Government statistics show that over the last 12 months or so, wage inflation has been around 2%. As...
Government statistics show that over the last 12 months or so, wage inflation has been around 2%. As we all know statistics are a collection of items or values which are more often than not aggregated together to arrive at an average figure.
So it is with salaries in the insurance sector. We are seeing an array of mini trends ranging from salaries being driven down in some sectors, to significant increases in other areas. What is really happening?
Salaries continue to rise less quickly in the general insurance sector. In personal lines there has been very little movement. This is in some respect due to the intense competition for business which has driven down margins and kept pay demands suppressed.
The removal of tranches of managerial or supervisory staff has in some cases led to responsibilities and authorities being pushed further down the line.
In the financial services sector the continuing demand for people in almost every area has led to a definite upward trend. In certain sectors the rule of supply and demand has driven up earnings significantly.
Pay is important and tends to be the initial focus. However some trends in the area of benefits can have far reaching implications. This is particularly so for pensions and it is certainly true that most people have relatively little interest in pensions until they approach retirement.
Perhaps this is the reason why the move away from final salary related (or defined benefit) pensions to money purchase (or defined contribution) arrangements has passed through with relatively little comment. Even some of the major pension companies are now only giving money purchase pensions to new staff.
Smaller employers always had difficulty in giving what amounts to an open ended commitment but it is sad (if understandable) that major insurance organisations have started to reduce the most valuable benefit. On the other hand there is a trend towards better benefits in other areas.
Both large and small employers are increasingly providing some form of profit share. Although the government-approved Profit Related Pay schemes are coming to an end, most of them will be replaced with similar arrangements and many "informal" schemes exist.
Healthcare by way of Private Medical Insurance is a benefit which is now often seen as part of the package.
Discounted house purchase facilities have almost disappeared, largely because of the huge burden which companies were carrying when interest rates soared to 15% in the mid 1980s.
With reductions in interest rates generally to today's more modest levels, coupled with greater job mobility, there is less demand from employees for what was once regarded as a very significant perk.
One overall feature which will undoubtedly increase, particularly in large organisations, is the introduction of cafeteria benefits where the employer provides a range of benefits but with an overall monetary limit.
The employee can then, for example, choose to spend more on healthcare and less on a car, or sacrifice some holiday entitlement and gain more in legal cover.
The benefits package has changed very significantly during the past 10 or 15 years. Who knows what the next decade might bring?
Once you have drawn up your "shortlist" you need to decide on when you would like to interview the candidates. The timing can be crucial to the interview going well for both you and the candidate.
Try not to schedule an interview too close to the next one or you could find yourself having to rush at the end to make it to the next candidate. Allow yourself up to two hours per interview to give you the time to get the best out of the candidate.
Do not worry if you find that you ran out of time and you need to ask more questions, you can always ask their to come back for a second time. Do not forget the interview process is long and getting it right is vital. Getting it wrong could cost you over £1,000,000.
Corresponding with candidates is very important. Confirmation of an interview can be done by telephone but must be followed up by letter. Include a map of where your office is. If possible send them some information about the company which they can read. This can say so much about your organisation and make the candidate feel positive about the interview.
The next stage to consider is where is the interview going to be held. The worst place to hold a meeting is at your desk in the middle of an open plan office. The most suitable place is a meeting room or office. If the room has windows, make sure you sit the candidate with his/her back to them so at least they will not be distracted.
Before you eventually meet the candidate read through their CV. Make sure you have a good understanding of their background and questions you would like to ask.
Do not try to interview someone cold, even though you think you are a good interviewer. It is always better to be prepared, there is a good chance you will miss something if you are not, which more than likely will be important.
Frank Gaunt at Frank Gaunt Associates
FCA consultation response
MoneyLens to be edited by former Mail on Sunday journalist Vicki Owen