September 17, 2021
Building an Executive Search Strategy Starts With These 10 Questions
by Mary Newgard
AmTrust Financial’s report The Impact of the Aging Insurance Workforce cites, “Nearly 400,000 employees are expected to retire from the insurance industry workforce within the next few years.” Senior leadership vacancies are the biggest challenge facing insurance organizations in 2021 for a few reasons:
- Most insurance organizations operate a flat organizational structure.
- The smaller percentage of executive positions means less emphasis on or access to executive development programs.
- The insurance industry has a branding problem with millennials (born between 1981-1996).
- Millennials “do not find a career in insurance interesting,” cited Valen Analytics Gen Y This severely limits the number of mid-career professionals available to promote internally.
- Insurance organizations lack recent experience with executive hiring.
- It’s not uncommon for carriers and brokers to tell me they’ve contemplated an executive hire for 12-24 months prior to formally constructing a search. Such a long wait to get started hampers their ability to attract and retain experienced leadership talent.
If your company is uncertain about where or how to begin an executive hire, here are ten questions that will help you formulate a recruiting plan.
#1- What Is Our Timeline? When will you panic that you haven’t filled the position? Your search should launch 9-12 months before this date.
#2- How Does This Fit into The Org Chart? Your business has grown & evolved since the current executive was hired. Now is the time to decide if this role has the same reporting structure, or if this new hire has a domino effect with the organization.
#3- Will There Be Overlap in the Role? Prospective candidates ask how long their predecessor will remain with the company after they are hired and if that person will provide training and mentoring.
#4- Can We Promote from Within? This should always be your first choice for several reasons- timing, culture, cost retention and familiarity. Do not start an external search until all internal options are vetted.
#5- What Communication is Necessary? Confidential or public knowledge, make the decision based on how vulnerable the company becomes if the news is publicized; employee and revenue retention being paramount concerns.
#6- Do We Engage Outside Help? The chance of hiring an external candidate is high. Can you find this person through your natural networks? Can you devote internal resources to direct recruiting? Once your networks are tapped out, you need to enlist help from a professional consultant. Start the RFP process with executive search firms ASAP.
#7- Who Do We Want? The talent chasm makes finding an exact replica difficult. Build your profile to find a #2 or #3 in another company so you can entice them with a promotion. Besides where they rank organizationally, a well-rounded profile also accounts for total experience, location and insurance expertise.
#8- Are We Open to Relocation? Before you hire from outside your company AND community, you need to feel certain someone can assimilate for the long-term from another part of the country, culture or way of doing business.
#9- How We Will Interview? The pitfall of an important search is that you feel you cannot hire quickly. In response, you need ‘a lot of comparative candidates’ or ‘several rounds of interviews’ before making a hire. This simply isn’t realistic based on market conditions or candidate engagement. Determine your interview process before you meet one candidate. This way the plan is fixed based on your needs and does not vary by each individual person.
#10- What Will We Pay? The insurance industry doesn’t publicize a lot of data on competitive compensation. You will only know what you should pay once you start interviewing candidates. However, you must create an outline at the start of the search to include a salary range, incentive-based compensation, relocation assistance, signing bonuses and extra perks pay.
“Ask the Insurance Recruiter” is a monthly column written by Mary Newgard, Partner and published in partnership with Insurance Journal Magazine. Visit Insurance Journal Magazine’s website for a complete list of previous articles. For questions and comments, email Mary at email@example.com.