aim to publish a joint statement about these issues around the end of 2008 after assembling evidence from a range of other organisations and experts. The joint statement will present case study evidence showing how management and lay union representatives have worked together positively. These real-life examples, drawn from specially-commissioned research, will also identify the benefits such an approach can deliver.

Source: CBI

The Jelf Group

The Jelf Group is on the march and, with over 30 acquisitions under its belt, it is showing no signs of slowing down. The company has also worked hard to grow its own business organically and, with such a strong bent on expansion, attracting, managing and retaining quality staff is going to be central to the firm's success over the coming years.

There are now over 1,100 employees based at over 30 locations in the group and so having a structure that can deliver the human resources and personnel needs of such a large number of people based over such a wide area is essential.

Allison Pymm is the group HR manager and she holds monthly, one-to-one briefings with both the CEO and the COO. Pymm also does a quarterly presentation to senior management to ensure that everyone is up to date with changes in HR, personnel and employment law issues.

Below Pymm, there is a team of HR professionals that has responsibility for various locations in the group. The businesses in the Jelf stable that continue as standalone entities have retained their own HR staff but they also work closely with the centralised team.

Julie Wills is an HR consultant within The Jelf Group and, for a business that is acquiring others, she says that there are many challenges to overcome: "We have to be very careful with the TUPE (Transfer of Undertakings - Protection of Employment) regulations; they are a very onerous set of rules that we need to be mindful of to ensure the people transferring to our business do so on the same terms and conditions that they were on before."

There are implications not only for the new staff coming on board but also for those already there and Wills says it is important for the group to ensure that everyone is on a level playing field as the business evolves.

Recruitment is also a major focus and, apart from simply hiring to fill specific vacancies, Jelf has implemented a policy that has seen a recruitment agency looking for the type of people it wants in its business; when they come along, the broker takes them on board even though there may not be a specific function available immediately for them.

Wills explains: "If we were a manufacturer then we'd invest in machines for the job we were doing. In our business, we have to invest in people and the way we work is to build our relationship with our recruitment agency. We will take people on even though we may not have a budget for them."

By taking a proactive approach to HR and personnel issues and making them a central priority, Wills says Jelf not only cuts out many potential liabilities but also makes sure that it can secure, retain and develop some of the best talent in the market, which in turn will give it significant competitive advantage in the future.