Mark Amos, general insurance consultant at Joslin Rowe's Edinburgh office, looks at why current mergers have led to reduced staff movement in the Scottish market
Scotland's general insurance employment market remains buoyant, albeit less so than, say, five years ago. There is a general feeling of fear, however, which has dampened ambitions and reduced staff movement across the board. The recent flow of mergers and acquisitions and the threat of further consolidation within the market has made the prospect of moving jobs or companies rather daunting – if for no other reason other than the fear of the “last in – first out” principle. Yet does this notion still apply in today's market?
From the employee's point of view, downsizing has had a significant impact on opportunities within the market – due primarily to geographical and travel issues. Candidates are generally reluctant to travel between the two major cities. The larger Glasgow market has diminished Edinburgh's status as a major centre for general insurance, and Glasgow candidates are no longer attracted to this smaller marketplace. On the other hand, from Edinburgh to Glasgow, it is more a matter of travel costs and commuting time. Unwillingness to relocate is clearly connected to the fact that employees are disillusioned with developments in the marketplace.They believe this has reduced the scope for career progression. They seem to treat their current job as if it were their last.
From the employer's point of view, there seems to be a dearth of new talent. Employers are now more likely to look outside of Scotland to source quality staff.
While these problems can create the wrong impression about the opportunities on offer, there is certainly a great deal of justified negativity. With all the recent market consolidation, training programmes have been virtually abandoned, since professional standards and qualifications are less important to companies focused on profitability and staff headcount. The quest for greater profits has also had a negative effect on remuneration. Employers are now under less pressure to pay higher salaries due primarily to the reduced number of competitors. There have been several redundancies within the major firms. More alarming still, a number of household-name firms have completely disappeared from the Scottish market.
Increasing redundancies have instilled feelings of insecurity. But it will generally be those who are no longer contributing greatly to the company who will be made redundant – not, contrary to popular belief, those who most recently joined the company. Past glories count for nothing in the current climate. Employers require staff who can drive the business forward in an altogether different marketplace.
Stagnation in the employment market also appears to stem from candidates' fears of moving from a large firm to a small one, or vice-versa. Both global and smaller independent firms have obvious advantages and disadvantages. Ultimately, though, the size of a company has little or no bearing on long-term career prospects and remuneration.
There are a number of things employers and employees alike can do to improve stagnation within the market. Movement will create movement, which will ultimately create more jobs. When experienced people leave a position, those vacancies will need to be filled, and so the cycle continues.
Greater commitment to staff and professional standards akin to those regulating other financial services sectors would also create more opportunities. The introduction of such standards would necessitate the implementation of structured training programmes and professional qualifications. Training can prove a great motivator because it raises the marketability of an employee.
However, staff should not be waiting until they are told to enhance their skills. Those most likely to climb the ladder will actively seek out training and other avenues for career development.
Employers need to introduce new ideas from a grass-roots level. Graduates, for example, may offer a fresh approach to their work and are usually very clued-in to the technological advances that are changing the face of financial services. Likewise, senior staff will have industry knowledge, experience and expertise that can be passed down to the fresh blood. In other words, companies should be looking for ways to improve their management of intellectual capital to optimise the contribution of staff at each and every level.
The Scottish market is suffering from an image problem that is giving employees a negative perception of their career prospects. The opportunities really are out there for those with the necessary drive and self-confidence. In time, the current feeling of apathy should pass, as we work towards a more mobile and focused market.