Broker Management Forum

Richard Adams: How have we got to the situation where there is a diminishing availability of talent. Has the industry dumbed down?

Anne Hudson: The industry has had to specialise because we have been looking at ways to fund other areas of inward investment, so everybody is looking to see how to get more from fewer people. That does not necessarily mean the industry has dumbed down. A lot of employees are specialising in particular areas and find that their skills are not as transferable as they used to be.

Steve White: I would certainly agree with that and would say it is cost efficiencies rather than dumbing down. However, the advent of computerisation taking over more and more of the back office functionality has led to the dumbing down of some staff and a reduction in numbers, which means the rest of the staff are specialising in more technical areas.

Richard Adams: Do you think that it is fair to say that many insurers, after the bout of mergers and acquisitions in the past 10 years, have become a bit slack when it comes to promoting careers in insurance, certainly at graduate level? And also with internal training programmes?

Anne Hudson: Well yes, and I will answer that on behalf of insurers. Recognising that we need constant new fresh blood coming into the industry, insurers have set up recruitment programmes. There are insurers that still take on graduate trainees and have a trainee programme. There are also insurers that have set up academies, so it is not all doom and gloom, there is a lot going on.

Steve White: I think insurers are doing very good work with the staff that they recruit. The problem that you highlighted there was the sector's lack of attracting what we would term weapons grade talent. My son is coming to the end of his first year at university and clearly there is work for the sector to be doing in making us look attractive to undergraduates and graduates.

Anne Hudson: Some research the Chartered Insurance Institute undertook recently demonstrated that 90% of graduates would not consider a career in insurance. So, if 90% at the moment are not even looking at our industry this surely represents the size of the opportunity to increase our talent pool. Other interesting statistics in this research showed that 75% of the time recruiters are not finding the right people - taking somebody who is almost right rather than the right person.

I agree there is a need to attract graduates into our sector and the CII is plAnneing a lot of work behind the scenes. There is a website industry portal in development, which is going to link up university web sites with the CII. The first phase is universities but later the second phase will be available to GCSE and A Level students too. What we are trying to demonstrate through this is an opportunity to use all sorts of skills and to attract people into the industry and dispel some of the myths that are out there.

Steve White: It is an interesting statistic that 90% of the students have not considered insurance as a career. One assumes that the remaining 10% considered it and said no, which could be a little bit of a concern. However, there is further light on the horizon. The work the Financial Services Authority has been doing on financial capability I believe has now led to a move to include financial capability as part of the mathematics GCSE syllabus.

So, we will have students reaching their fifth and sixth years in future hopefully more financially capable and therefore they may, as part of that process, be more willing to consider careers in the financial services sector. I think this could be 12 to 24 months away.

Richard Adams: Would you agree that there is a greater need for brokers to train now more than ever before?

Steve White: Insurers recognised a while ago that they were a fairly fertile hunting ground for brokers when it came to staff. Clearly, insurers have taken steps to ensure that the staff that they want to retain are being retained by both remuneration and career progression methods. I think it is an oversimplification to say that intermediaries have over relied upon insurers as a source of talent. It is not right to say either that insurers are their main or sole source. There are certainly attempts that insurers have made to retain their best staff, which have led to intermediaries having to change tack a little in terms of their recruitment policies.

Anne Hudson: It is very much down to all of us as individuals to promote the industry we work in. Everyone is keen to say that something should be done but we are all advocates of the career that we are in. Brokers can do a lot locally to promote what they do to help the local community and to find examples of good deeds their staff might have done which also helps to do to raise their profile.

Richard Adams: A question has been submitted by Fusion Insurance, which highlights a concern brokers have about training. It says 'should brokers be spending more money on training programmes? If so, how can they be confident that their new recruits will not disappear soon afterwards, effectively leaving them thousands of pounds out of pocket?' Steve, what do you make of that?

Steve White: I would not suggest brokers have to spend more money. I think brokers may need to be a little bit more focused on where the money is being spent. From a regulatory angle, the FSA's interest in training is around the word competence and it is down to the authorised firms to ensure that all their staff are competent. Competence is the appropriate combination of knowledge and skills to do the job for which the individual is employed. Importantly, it is knowledge and skills, not just knowledge.

I would suggest that we as a sector have been very good at giving our staff the technical knowledge, but it is the skills that go with it that are just as important. The ability to communicate, negotiate, to work as a team - key skills all members of staff should have - and I believe our sector has been very light on that.

Richard Adams: Is cost one of the fear factors brokers have about training, Anne?

Anne Hudson: Yes, there may well be a fear factor but the answer comes back to brokers' strategy. They need to have a strategy for recruitment, just like they have a strategy to acquire and retain clients. If you have an aspiration to be a magnet for talent, that will help you acquire, retain and develop your staff. Retaining staff is all about giving them the right praise and recognition for the work that they are doing. It is about giving them the challenges they need. It does not have to be financially motivated because a lot of people are very, very keen for their skills to be recognised and to be given an opportunity to demonstrate that they can excel.

Steve White: In the same way that customers move from broker to broker occasionally, it is inevitable that staff will. Anne is right it is about attracting and retaining the talent and retaining it comes from developing them as individuals through a career path.

Anne Hudson: I also think that everybody has got to recognise that a zero turnover of staff is not healthy. You need new people coming in to your business with fresh ideas and it is gratifying that somebody has been developed by you and is moving on elsewhere, because the insurance industry is notorious for the same people coming up and running into each other again in different guises later on in their career. So, somebody who you have helped in the past may come back and be able to help you in the future.

Richard Adams: Steve, could you run through some of the nuts and bolts of the FSA's requirements. And do you think that actually the FSA's training requirements are timely and much needed, given the situation as discussed?

Steve White: Yes, I would be happy to do that. Could we just nail one fallacy first of all? Training and competence is not necessarily a regulatory issue - it is good business practice. On the basis that no one would hold their hands up and say 'yes we willingly employ incompetent staff', the notion that your staff are competent is a basic requirement. In terms of what the regulator wants, the regulator has a training and competence source book, which contains two chapters.

The first chapter sets out guidance such as the commitments that the firm has towards the training and competence of its staff. In very simple terms, it gives guidance around the attaining, maintaining of competence, the appropriateness of the training.

Chapter two of the training and competence source book is a little bit more prescriptive. It contains detailed rules but only in respect of staff who give advice to retail customers. Then there are clear rules around recruitment, attaining and maintaining competence, training, and so on. So, how do brokers demonstrate that staff members are competent? I would suggest that there are five steps.

You should have a job description for each member of your staff, so what are they employed to do? From the job description, you should pull out the key competencies, so what skills and knowledge does an employee have to have to fulfil the job description? You then measure them, their performance, against the competencies. Where you find a gap, you provide the training and so we go back to that fact that it will cost you more to train but you will be more focused in the training you provide, as you will be crossing that gap.

Lastly, and most importantly, you need to record it, because in all things regulatory if it is not written down, it does not happen. From my three years at the General Insurance Standards Council, I can tell you that the major breach the GISC found with regard to training and competence was the physical evidencing of what had been happening.

Richard Adams: Does the British Insurance Brokers' Association and the CII have any new initiatives to combat the lack of fresh blood coming into the industry?

Anne Hudson: I will start first by making a minor Anneouncement about the CII's industry portal and more details will be Anneounced at the CII conference on the 4th of October. However, there are plenty of other support services that the CII provide through broker assess, CII education programmes and also working with insurers for their own academies and accredited programmes.

Richard Adams: So from October there will be a portal?

Anne Hudson: Yes. The web industry portal will be supported by a full-blown marketing campaign and it will contain case studies, job profiles and actively promote companies that run training schemes. We are piloting it initially with the top five insurers but it will be of benefit to all insurers. The target initially is 400 universities through their campus careers advisors.

Steve White: Biba is also doing a lot more work in that area. We have just designed an introductory level business skills one-day course that we are launching in London in the autumn, called the Biba business skills model. There will be four dates that we will be Anneouncing fairly shortly for that. We think it will be of great interest to our members.

Richard Adams: Can I have your concluding remarks, please.

Anne Hudson: I think that we all have responsibility for promoting the careers in the industry that we work in because there are a lot of good messages that we can give to people.

Steve White: I think we have hopefully given the listeners a feeling that there is a lot of activity going on. However, there are things that can be done out in the local communities by individual firms both for their own and the industry's good.

THE PANEL

Richard Adams, Editor, Professional Broking magazine

Anne Hudson, National Broking Relationship Manager, Ecclesiastical

Steve White, Head of Compliance and Training, British Insurance Brokers' Association

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