Semi-Annual 2021 Salary Report: The Genie is out of the Bottle
Updated: Dec 13, 2021
Remote Work: The Genie is out of the Bottle
What a difference six months make. Insurance compensation levels are going through the roof. Clients are hiring folks who live in a different state. Unbelievable.
Yes, the Genie is out of the bottle. It really did not hit me until two things happened: First, my data analytics guy came running into my office on Thursday waving the results at me with the salary numbers of the first half of 2021. Nearly out of breath he tells me, “Hey boss, you are not going to believe this…salaries are already up 10.3% over same period last year!” I told him to run the numbers again. Same result. I then mulled over some recent placements. Hell yeah, salaries really had gone up. It made sense.
Secondly, just last week, one of my very best client hiring authorities (CEO of a Top Ten WDC brokerage house) called me from his vacation home in Florida. Now this guy had been one of the most adamant anti-remote work at home clients in my entire portfolio last year. Up until COVID-19, he was the one client who would NEVER allow anyone to work remotely even for one day per week.
So now? “Rob, looking back, you were right. I had it all wrong. Working remotely has been the best thing that has ever happened to our business. Productivity is off the charts and everyone is happier! No more commuting into the Beltway!”
He went on to tell me how he had taken up golf at his vacation home in Florida during the past year and how much more productive and happier even he was. Amazing. We just hired four more experienced account managers for him who live in southern Virginia and in an adjacent low cost state for 45% of the cost it would have been for someone within commuting distance of his WDC beltway office. The result? Two of the four new hires were essentially for free!
And, then, of course, there is the other side of the coin. Got a call from another client informing me that all hands had to be back in the office no later than July 15th. Wanna guess what happened? You guessed right. Three account managers walked out the door within the week to take positions at firms offering remote work options. My recruiting staff told me in a meeting just yesterday, “Rob, this is gonna be a tough search. Nobody wants to fight that Beltway commute anymore.” I informed the client earlier today. The reply? “Sorry, Rob. Company policy.” My response? “This is going to take awhile and come at a significant compensation premium.”
I have a handful of similar stories.
So the bottom line? Call your staff back and you are going to have some very unhappy campers. And, yes, you will be calling me to replace some of your super stars. Guaranteed.
Getting back to my first point above: why the significant salary increases now after several years of near flat compensation growth? I don’t have any statistical data to back up the reasoning behind this other than what we hear from the candidates. Here is what I am hearing:
“Given the uncertainty surrounding the economy and Covid-19, I am just not willing to change jobs and exchange a “known” for an “unknown.”
I hear, “Things cost a lot more now than they did last year and if I am going to make a change, it better be for a lot more money.” People seem to be much more focused on money now rather than qualitative factors and many clients just don’t have the expanded budge to increase salary levels. And if you change your salary structure for one person, you change it for everyone. Because the staff talks. Everyone finds out how much everyone else is making.
Firms that require their staff to be in the office five days per week are paying significant premiums to replace those who bolted out the door to work remotely. Some are in desperation mode right now. I know because some are my clients.
There is a chronic shortage of people, particular young people with degrees, who want to work in the insurance sector. They want to work in technology or real estate it seems now. Insurance doesn’t have that “pizazz” that so many crave nowadays. And then there are those that just don’t want to work anymore…I think they are called “social media influencers – LOL.”
So that’s it until the next report comes out at the end of the year. Meanwhile, the little mom & pops are now getting swallowed whole by the big boys. Lots of cheap private equity money out there chasing deals now. But this is a topic for another day and another blog.
Best of luck to all the rest of the way in 2021.