As the industry continues to consolidate and organic growth remains noticeably stagnant, brokers may be tempted to cease searching for new business and instead poach opportunities from their peers.
Unfortunately, this practice isn’t new.
“The water is always churning, and there are always brokers operating in that mode,” said Thom. C.J. Young, CEO, Lundgren & Young Insurance Ltd.
Young believes that these market conditions make for a double-edged sword: brokers can be selective in choosing their ideal job prospects at any particular time, but too much mobility may create more problems than it solves.
“Employees now have much better choices because their skills are in such high demand,” Young said. “It gives you an opportunity to find a brokerage that allows you to build a large book of business because their competitor’s position is great, or if somebody’s working for a broker that is losing markets, it’s a good time to shop around for something else.”
As a result, brokerage owners need to be guarded against rivals who try to steal from them. Young discourages this, however, arguing that “there’s always a problem when brokerages start cherry picking other brokerages, whether that’s for accounts or salespeople.”
In fact, he believes that the practice may only hurt brokers’ earnings and revenue in the long-run.
“The grass may seem greener on the other side,” Young said. “While moving around may have the perception of a better outcome, disruption costs you, and your clients will be the ones twisted about here and there. This is especially true if you can’t find the products to match what you had with the other broker, even though you were told that you could.”
The best way to combat the trend, Young argues, is to simply reject the practice and focus attention instead on creating a work environment favorable to good business.
“It makes me realize I have to make my place of employment more attractive than competitors, which isn’t a bad thing, especially since competing fairly is what gives you the best outcome for you and your clients,” Young said.
