For the casual observer of the NBA playoffs, it may appear as though the Golden State Warriors are a good team playing well together at the right time. If you really dig into it, though, you will find that a big part of the reason this team is even together is a discussion that happened a few years ago. The league met with the players’ union to discuss a new salary cap. That was the true trigger point to a path for the Warriors to open up enough cap space to sign Kevin Durant, who is likely their best player right now on a loaded line-up.
Here are a few lessons we can learn about insurance recruiting from the Warriors' ascension to a possible NBA dynasty:
1. You have to be willing to spend, especially if the money is available.
For the past few years we have seen companies and agencies alike open up their bank accounts to go after top insurance talent. In some cases they even do it to go after mediocre talent, as that is the best available in a competitive market. The NBA has brought in more revenue for owners in the past several years, and finally they are beginning to share it with players. Beyond the Warriors, you can easily find middle-of-the-road players signing giant extensions. It is simply the world we live in now. The market for qualified insurance candidates is really tightening, so to counteract that you many have to loosen the purse strings.
2. You must tell everyone to set ego aside.
Imagine being the unanimous league MVP (Steph Curry) on a team that won an NBA record 73 games and then being asked to make less money than the big-time free agent your team is wooing... If you are really seeking top talent, you will likely have to pay top dollars. Perhaps even stretch a deal to an uncomfortable level that could impact internal equity. While you don’t want to make a practice of over-paying, you may have to go north of a traditional salary range to snag the best candidate. The supply/demand curve is definitely bending back toward the candidate after a long stretch of companies being able to dictate terms unilaterally.
3. To clear cap space, you may need to let a previously important team member go.
I don’t take this lightly, but in some cases it can be true. If you are hanging onto a producer or sales leader that has been mired in mediocrity for a long period of time, it may be a good opportunity to sit down with them and have a hard conversation. They will either take it well and start producing at a higher level again, or not take it well and likely try to find a new opportunity. I am quite certain that it hurt some of the Warriors’ players and coaches to see a player like Harrison Barnes leave to become a key part of another team. But it was his time, and everyone is in a good place now. Although I do wonder if Harrison would rather be playing in the Finals right now than watching from home...
4. Even role players will want more money.
As I just mentioned, the Warriors lost a few players in the recruitment of Kevin Durant. Which means they had to find some new pieces for their bench. Although some may be chasing a ring later in their career, I guarantee you that no player wanted to play for free to help bring another trophy to Golden State. Furthermore, their agents did not want to see their clients playing for free. Because of these circumstances, the Warriors had to find a way to pay them too. Similarly, you may need to hire an additional account manager or client support person as revenues grow. While doing that you certainly want your sales staff and clients to be happy along the way. To get the right people on board, you are likely going to have to stretch some budgets to get those staff members. I recently had a client with one opening interview two great candidates. Both of whom were above the originally planned salary range. Know what they did? Hired both and gave them top dollar. Do you think for a minute that goes unnoticed by the sales staff that has been charged with growing by 15-20% this year? They now have the tools and resources to do their job more effectively.
The bottom line? The current state of the economy is such that you might have to pay to play. Others are doing it, so your choice is watch from the sidelines or hop in the game and try to be a trend-setter, not a late adopter who finds out too late that all of the good talent is already gobbled up.
Chris Winterboer, CPC, RHU