The executive said he and the management team recognized that “we put our people through an awful lot” over the last few years.
“Covid plus merger is an incredible combination,” Hess said. “What doesn’t kill you makes you stronger – and our people are very strong. But recognition of that is very important.”
The CEO said the company could do more going forward to build up a culture of trust between management and the broader colleague base.
“There will be a bit of ‘show us, and then we will trust you’, and that is fine – I completely accept that,” he said.
Over the past year the global intermediary has experienced significant difficulties around talent attraction and retention due to the uncertainty placed on the business over its future owing to the abortive Aon-Willis transaction, which left WTW in limbo for 16 months.
The talent challenges were made clear in WTW’s Q4 results, which included a 4% organic growth figure which was far short of its broking rivals – with Marsh McLennan and Aon both posting double-digit organic growth of 10%.
Hess said this figure was in line with the company’s expectations given the challenges around staffing, and he anticipated the gap between WTW and its peers on growth would narrow through 2022
He noted that in rebuilding and retaining the talent base, “it is not sufficient to just plant the flag and see people attracted to the purple banner… but it does help.”
He said: “We are happy with our progress [on talent] but not satisfied with our progress.”
The CEO highlighted that the corporate risk and broking (CRB) business had taken the biggest “beating” during the merger uncertainty, and therefore needed the most care and attention.
“The bones are sound but there’s a lot of bruising,” Hess said. “There’s some healing which needs to happen.”
Other areas which had been slated for divestment – including France, Spain, the Netherlands and Germany – will also be a focus for WTW, he said, adding: “Being told you are for sale is a bit demotivating so we are looking to engage with the teams and the leaders.”
A major consequence of the failed merger has been the sale of Willis Re to Gallagher, leaving WTW without a presence in the treaty space, although it has maintained a presence in facultative reinsurance despite significant hiring in that area from competitors.
When questioned on his view of that market and whether WTW may return to the space long term, Hess said: “It will be very interesting to see as the capital markets collide with the reinsurance markets, just what the role of the reinsurance broker is going forward, as opposed to other players that can help insurers manage their overall book of risk.
“We do think we will have a role to play in that universe, and we will see where it goes.”
Looking forward, WTW has already set out some strategic goals around revenue growth, margin and capital return – and Inside P&C’s research team has previously described the challenge Hess and the team will face in delivering on all of these metrics at once.
When questioned on this challenge, Hess said: “There is a tension between the goals but our job is to navigate between them.”
He continued: “The growth targets at our investor day are not a slam dunk by any means, but they’re ones we think can be accomplished while satisfying the other goals that are there – margin improvement and prudent stewardship of capital.”
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