Many businesses are unprepared for age laws
But the insurance industry is starting to see the benefits of older workers’ experience
Despite the new laws against age discrimination that came into effect last October, a recent study found that many businesses are unprepared for them. The laws make it illegal to evaluate someone on the grounds of their age, meaning terms such as ‘office junior’
or ‘mature worker’ should not be used.
The study from the Recruitment Confidence Index, produced by Cranfield School of Management, found that almost a quarter of organisations still do not have an age discrimination policy and just 54 per cent provide training to managers. Stereotypical attitudes towards both older and younger workers are still prevalent, most of which are contrary to the facts.
The case for employing senior staff is, in fact, compelling. Older people generally change jobs less, demonstrate greater employer loyalty and possess genuine skills for the job. And the common misconception that older people are not IT competent is generally untrue – most people who have worked at all over the past decade will know how to operate a computer.
Then there is the vast skills shortage within the insurance industry. Mark Stephens, a consultant with insurance recruiters IPS Group, said: “Firms want graduates with a certain level of experience, but there simply aren’t enough coming through. The industry is waking up to the fact that there are already talented people out there with genuine skills and experience.”
David Rankin of BusinessHR, Hiscox’s free online HR service, urges employers to look carefully at their employment practices. “It is expected that [due to the laws] there will be eight times the number of age-related claims as there are currently for sexual orientation, religion and belief,” he said.
Consolidation fever
It looks as if the trend towards broker consolidation could be around for some time. A recent review of the UK market by Insurance Age found that, since 2005, a record nine brokers have disappeared from their Top 100 Brokers list as a result of acquisitions. It’s predicted that by 2010 there will be 2,500 brokers, compared with the current number of 3,750.
These acquisitions have made the top ten brokers even more powerful: they now control collectively £2.2bn of income in the market, an increase of ten per cent on 2005. To remain competitive, smaller firms are focusing on niche markets in the hope of exploiting areas where large operators can’t compete.
But the shift in strategy towards consolidation isn’t without its teething problems. Some brokers say that they’re being aggressively pursued by consolidators hoping to get them to sell their businesses; they receive several phone calls a week and are being bombarded by letters and direct mail. They hope the consolidators will soon realise that not everyone may be interested in selling.
Dear Editor
The value of outsourcing very much depends on a number of variables, not least the competence of the service provider, the financial cost of the service versus the cost of keeping the operation in-house, and the actual (as opposed to perceived) efficiency gains resulting from outsourcing.
Once a careful analysis of the above factors has been undertaken and it is decided that outsourcing is viable, the broker must take extreme care in ensuring that its relationship with the customer is not damaged. Customers like to feel that they have a relationship with their broker and will feel fobbed off if they are referred to another organisation, particularly in the context of ‘India Call Centre Syndrome’. No one can deny that the customer is unhappy with the trend for financial service providers to outsource in this way. As such, brokers will have to battle from the off to convince their customers that the outsourcing they have undertaken adds value.
I believe it should always be assumed that outsourcing is likely to instil feelings of not only confusion, but also irritation in customers. Outsourcing can add value, but only following reassurance, frank and honest information exchange and the customer being persuaded that existing relationships and service levels will not be compromised. Most importantly, it is vital that the broker is willing and able to step in and take control in instances where the service provider is failing. After all, the primary duty to the customer is owed not by the service provider but by the broker.
Matthew Dover ACII, RK Harrison Insurance Brokers Ltd
• Congratulations, Matthew, you’ve been chosen as the star response to last issue’s competition question: is outsourcing a valuable business tool or just confusing for customers? Matthew wins a £150 voucher for iwantoneofthose.com – will he splurge on Racing Grannies or perhaps choose a day driving a Ferrari?