Prudential tries to soften blow as it axes 2,000

Posted On May 12 2021 by

first_imgPrudential has promised to try to cushion the impact of itsdecision to cut 2,000 jobs over the next 12 months through natural turnover andredeployment.The company announced last week that it is shedding the jobsbecause it is to replace its entire direct sales force with a much smallerspecialist staff of qualified advisers, creating a saving of £135m a year.John Elbourne, chief executive of Prudential’s UKoperations, said, “The drive for lower pricing in the UK means it is no longereconomic for us to maintain a large, salaried ‘face-to-face’ workforce.Technology is revolutionising our industry and customers are accessingfinancial products and financial advice in different ways.“We will take every step to minimise the number of job cutsthrough natural turnover and redeployment, and ensure the best possibletransition and support for everyone affected. “We have started a consultation process with employeerepresentatives over these proposals.”Prudential is to invest in its telephone and Internetservice to try to secure new sales.The present sales force of 1,400 will be replaced by asmaller specialist force who will provide a face-to-face financial planningservice.Dave Parsons, regional officer for the MSF, is unhappy withthe way Prudential made the announcement. He said, “We were particularlydisappointed that we were not consulted until the morning of the announcement.“At the moment it is a proposal but as soon as it goes intothe public domain it is much more difficult to influence.“We will be examining the proposal in detail and making surethey give us all the numbers. We will try to keep as many people as possiblebut it is an extremely sad day.” Previous Article Next Article Prudential tries to soften blow as it axes 2,000On 20 Feb 2001 in Personnel Today Comments are closed. Related posts:No related photos.last_img read more


Q and A

Posted On May 12 2021 by

first_imgQ and AOn 1 Apr 2002 in Personnel Today Comments are closed. Related posts:No related photos. Previous Article Next Article The employment law team at Boodle Hatfield answer questions on workplaceissuesFlexible working rights Q I have heard the Government is going to introduce new legislation aboutflexible working. Will this mean that employees will have a right to insist onworking part-time? A In November 2001, the Government announced that it proposed tointroduce the right for parents to request part time or flexible hours. Theproposed legislation is the result of an investigation undertaken by the Workand Parents Task Force into how to meet parents’ desire for more flexible workpatterns in a way which is compatible with business efficiency. However, thelegislation will only allow parents the right to request part time work. Itwill not give them the right to insist on part-time working. The main points of the proposed legislation are: 1. Only employees with a minimum of six months’ service, who are parents ofchildren under six or disabled children under 18, will be entitled to requestpart-time hours, and only for the care of the child. 2. All employers, regardless of size, will have to consider requests forflexible working in accordance with a procedural framework which is, insummary, as follows: – The parent makes a request in writing, setting out the working patternthey want and how it can be made to work. – The employer considers the business case for accepting or refusing therequest. – A meeting is held within four weeks to consider the request, at which theparent will have the right to be accompanied – as in disciplinary/grievancehearings. – The employee should use the employer’s grievance procedure if they haveany complaints. – The employer should write to the parent with a decision within two weeksof the meeting. If the request is rejected, the parent will not be able to makea further request until one year has expired. The parent has the right toappeal the decision in writing within two weeks. 3. If an employer does not comply with these procedural steps, the parentwill be able to raise a grievance, ask Acas to intervene with mediation or,ultimately, bring a claim to an employment tribunal, with compensation possiblycapped at four weeks pay. However, a tribunal can only consider: – Whether the procedure has been properly carried out. – Whether the business case has been explained to the parent. – Whether, if a parent has challenged any facts, these facts are true. 4. If a tribunal does find any procedural or factual defects, it can sendthe case back to the employer to reconsider and award compensation to theparent. However, so long as the employer has established a business case forthe refusal (the kind of reasons that the new legislation gives for employersto justify rejecting a request to work part-time are the burden of additionalcosts to the business, inability to meet customer demands, etc) and held theappropriate meetings, the tribunal will not be able to examine the employer’sreasoning or conclusion behind their decision. Therefore, if employers takethese steps it is unlikely that a parent will have any real scope to challengethe refusal of their request work part-time. Sonia Velton Disciplinary procedures Q What will the impact be of new statutory disciplinary procedures? A Next year, the Government’s Employment Bill will introducestatutory disciplinary and dismissal procedures (DDPs) which would become partof every contract of employment. In short, employers intent on dismissing any employee will have to set out,in writing, a statement of the relevant issues to the employee, have a meetingon the subject, and allow the employee, if he or she wishes, to appeal. Once anemployer has complied with these formalities, it may be hard for an applicantto show that his or her dismissal was procedurally unfair. The proposals are not entirely clear as to how they would work in practice,but it seems that either party not complying with those obligations will be inbreach of contract and may be prevented from bringing or defending proceedingsin the tribunal. This could mean that an employer dismissing an individual inbreach of the DDP will find that all post-termination restrictions (egnon-competes) will be unenforceable. Any dismissal which ignores theseprocedures is likely to be automatically unfair, with a minimum compensatoryaward of four weeks’ pay for the employee. The employment tribunal will also beobliged to increase (or decrease where appropriate) any compensation awarded bybetween 10 per cent and 50 per cent. The proposals appear to favour the employer by giving employees less scopeto claim any dismissal was procedurally unfair. There will also be greaterhurdles for applicants in bringing tribunal proceedings by virtue of theobligation to appeal against a disciplinary decision, or raise a grievance,before instituting such proceedings. James Lynas Easing the burden of stress Q I have heard that a case on stress has been decided recently, makingthings easier for employers. What are the main practical implications of thiscase for employers? A The case is Sutherland v Hatton and it was a Court of Appealdecision and thus a very authoritative ruling. The main points are: – Do not assume that any particular job makes people more or less vulnerableto stress and/or psychiatric illness, although employers ought to pay properattention to the risk assessments which they should be compiling under thehealth and safety legislation. – If any issue occurs which might give rise to any concerns over whether anemployee is stressed, the first thing an employer should do is talkconfidentially to the employee. Broaching the situation will give protection tothe employer both in terms of making it more difficult to show that theemployer was negligent, and also gives the employer most chance properly toconsider reasonable adjustments under the DDA. This decision seems to suggest that if an employee tells the employerinformation about his or her medical condition, this can be usually accepted onface value, unless there is something which clearly shows it is wrong. This ishelpful for employers, as it may do away with some of the need to get medicalinformation, in terms of negligence and just possibly for DDA cases. As a result of the consultation with the individual, the employer shouldstrongly consider any adjustments which might be made (‘without movingmountains’), both to satisfy the duty to make reasonable adjustments should theperson turn out to be disabled, and also in order to avoid any claim ofnegligence. However, this case makes it clear that an employer would not beobliged to dismiss or demote an individual if they wanted to continue doingtheir current job. Offering confidential counselling, leading to referrals where necessary,appears to be almost now a complete defence against a negligence claim. Wherefinancially possible, all employers should strongly consider adding thisbenefit to employees’ packages. However, it might be important for employersnot to know both what is discussed in these confidential counselling sessionsbut also the fact they are taking place at all – to avoid some implication ofknowledge of disability under the rather stringent disability case law. When faced with a problem of psychiatric illness/stress, employers shouldtake whatever steps are reasonable, without going overboard. Steps which have adramatic and potentially detrimental impact on other employees are unlikely tobe reasonable, and thus unlikely to be obligatory for an employer to take. Russell Brimelow Quality time with children Q The Government has said that it is committed to ensuring employees canspend more time with their young children. What exactly is it proposing andwhen are we going to see legislation? A The Employment Bill, published on 8 November 2001, introduces newrights to paternity leave and adoption leave as well as extending the currentrights to maternity leave. The main changes are: Ordinary maternity leave will be extended to six months (an increase on thecurrent 18 weeks) and additional maternity leave will also be extended to sixmonths. The Government proposes that SMP will be paid at a rate of £100 perweek, from April 2003, for the whole period of ordinary maternity leave (exceptthe first six weeks when employees will receive 90 per cent of their pay). Thisis a significant increase on the current standard rate of SMP which is £62.20and lasts only for 18 weeks including the first six weeks. The new right to paternity leave means that usually the father will beentitled to a single period of two weeks paternity leave to be taken within 56days of the child’s birth, or the date of the child’s placement for adoption.Where a child is adopted, parents will have to decide whether to receivestatutory paternity pay as they would also be entitled to the new right tostatutory adoption pay. Adoption leave will be another new right, mirroring extended maternity leave.An adoptive parent with at least six months service will have the right to takesix months ordinary adoption leave followed by six months additional adoptionleave. It is intended that the full six months of ordinary adoption leave will,after the first six weeks, be paid at the same rate as SMP and statutorypaternity pay. Where the adoptive parents are married, only one of them canelect to receive statutory adoption pay. The right to adoption leave will notapply to foster parents adopting children already living with them orstep-parents adopting their spouse’s offspring. The right to statutory paternity pay and adoption pay will arise where anemployee has been employed for a continuous period of at least 26 weeks beforethe week preceding the 14th week before the expected week of childbirth – thesame as SMP. These rights are expected to come into force in April 2003. Karen Ozzard The perils of e-mail Q What e-mail problems do I need to look out for? A Most people assume discrimination issues are the only ones theyneed to be aware of when monitoring their e-mail systems. In fact, employerscan face criminal liability for a variety of offences. Under the Defamation Act 1996, employers will be liable for defamatorystatements made by employees on work systems. Because e-mails leave a permanentrecord, they can trigger libel actions. Even internal communications willqualify as ‘publications’ for these purposes. Also, employees who forward obscene material, which includes both sexualmaterial and violent images, can be guilty of transmitting obscene material forthe purposes of the Obscene Publications Act 1959. In this context,transmission is viewed as including electronic transmission. Although it is nota criminal offence to access and download pornography – although it may beoffensive and constitute harassment – the distribution of such material is acriminal offence. Another problem can be ‘flame-mail’ – rude, unnecessary, sarcastic orsexually or racially unacceptable e-mails. Although this may sometimes be areflection of an autocratic management style, messages which amount toharassment on at least two occasions, or cause a person to fear violence, willbe a criminal offence under the Protection from Harassment Act 1997. Thislegislation allows harassment to become an offence, even if it wasunintentional. Aggressive e-mails can also lead to a breakdown in trust and confidence andlead to increased illness absence and constructive dismissal claims. Employers also need to be aware of the Criminal Justice and Public Order Act1994, which makes it illegal to intentionally cause harassment, alarm ordistress by using threatening, abusive or insulting language or behaviour, ordisplaying any message which is threatening, abusive or insulting. Clearly, this can include both on screen messages and printed material. Asmight be expected, employers can be vicariously liable for these types ofoffences so careful thought in the preparation of e-mail and internet policiesis worth the time and effort. Warren Wayne last_img read more


Guru

Posted On May 12 2021 by

first_img Previous Article Next Article This week’s guruGuru cowed by irate Dons outside FA In an outbreak of World Cup fever last week, Guru dropped in on the FootballAssociation to see if they could provide further insight into England’schances. While he received little steer as to whether England deserve their 10-1odds, he did learn about an impressive HR-driven culture-change programme thathas helped double the FA’s profitability in two years. As Guru left the Soho Square offices, a large football fan bellowed”scab!” in his ear. A ‘picket line’ of Wimbledon fans were protestingat the FA’s decision to allow the club to move to Milton Keynes. When he tried to explain that he was a journalist and not a member of staff,the Dons fan screamed: “So, you’re a liar and a scab.” “Tell that to the concrete cows,” said Guru – when he was well outof earshot. Gene genie put back in bottle Recruitment is becoming an increasingly sophisticated area as employers tryto gain an advantage in the battle for talent. However, Guru is concerned that the latest development which has raised itshead in the US (where else?) could be slightly sinister – genetic testing. Last week, government advisory body the Human Genetics Commission called forUK legislation banning employers from asking individuals to take a genetic testas a condition of employment. Guru is relieved – growing up in a small village in Dorset meant that hisgenetic pool was decidedly small and rather murky. Any prospective employerwith access to his DNA could be in for a shock. Commuting’s for the birds Confused commuters using Newcastle’s underground Metro trains will soon belistening to the calls of blackbirds, curlews and kittiwakes as they wait to goto work in the mornings. The bird calls will be played over platform speakers in an attempt tobrighten up workers’ journeys and to mark the Royal Society for the Protectionof Birds’ Wake Up to Birds Week. Guru was all for the idea, until he heard that the broadcasts will alsofeature periodic messages from conservationist andformer Goodie Bill Odie – itcould be the last straw for some poor depressed soul on the way to work. Guru can picture the scene; first the eerie sound of disembodied birdsong,followed by surreal messages from a 1970s comedian – the voices, the voices,the roar of the train, end it all, end it all, blessed darkness…Would-be spies are in for a nasty surprise Applications to join MI5 have soared from 70 applications a day to 130 sinceBBC spy drama Spooks began broadcasting. MI5, which is aiming to recruit 60 new graduates and 120 school-leavers thisyear to help in the war against terrorism, is delighted with the surge ininterest. Hits on the MI5 website have also jumped from 6,000 to 10,000 a week thanksto a link on the BBC’s website for the hit show. However, secret service whistleblower David Shayler who left MI5 in 1997 togo public about alleged abuses, was not impressed. “This is only likely toattract the sort of people who like exploding pens and Aston Martins. They willget a rude awakening when they join.” Guru (who has always enjoyed a rude awakening) is sending off hisapplication this week. GuruOn 4 Jun 2002 in Personnel Today Comments are closed. Related posts:No related photos.last_img read more


Are you up to date with the new codes?

Posted On May 12 2021 by

first_imgAre you up to date with the new codes?On 1 Nov 2002 in Personnel Today Previous Article Next Article When OH practitioners boast of 20 years’ experience, do they mean 20 yearsof the same year, or have they continually refreshed their knowledge? This wasthe provocative question education and healthcare consultant Greta Thornbory,posed to delegates in her illuminating talk, Staying Ahead in OH Practice. Her talk opened with a discussion of the new NMC Code of Practice, whoseprime function is to protect the public by informing the profession on how theyshould behave. The new codes of practice “reinforce ouraccountability”, she said, and with Clause 6 of the Code, you are dutybound to “maintain your professional knowledge and competence”. Clause 6 states that occupational health professionals must keep up to datewith the latest clinical and professional developments and be able to practicecompetently without direct supervision. It also, explained Thornbory, expectsthat you “be honest if you don’t feel you’ve got the skills and need toobtain help from a competent practitioner”. For example, she explained, “How many healthcare professionals stillhave the skills or the experience necessary to administer the smallpox vaccine,which may soon be on offer again?” She went on to explain other aspects of Clause 6, which include a duty tofacilitate students and offer care based on current evidence and best practice.For a detailed look at the NMC Code of Professional Practice, see GretaThornbory’s article, Occupational Health: 54 (10) 21-23. Comments are closed. Related posts:No related photos.last_img read more


Make an impact through intervention

Posted On May 12 2021 by

first_imgRelated posts:No related photos. Previous Article Next Article Occupational health is not a slice of the organisational cake that stays inisolation, so its focus should always be on the well being of the wholeorganisation. So said George Prentice, HR director of the FiberCompositesDivision of Alstom Ltd. In his presentation, ‘Working together in Partnership’, Prentice tolddelegates that no aspect of an organisation can function without impacting onall the other parts, which is equally true of OH. To make an impact, it mustmove from a prescriptive to an interventionist role. Moving to an interventionist role may not be easy, he warned, as managementis often resistant to change. But occupational health is now an integral partof the management process, and must give input with its own perspective for thegood of the entire organisation. Comments are closed. Make an impact through interventionOn 1 May 2003 in Personnel Todaylast_img read more


Who’s the most stressed of all?

Posted On May 12 2021 by

first_img Previous Article Next Article Comments are closed. Who’s the most stressed of all?On 21 Oct 2003 in Personnel Today Is a City trader more likely to be stressed than a librarian? Is an ITconsultant under more pressure than a teacher? Not necessarily. It dependswhether the nature of that job is changing, as Linda Pettit reportsWhile stress can affect anyone of any age in any job, experts agree thatno-one is immune to it. It is very difficult to diagnose accurately, as everyindividual will show different symptoms. “Stress,” says the Chartered Institute of Personnel andDevelopment (CIPD), “arises when [employees] worry that they cannot cope.The pressures of working life can lead to stress if they are excessive orlong-term.” Examples of long-term or chronic stress, says the CIPD, are the fear,frustration and anger that may be produced by an unhappy relationship with yourboss or with a difficult customer, and the unhappiness of an unsuitable job.”Up to a certain point, an increase in pressure will improve performanceand the quality of life. However, if pressure becomes excessive, it loses itsbeneficial effect and becomes harmful,” says the CIPD. Although being stressed often has more to do with how someone reacts topressure than the actual job they are doing, of course certain jobs areintrinsically stressful. People who require high levels of concentration – suchas those working in electronics or finance – are generally considered to be atrisk, as are those jobs with an important outcome be it financial orsafety-related. Employees governed by tight deadlines, those working shifts, orthose who work in confined spaces can be more prone to stress. In 1985, Professor Cary Cooper, one of the country’s leading stress expertsand professor of organisational psychology and health at the LancasterUniversity Management School, set out to find the most stressful jobs in theUK, evaluating more than 100 jobs. He repeated this study 12 years later, to find which jobs were becoming moreor less stressful (see panel opposite). More than 60 per cent of the 104 jobshis team reassessed in 1997 showed increases in stress levels, particularlythose in the armed forces, social work, teaching, farming, local government,nursing and the ambulance service. Cooper is convinced this demonstrates that it is not the jobs themselvesthat are stressful, but the amount of change a profession has undergone. Fundamental changes, such as those seen in the teaching profession over thepast decade, the increase in the amount of paperwork associated with many jobsin the civil service, and the annual pressures hitting the farming communityare making all these jobs more stressful. “It is the amount of change that takes place in that job and theindividual’s perceptions about that job and what it is that makes itstressful,” says Cooper. “Particularly whether those changes meanthey have less control.” The fact that one of the most stressful professions is that of a GP, acareer that is becoming increasingly demanding, is testament to this. GPs suffer the highest rates of psychological problems, health setbacks andalcoholism, as well as leading the way when it comes to divorce. “Those jobs undergoing change, such as healthcare workers, doctors andnurses, are the stressful ones,” says Cooper, adding that in the research,those professions you might think of as stressful – such as pilots or airtraffic controllers – come out as middle-ranking, with a good match between thepeople doing them and the jobs themselves. While change in a job is difficult to avoid, it is possible to manage changein a job to minimise the stress levels of the people doing them. As part of itsdocument, Intervention Strategies for Achieving and Maintaining ManagementStandards on Work Related Stress, published in June, the Health & SafetyExecutive (HSE) addresses the issue of change in a job by advisingorganisations to explain to employees what the organisation wants to achieveand why it is essential the change takes place. Consulting with staff isimportant throughout any change process, as is involving them in the planningprocess so they understand how their work fits in. Don’t delay communicatingthese new developments, says the HSE, as this will block rumour-mongering. Giving employees control over their pace of work and participation indecision-making, particularly during a period of change, is another importantway of minimising stress, as is empowering people to make decisions about theway they work, such as negotiating shift-work schedules. Support, adequatetraining, constructive and supportive advice, regular team meetings and havingthe opportunities for career development can help during change. “Don’t make changes to the scope of someone’s job or theirresponsibilities without making sure the individual knows what is required ofthem, and accepts it,” advises the HSE. Cooper concedes that some jobs, such as working on a City trading floor, areintrinsically stressful, “but individuals going into those jobs usuallylike that,” he says. “Traders, where a wrong decision made in a splitsecond could cost the company £20bn, usually love working on a knife-edge. Butif they were told they suddenly had to do more paperwork, they would find thatstressful.” So what makes one person better able to cope with stress than another?”The characteristics of the best stress survivors are adaptability,”says Cooper. “The ability to make a decision and not worry about it, beingable to talk about their problems and having a social support network when theyneed it.” Someone who is able to cope with stress is also someone who canprioritise their workload, so an individual who is a good time manager may copebetter with stress. “People can learn to better cope with stress, but if there’s a mismatchbetween the person and the job, they will have to leave. You can be trained toprioritise, to be a better time manager, to delegate and to ask people to helpwhen you need it, but if fundamentally that person is dysfunctional andmismatched, they have to get out,” he says. For Cooper, much of the blame for the current levels of stress in theworkplace comes down to poor recruitment – putting the wrong person in thewrong job. “HR departments should look at someone who is currently doing aparticular job well, and get a profile of them on which to base a psychometrictest for new recruits. They rarely do this,” says Cooper. “For example, the characteristics of the best sales person in thecompany could be used as a base on which to recruit other sales staff.Recruitment should be evidence-based. One of the biggest problems is mismatching,and the fact the nature of jobs change and the selection procedure needs toadapt too.” Peter Delves, however, who runs his own training consultancy Peter DelvesAssociates, would prefer to get away from the notion that some people are moreskilled at dealing with stress than others. “People process pressure in different ways,” he says. “Somecan deal with it, but store up pressures later on.” He says that different people find different jobs stressful, but anyone withlittle support and a high level of demand would be under pressure. “Youare looking to match the right person to the job, rather than whether theywould find it stressful,” he says. Delves believes that no-one with the right resources to do the job will letpressure turn into stress. What causes a job to be stressful?– Too much – or too little – to do – Boring or repetitive work – Role confusion – Lack of control – Lack of communication and consultation– Blame culture – Lack of support for individuals to develop their skills – Inflexible work schedules – Poor working relationships with others – Bullying, racial or sexual harassment – Physical danger (such as risk of violence) and poor workingconditions (such as noise)The UK’s 10 most stressful jobs*Prison service Police Social work Teaching Ambulance service Nursing DoctorFire brigade Dentistry Mining The UK’s 10 least stressful jobs*Librarian Museum personnel BiologistNursery nurseAstronomerBeauty therapistLinguistRemedial gymnastSpeech therapist Chemist* Based on research assessing104 jobs, by Professor Cary Cooper at the University of Manchester’s Instituteof Science and Technology, in 1997. Factors included hours worked, workload,deadline pressures and level of responsibility. 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Informed in Five: “Do Women Lack Ambition?”

Posted On May 12 2021 by

first_img Comments are closed. Do Women LackAmbition? by Anna Fels. Harvard Business Review, April 2004. ThemesWomen are often less ambitiousthan men because they are conditioned to fear recognition of their achievementsdue to an unspoken mandate that women should subordinate their needs forrecognition to those of others, particularly men. Women fearrecognition for their achievements and often talk them down, giving the creditto others. Men tend to do the opposite. Essentially theproblem is that different social expectations of the two genders mean thatwomen dislike admitting to being ambitious because it implies egotism and self-agrandisement,and involves the manipulation of others for one’s own ends. Women fear that ifthey acquire these attributes their sexual identity will be under threat.Research such as the Bem Sex Role Inventory in the US suggests that femininityis perceived only to exist in the context of a relationship whereas masculinityis seen as operating in isolation. Male attributes implycompeting and assertion. As a result women feel that their sexual identity isbeing assailed when they compete with men for recognition in the workplace.  Messages Thesolution is for women to get organized to support mothers in the workforceoutside it. They needto actively imagine themselves into their futures, and form life plans whichinclude the potential for receiving earned recognition, based on talent, skillor work, rather than appearance, sexual availability or subservience. To succeedwomen must be prepared to cultivate relationships that help them progress upthe career ladder, despite their distaste for this. Ambition can be maximizedat any stage in life.www.hbr.org/Informed in five is aservice from the PersonnelToday HR Directors Club to keep you on top of what’s in the top businessjournals. Informed in Five: “Do Women Lack Ambition?”On 30 Apr 2004 in Personnel Today Previous Article Next Article Related posts:No related photos.last_img read more


Frontier spirit drives HR manager to extremes

Posted On May 12 2021 by

first_img Previous Article Next Article KatherineGalliano (pictured above) has just returned from a six week trip to Darfurin western Sudan– the biggest humanitarian medical emergency the world is facing today. Ashead of HR for the UKbranch of charity MedecinsSans Frontieres (MSF), Gallianowas tasked with managing the flow of hundreds of volunteers – both Sudanesenationals and foreigners – coming into the area to provide essential aid andmedical care.Galliano,a qualified nurse and midwife who has been head of HR at MSF in the UKfor the past two years, said she faced some unusual challenges in Darfur.”Travellingto and from the various project sites is a mission in itself,” she said.”Driving across country in a four wheel drive, through rivers and fieldsof sorghum in heavy rain, hoping you get through the muddy ditches, isn’t whatI would describe as a comfortable journey, but the amazing landscape you get tosee on the way by far makes up for it.  “Drivingpast a herd of about 200 camels or being stopped by cattle meandering acrossthe road isn’t quite the same as the delayed 07.37 to Waterloo.” Frontier spirit drives HR manager to extremesOn 21 Sep 2004 in Personnel Today Comments are closed. Related posts:No related photos.last_img read more


The Covid churn: Inside resi brokerages’ recruiting games

Posted On May 12 2021 by

first_imgClockwise from top left: Scott Durkin, president and COO of Douglas Elliman; Bess Freedman, CEO of Brown Harris Stevens; Adam Mahfouda, founder and CEO of Oxford Property Group; Rory Golod, Tri-State president of Compass; Pam Liebman, CEO of the Corcoran Group; David Walker, CEO of TriplemintIt’s a long-held tenet of the business that agents switch firms when times are bad — and few years in recent memory have been worse than 2020. “When the market is super strong… agents don’t really move,” said Scott Durkin, president and chief operating officer of Douglas Elliman. “That’s a natural evolution of the business.” Now, a volatile market has sent brokers running, some from the business altogether. Nearly 4,000 agents terminated their licenses between January and December, a 9 percent drop from 63,835, according to Corofy, a data firm which tracks agent movement. Manhattan lost 2,372 agents, while Brooklyn, the Bronx, Queens and Staten Island lost a combined 1,562.“The number of agents today is the most important metric,” said Eddy Boccara, Corofy’s founder. “I really consider the agents to be the consumer of the brokerage.” The drop in headcount is understandable: Many agents saw their income virtually dry up overnight when the pandemic hit. And though the national housing market is roaring, New York City is struggling with an oversupply of high-end condominiums, banks tightening lending standards and buyers’ preferences for more space and private outdoor areas. All told, Manhattan sales fell 46 percent year over year in the third quarter of 2020; in Brooklyn and Queens, deal volume fell 43 and 40.5 percent, respectively. “It’s a time of enormous dislocation,” said Frederick Peters, CEO of Warburg Realty. “For a great many real estate agents, I think it’s really created a lot of fear.” The climate hasn’t stopped brokerages, many of which had to make cuts in the early days of the pandemic, from recruiting. Brokerages always want to grow market share by adding more “consumers,” as Boccara put it, but the landscape has become more challenging with more competition, slower sales and fewer agents. Though firms may not have the financial resources to offer big signing bonuses, many have placed an increased focus on rolling out tools to boost productivity, both for existing agents and to lure in new ones.Read moreCompass went on hiring spree as BHS, Halstead made cutsThe big brokerage squeezeSelling the city: TRD’s 2019 brokerage rankings The Corcoran Group launched a new customer relationship management system in lockdown and an entirely virtual training center for agents in March. As of early December, the firm had run more than 900 classes on business development, digital marketing and wellness, among others. It is also working on getting a program ready to pay agents their commissions as soon as deals close. Brown Harris Stevens began rolling out two lending products in December that will front staging costs for sellers and offer bridge loans up to $25 million to buyers at the behest of agents. “We’re doing it solely because agents have said it’s important,” said Matt Leone, BHS’ head of business development. “I think everything we do is a recruiting and retention tool. … I call it doing your job.”Meanwhile, Compass is gearing up for its initial public offering, which could mean windfall for the agents who took advantage of its stock options. Earlier this month, Robert Reffkin, the firm’s founder and CEO, encouraged that line of thinking in a recent internal memo to agents. “We will be able to invest more in building towards the Compass Northstar: Anything an agent needs, Compass provides,” Reffkin wrote.Coming and goingEven at the best of times, many brokerages view recruiting as a numbers game, where the highest agent headcount reaps the largest gross revenues for the company. But when business is bad, the need for more agents is even more acute.“The industry knows that, really, one out of 10 agents is going to make it and really be profitable for the company,” Corofy’s Boccara said. The game is harder now than ever before: There are fewer agents across the board, and those left know they’re in demand. “The agents themselves are starting to realize that they’re a commodity in hot demand,” Boccara said. “Everybody wants to talk to them.” Compass is the recruiting game’s biggest player. The brokerage hired 249 agents away from its rivals between May and November — more than any of its competitors, according to an analysis by Corofy. “Compass really owns a really, really important market share of hiring,” said Boccara, referring to the strategy of recruiting agents to gain market share. Rory Golod, Tri-State president of Compass, pushed back, however, saying that firms allowing growth to be driven by headcount was leading the industry “astray.” “Great organizations are built by being thoughtful and selective,” he said. “We have never thought about our company in terms of the number of agents. … We don’t set targets based on the number of agents.”The firm was far from alone when it came to bringing on new talent from competitors. Corcoran made 120 new hires, followed by eXp, which drew 92 agents. Douglas Elliman snapped up 58 agents from its rivals, while Oxford Property Group picked up 53.“We are very aggressive,” said Pam Liebman, CEO and president of Corcoran. “We did not stop.” She did note, however, that the firm had limited recruitment to agents who’d been in touch with the firm before and previously expressed interest out of a desire to be “sensitive” during the pandemic. Overall, Compass netted 97 agents between May and November — meaning that the firm gained more agents than it lost. eXp Realty, RE/MAX Edge, Nest Seekers International and Triplemint reported similar gains. Still, Compass churned, or lost, an average of 39 agents per month. Among the city’s other biggest brokerages, Elliman and Corcoran saw an average monthly churn of 54 and 53 agents between May and November, while BHS churn was 9.5.(Compass disputed Corofy’s results, stating that its churn was just under 2.5 agents per month because the firm only counts “principal agents” not their team members internally.) At BHS, the firm has upped its marketing budgets and is pouring resources into a new CRM system that recently launched, according to CEO Bess Freedman.“We’re just going to be a little bit more flexible than usual taking into account the pandemic,” she said referring to costs agents incur.  “We’re sensitive to the agents that have had a really tough time this year.” Merger maniaFor the last few years, consolidation has swept the brokerage industry, and the recent volatility hasn’t changed that pattern. Last year, Compass acquired Stribling & Associates, and in January of this year Bond New York snapped up rental brokerage Caliber Associates, while Citi Habitats merged into Corcoran. BHS and Halstead’s merger in June was the largest of 2020. The two firms, sister companies under Terra Holdings, now have a combined roughly 2,500 agents. However, the process did result in the departure of 38 “underperforming agents,” according to Freedman and Richard Grossman, president of Halstead.Freedman said the pandemic was the “catalyst” for the deal. She said Terra had discussed merging the firms for years, but the idea became an “ideal” option as the city locked down last spring. “If we didn’t have the pandemic, I don’t know that we would have done it at such a quick speed,” she said. “Maybe we would have at some point.”Oxford Property Group absorbed Kian Realty and Spire Group, which meant adding about 280 agents to the firm over the course of the year. The firm’s founder and CEO Adam Mahfouda said that Oxford’s growth insulated the firm from the pain of a market where transaction volume has sunk. “As a company we’re not feeling the toll,” he said. “But a lot of our agents are feeling that.”   In a similar vein, Elegran acquired Anchor Associates earlier this fall, bringing on 20 new people. Celebrity broker Ryan Serhant took an even more extreme approach, launching a new firm altogether in September. He began hiring immediately, despite the fact that a lot of his existing business will continue to be handled by his team at Nest Seekers. “I’m not building this for today. I’m building this for 2030, and 2040, and beyond,” Serhant said in an October interview. “The age old way of getting a desk and you have to drive all your own business and it’s the brokerage’s brand first and your brand second … it will not last, it cannot last.”Serhant’s firm and Triplemint both scooped up agents and staff who had been let go when many firms were forced to make deep cuts earlier in the year. Triplemint CEO David Walker called cutting support staff and agent services “the wrong strategy” back in June, just as agents were allowed to show homes for the first time in three months. “This is the time to invest in your agents because the market is going to rebound,” he said at the time. Fast-forward six months, Triplemint said its headcount has increased by about 20 percent since last December. Walker said he stands by the firm’s “targeted and specific” strategy.“Value to buyers and sellers stands out even more in a challenging market,” he said in December. “It’s the extreme opposite of when the market is roaring, and you can hire your friend who’s done two deals and has their license on the side.”Breaking outFor agents themselves, a different calculus comes into play when deciding whether to stay or go.The pandemic has led some agents, concerned about health and safety, to retire, according to Barbara Fox at Fox Residential. “I think a few of them just don’t want to deal with everything,” she said, noting that there is a real fear among agents showing homes and meeting with clients despite there being no vaccine. “I don’t know anyone who isn’t afraid,” Fox said. “I’ve never been so looking forward to getting a shot.” Meanwhile, others decided this was the time to leave the sheltered wing of major teams. Two agents who had been on the Serhant Team for seven years, Ivy Kramp and Jenna Amicucci-DeChristopher, decided to move to Compass in late June where they founded a four-person team, which includes another Serhant Team alum Vanessa Beretta. The brokers, who say they closed $222 million in total sales between 2018 and 2019, said they parted with Serhant on good terms and the decision didn’t have anything to do with his new firm. “We wish him the best of luck,” said Amicucci-DeChristopher. “Just for us we wanted to go in a little bit of a different direction.” Kramp said the in-house resources at Compass for new development was a big factor in their move.On the other end of the spectrum, Kayla Lee, who handled sales at new development buildings for Modern Spaces for the past five years before jumping to Serhant’s new firm, said the decision was born out of a lull between projects and wanting a new challenge. “I thought this would take me to a new level,” she said.The Peters Breese team at Elliman splintered off from the Eklund-Gomes Team in May, noting that making a move as the market was frozen afforded them additional time to reorganize and communicate with clients. “We have the time to do it now,” as Breese put it. Aaron Seawood, a Brooklyn-based broker and a founding member of Compass’ sports and entertainment division, agreed. He moved to Triplemint in June for the opportunity to “have a seat at the table” as the firm expanded into Brooklyn.“When you’re able to be still, you’re really able to be self aware,” Seawood said in June about deciding to make the jump amid so much volatility. “You have a little more time to think about what’s important to you.Contact Erin Hudson Share via Shortlink Email Address* TagsBrown Harris StevenscompassCorcoran GroupDouglas EllimanNest Seekers InternationalOxford Property GroupResidential BrokerageResidential Real Estatecenter_img Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlink Full Name* Message*last_img read more


Hippo strikes $5B SPAC deal with LinkedIn, Zynga founders

Posted On May 12 2021 by

first_img Message* IPOProptechResidential Real Estatestartup Share on FacebookShare on TwitterShare on LinkedinShare via Email Share via Shortlink Zynga founder Mark Pincus, Hippo founders Assaf Wand and Eyal Navon, and LinkedIn co-founder Reid Hoffman (Getty, LinkedIn)Home insurance startup Hippo has scored the ultimate umbrella policy.The six-year-old company is set to go public by merging with a blank-check company backed by LinkedIn co-founder Reid Hoffman and Zynga founder Mark Pincus, the Wall Street Journal reported. The SPAC, dubbed Reinvent Technology Partners Z, valued Hippo at $5 billion — nearly five times its valuation in July 2020.The deal includes a $550 million PIPE, or private investment in a public entity, from investors including Dragoneer, homebuilding giant Lennar, Ribbit Capital and several unnamed mutual funds. Hippo will get $1.2 billion in cash from the IPO.Read moreHippo raises $150M ahead of IPO Lemonade’s valuation soars to $3.8B Hippo raises $350M Share via Shortlink Full Name* Email Address* Tags Based in Palo Alto, California, Hippo was started in 2015 by two Israeli entrepreneurs, CEO Assaf Wand and Eyal Navon. Its underwriting technology uses things like aerial images and building permits to assess the features and conditions of a home. It offers services like water-sensor devices and burglar alarm systems.“Our guiding principle is that the best claim is one that never happens,” Wand told the Journal.Hippo was previously valued at $1.5 billion, after raising $150 million in July 2020. Four months later, it closed a $350 million round led by Japanese insurance giant Mitsui Sumitomo. It did not disclose a new valuation at the time.The booming U.S. housing market and low interest rates have boosted insurtech companies over the past year.In July, Lemonade’s stock tripled on its first day of trading, boosting its valuation to $3.8 billion.More recently, insurance startup Rhino, which offers an alternative to security deposits, closed a $95 million round, which it said would be the final one before it goes public.[WSJ] — E.B. SolomontContact E.B. Solomontlast_img read more