There’s no question that Canada is at a labour crossroads. Nearly every province in the country is experiencing a shortage of labour in one or more sectors of the economy and employers — especially small and medium-sized businesses — face an ongoing struggle to recruit, train and retain workers who have the skills needed to ensure the long-term viability of the enterprises they have worked so hard to establish.
Every manager of human resources knows how hard it is to find skilled, dedicated and loyal employees and the costs associated with training those individuals and keeping them happy enough to stay with the company. It’s no easy task. The standard incentives of generous remuneration and benefits no longer suffice on their own. There will always be another employer who can offer a higher salary or a greater breadth of benefits. That’s why it’s important for employers and the individuals in charge of recruitment and retention to think strategically and creatively about how they will retain staff within their organizations and ensure they have the human capital necessary to take the business into the future.
The labour dilemma is highlighted in the media most commonly with reference to the construction and engineering, health care and education sectors. While these industries undoubtedly face significant challenges, they are not alone. Every industry is affected to some degree.
In the $116 billion insurance industry, the conundrum of filling in the void soon to be left by retiring baby boomers is felt most at the senior managerial level. In fact, recent research from the Insurance Institute shows the industry is set to lose approximately 20 per cent of it senior management in the next two years and more than 40 per cent by 2017. To exacerbate the problem, an estimated 32 per cent of middle managers are also expected to leave in the next seven years.
The loss of these individuals and the expertise, knowledge and business management skills they possess will have an enormous impact on the way insurance is sold and the way consumers manage their policies.
Nowhere is this problem more prevalent than in the nation’s insurance brokerages, the vast majority of which are small, family-run businesses with limited resources to train brokers to rise through the ranks and succeed the current cohort of senior managers or partners.
Brokers are invaluable individuals. They are the face of the insurance industry and serve as the front line of customer service, providing consumers with the information they need to make the insurance choices that are best for them. Approximately three-quarters of insurance in Canada is sold through brokers, which means they are also a critical sales channel for Canada’s numerous insurance companies.
Many of these brokerages face increasingly stiff competition from other distribution channels that now have a growing presence in the insurance market.
It is, therefore, imperative that insurance companies begin paying attention to the crisis these brokerages face and step in to help them overcome these obstacles. They must recognize that succession planning is not something that is necessarily on the minds of the brokerages’ partners and managers. In fact, only half of Canada’s brokerages with fewer than 100 employees are currently undergoing a succession planning process.
That’s why RSA Canada chose three years ago to invest $1 million into a special training program for its own brokers. The Making Partner program was designed in collaboration with the internationally renowned Queen’s School of Business to provide brokers with the leadership skills and business acumen needed to help them rise through the ranks within their brokerages. In addition, the program offers a personalized development plan and an alumni program to allow graduates to maintain relationships and learn from one another.
Candidates interested in the program apply and their application is reviewed by a third-party panel — including two representatives from provincial broker associations, a representative from Queen’s and two industry veterans — who decide who will be accepted.
In its three years, the program has already produced 50 graduates with another 18 who are expected to complete the course in 2010. Yet numbers aside, it’s the personal success stories of the graduates that truly illustrate its effectiveness.
Take, for example, Chris Ball, who began his insurance career at Reliance Insurance Agencies Ltd., a brokerage his father founded in 1980. Chris went on to work in New York for some of the largest insurance brokerages in the world and then returned to support the family business. Like many brokerages, Reliance had a dearth in staff needed to take over the management of the business in the future.
Chris applied to the Making Partner program in 2008. There he learned the skills he needed to take him to the next level within the brokerage and give his father, the brokerage’s CEO, the confidence he needed that Chris had a strategic plan for the business; that Chris could make the day-to-day noise of the business go away.
After graduating from the Making Partner program, Chris subsequently went on to become a partner in the brokerage, providing it with greater potential and opportunity for success.
Programs like Making Partner are an excellent example of how industry partners can collaborate for mutual success. To date, no other insurance company has offered a comparable solution to the members of its sales channel.
If the insurance industry is to continue to thrive, it will need more stories like Chris’s; stories that illustrate how forward-thinking program can help establish a new generation of leaders to take their businesses into the future. Failure to do so can have far-reaching consequences that extend well beyond the insurance industry itself.
Shawn DeSantis is Senior Vice President, Commercial and Personal Insurance of RSA Canada
