By DAN REYNOLDS, senior editor of Risk & InsuranceŽ
It's no wonder insurance brokerages raid one another unmercifully for talent; getting a brokerage shop up and running in the first place is so time-consuming.
"I mean from my standpoint it's a solid two, two and a half-year commitment, if not three," said David Alvarado, a managing principal with Edgewood Partners Insurance Center, based in San Francisco, who is very active in his company's recruitment efforts.
"When we do it I have got to look guys in the eyeball and say, 'This has got to be your No. 1 priority,' because every day there is another client fire, right?" Alvarado said.
And then there's the money. Besides the rookie's salary, there is as much as $100,000 in support for that young gun in the first year, according to John Rodgers, a Chicago-based managing director with New York-based SSA & Co., an operations consulting company, which works with a lot of companies in the financial services industry.
But with the changes that have struck the United States and the world economy these past two years, many brokerages are cutting their employment ranks to maintain margin and they just might not have the kind of time or money to develop talent.
The uneasy feeling that it creates is this. Are brokerages neglecting talent development, concentrating on short-term results at the expense of the long term? Are they, in effect, cutting into their muscle?
Because nowhere may the term "client facing" carry as much weight as it does in insurance brokering.
"And I think intelligent companies across the board are certainly seeing this. In insurance they are the ones that are recognizing that and looking at the distribution system not as their greatest cost of business but in some ways their greatest value," said David Niles, Rodgers' associate and the president of SSA & Co.
Whether one brokerage is doing a better job than another of recruiting talent is a vague science, to be sure. But let's play with a couple of numbers, just for fun.
In the 2011 Power BrokerŽ contest between the two largest brokerages, Marsh and Aon, New York-based Marsh nipped its Chicago rival in having the most Power BrokerŽ winners and the most finalists under the age of 40, by a count of 18 to 17. (Check out all of the categories and winners profiles here at the 2011 Power BrokerŽ Landing Page.)
Other brokerages that fared well included Atlanta-based Beecher Carlson, which had four winners and finalists under 40, and San Francisco-based Equity Risk Partners, which despite being a much smaller brokerage, had two.
LOVING THE GAME
Although the industry might not get high marks for recruitment overall, there are individuals who are passionate about that pursuit.
Aon's Christina Sikorski, a Power BrokerŽ in the workers' compensation category, is, at the tender age of 29, not only earning raves from her risk management clients, but also getting a charge from her involvement in Aon's Campus Champions program.
The program pairs graduates of schools with their alma mater in managing an 18-month training program for recent college graduates. "Unfortunately, when you say insurance, most people think of the Geico commercial," said Sikorski, referring to some of the reactions she gets from college students when she first engages them on the topic.
But the further Sikorski gets into her story, of how she works with actuaries to save her clients millions of dollars in collateral requirements, for example, the more she sees that light bulb go on in the eyes of young people and future industry prospects.
"I have to use my finance skills, I can use my negotiations skills, to become an advocate, a consultant, and a partner, that is a great advantage to our industry and I don't think people think about that," she said.
Arthur J. Gallagher & Co.'s Alexandra Glickman, a 2011 Power BrokerŽ in the real estate category, has been in the recruitment game a lot longer than Sikorski has, but remains committed and passionate about it.
Glickman, who is an area vice chairman and managing director-practice leader for Gallagher Real Estate and Hospitality Services, is a graduate of the University of California at Berkeley. And she focuses on the West Coast schools in her talent search.
"What I found out about the Pac-10 and the Cal State system is that people who are attracted to the Western United States do tend to have a little more of the pioneer spirit," Glickman said.
Being on the West Coast is also giving Glickman an opportunity to pick up talent in California's highly diverse culture. "California has a huge immigrant population, which to me is a part of the recruiting process in our industry that we have really missed the boat on," Glickman said. "There has been a lack of inclusivity, I think."
In looking for education attributes, Glickman does focus on people with degrees in applied mathematics and economics, but she also wants to see graduates with strong written and verbal skills.
"I want to make sure they can write and communicate because I think the old days of an insurance broker having to have a five handicap and hold their liquor, thank God those days are over," Glickman said.
On the other side of the country is Glickman's colleague Tony Abella Sr. Abella, a Power BrokerŽ finalist in the nonprofit category in 2009, is also passionate about recruitment. But Abella, a native of Cuba who fought against Communist oppression in his youth, doesn't think insurance owes anyone any favors when it comes to making the grade.
"Knowledge is something you can appreciate wherever it comes from," Abella said. "That's why it is so important for our industry to capture people who have a broad base of education, rather than find a person who cannot find a job and ask them, 'Can you sell insurance?' " Abella said.
"We are one of the few that would rather have somebody young and inexperienced," Abella said, of a Gallagher recruitment program that is almost 50 years old. "A lot of people would prefer somebody with experience. We have no problem with that, we realize that you have to spend some money bringing people in, but we get them."
IS THERE ROOM FOR HOPE?
But to Edgewood Partners' Alvarado, a company like Itasca, Ill.-based Arthur J. Gallagher is the exception rather than the rule. And as he ages, he looks behind him and says he doesn't see a lot of talent following him. For one, he said, young people today are a lot savvier with a greater sense of entitlement than previous generations. You can't just throw a bunch of leads at them and expect them to be energized by that, Alvarado said.
"What I call the 'Go get 'em tiger,' management style doesn't work anymore," he said.
"Twenty five years ago you read some books and you went to some classes and you went out there and you got banged around and you just kept going for it," Alvarado said. Young talent today is more sophisticated and isn't likely to go "wing it." They say, " 'I'm not going to go out there and do something I don't understand,' " Alvarado said.
Still, even though it isn't marketed well, the allure of insurance is there, even for those who took another path. "When you talk to guys from college or recently graduated, a lot of guys in software sales, a lot of guys in real estate, always say, 'If I really understood your business and had people come and talk to me about it, I probably wouldn't be where I am today,' " Alvarado said.
In selling the game, direct knowledge of the industry is always best, veteran brokers said.
"We found that unless people knew somebody in the insurance business most people would rather eat ground glass than work in insurance," Glickman said. "Which is so sad because it really is an incredible industry."
February 17, 2011
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