Why smaller brokerages have an edge in the talent war

Smaller brokerages have a competitive advantage in some instances when it comes to retaining talent as they potentially have more flexibility than their larger counterparts, a recruitment firm executive told Canadian Underwriter.

Smaller brokerages can sometimes offer employees greater access to promotion, client contact or more responsibility, said Mark Fenwick, senior vice president, corporate and professional services at Impact Recruitment, a Vancouver-based multi-disciplinary recruitment firm with an office in Toronto.

“It’s really going to come back to what the employee experience [is] since you might not be able to keep everyone,” Fenwick said in an interview. “If [smaller brokerages] are able to understand why their employees stay with them and communicate what they’re looking for in a working relationship and what the future holds for that individual… they have more flexibility, potentially.”

Fenwick discussed a variety of topics, including the ‘war on talent’ in the insurance industry, counteroffers, how brokerages are rethinking compensation packages and talent retention in smaller and larger brokerages.

Transparency of communication and building trust is key in smaller brokerages, he said. “From a retention perspective, people are far less likely, or people will leave at a slower pace if they like and trust those around them,” Fenwick said. “Even if maybe their salary isn’t as high, it will be a lot harder to leave an employee that you’re bonded to versus if that’s not there, then it’s a far easier decision.”

As a blanket rule, there also tends to be tighter cultural aspects in smaller organizations compared to larger ones, where you can end up with subcultures within the wider culture, Fenwick said. But on the flip side, if someone joins a smaller organization but doesn’t fit the culture, “any problems associated with that become apparent far quicker than they would in a larger space.”

As well, larger brokerages have much more infrastructure to fall back on in terms of replacing someone or having other people pick up the work. There also tends to be better access to compensation and benefits. That said, “larger organizations can be more rigid in terms of a decision-making process and the parameters of what they can and can’t do because of the ripple effect,” Fenwick said. “You’re not just making a change for one person, you could be making a change for thousands of people.”

In early February, Impact Recruitment released its 2023 Salary Guide: Insurance Edition for the Greater Vancouver and Greater Toronto Area markets. The report found, among things, that demand for skilled insurance professionals remains high.

“Unlike some other sectors in the current economic climate, insurance… still really does seem to remain a candidate-driven market where there are more jobs available than qualified candidates, and candidates have options,” Fenwick said. “That may have shifted in other areas, but insurance is still red hot from a candidate perspective.”

Feature image by iStock.com/courtneyk