Management Team Insurance

The following is an overview of a program we call "Management Team Insurance."  This program should be seen as a best practice model, at a compensation threshold that pushes/allows people to experience the best service, first, not last.  We believe this to be the most qualitative and value driven program of its kind.  However, it does take a paradigm shift, jumping out of a traditional mindset on the part of a client organization.  If you are open to a progressive approach this is a winner.

The logic of this program is as follows:

1.  Value the Variation.  Understand that people are not the same and that one is better and provides more value to the organization.  The value of each increment will vary by complexity of the role and other factors.  Short form: top performers can make you much more money.  A business office manager with days in A/R at 55 vs. 75 is the easiest to see as an example.  Both behavioral and skill competencies have to be considered and weighed by each individual position. 

2.  Characterization of the target market.  Believing that top performers are the target market, they are typically the passive or non job seekers.  This means you have to go to them, listen, and be interactive.  Short form:  direct recruitment.  Retained search, as it exists today is the best operational model to do this.   (Retained and contingency search are different industries.  Truly educated consumers of this service understand those differences and know when to use each.  We are happy to share those dynamics with you.)

3.  Change the point of utilization.  This is the key.  If we understand that utilization of direct recruitment is the best way to get the best people, we have to understand what has kept it from happening more often by more people.  We feel that the three main reasons are...

A.  Tradition.  Doing what everyone else has done, what we have always done, etc.

B.  Recruiters themselves.  From our conversations and experiences, the concept of professional recruiter, to an HR Director, is an oxymoron.  We have quit trying to swim upstream with this one.  You will notice that in our e-letter, there is no mention of The Rottman Group being based in recruitment.  Our hope is to establish credibility as one that not only understands recruitment, but also understands the whole human system and how it works together.  From much polling of HR people, based on their experiences, at most, 20% (many said 0%), of recruiters understand recruitment.  There is no other professional service with such a pitiful commentary as this. 

C.  Cost.  The cost of retained search and the commitment involved scares people away; there is sticker shock.  Couple this with tradition and their experience/view of recruiters, and it becomes much easier to understand. Thus, regardless of the true value and ROI of retained search, regardless of how it isn't a tough sell in other industries, it is nevertheless the dynamic at the director to VP level in hospitals.

How we propose to overcome these:

1. Tradition:  This is for the client to overcome.  We can educate, but ultimately, this is something we can only do so much with.  You have to be open, analyze recruitment dynamics, and be intrapreneurial.

2.  Recruiters:  This one is for us to overcome.  Given the opportunity, we believe we are able to create a different experience.  Our interactions and references will validate this.

3.  Cost.  This is one we have to work together on, to find a best win-win formula given specific circumstances. We believe in taking aggressive steps with this new program.

MANAGEMENT TEAM INSURANCE.  Remember the goal is to change the decision point of utilization:  for people to use a "best practice" without hesitancy.  We believe that organizations can know that if they have a 5-10% historical turnover on their management team, they know there will be between 1 and 3 times per average year that they will face a management team recruitment OPPORTUNITY.  (if done well, it is an opportunity to make a team better)  The concept of insurance is:  pay a little along the way and when you have an accident, it won't cost as much to fix your car, or to have an operation, etc.  But you are paying some so that whey an incident happens, you won't drive a broken car or stay sick; you fix your car or body, it gets good care. 

One objection we have heard to this program:  “Our management team is full right now and aren’t planning for turnover.”  That is fine if you historically have not had enough management team turnover most years to validate this program.  However, if you have historically have averaged two or more openings on your management team, you should closely evaluate this.  History is your best prediction of the future.  We have found there to be a sense of denial in this regard; “Our team is full right now so we won’t need this.”  When you do, you will then be back in a traditional/reactionary mode.  This program was created to keep you from that.

The difference with Management Team Insurance (MTI) is that you can anticipate that you are going to have incidents, more so than with auto, health, or other forms of insurance.  But, on your management team, as we have outlined above, you may not get good care when you have an incident; you may drive a your car around without a rear fender, or you have your cousin Bob do the paint job in his garage to save $50.  If organizations can buy into a best practice model, have a consistent commitment to it, we are willing to meet them more than half way.  The following are the basics of the program: 

A fixed payment per month paid to The Rottman Group.  This gives you a pre-negotiated number of “search credits”.  Each time an opening comes up on your management team at the director to VP level, we manage it.  No advertising dollars spent or other firms.  You have pre-selected a recruitment resource with validity and chosen a best practice model. 

• The cost for this can be significantly less than traditional executive search-by-search programs.
• The cost is spread out over a 12-month time frame.  This allows for better budgeting and cash management.

There are some mutual safeguards for both of us that we cover in a more formal proposal agreement.  There is also some flexibility relative to facility size that we offer.

This program may need more interactive explanation.  Our hesitancy of deep explanation here is due to confidentiality.  We don’t want to create the next great thing, from substance, and have others duplicate it on the surface.

Please call Don Rottman at 501-228-4433 to discuss further.