When Lockton Cos. — a global independent insurance, employee benefit, and risk management firm — expanded its presence in Michigan with the addition of an office in Detroit’s historic Hemmeter Building last summer, Elaine Coffman, president of Lockton Michigan, was tasked with developing a growth strategy and an attractive work culture.
Her challenge, as in every growth-minded company, is finding talent during a labor shortage both here and across the country.
The company opened its first Detroit office in 2015, and in November 2019 the firm reported its annual Michigan revenue increased by more than 50 percent, and its team tripled to more than 50 employees statewide. Coffman attributes much of that growth to the company’s culture.
Talent drives success in most industries and Lockton, she says, has no problem recruiting the best-of-the-best from around the nation. She cites Jack Lockton, the company’s founder, and the ownership entity he created upon his death for keeping Lockton independent and growing.
“If you rewound time in Michigan, there used to be a lot of very strong regional, privately held brokerage firms that had a lot of talent, (a) strong culture, and balanced client assignments,” Coffman says. “What’s happened is (that due to) mergers and acquisitions in our world and the state, there are barely any privately held brokerage firms left because they’ve all been bought by private equity or publicly traded firms.”
The ownership entity set up by the late founder allows a maximum profit of 10 percent to go to the Lockton family, along with what effectively is a poison pill if the family wants to sell. Coffman says the arrangement sets associates up with balanced workloads that don’t leave them burned out — and that’s a strong recruiting tool. And with better talent comes strong growth.
On top of the balanced workload, for every client dollar spent, Lockton invests double its competitors in associate and specialty resources. All of these factors lead to a culture of focused employees and an improved client experience.
“In a world where everyone else is taking 30 percent to 40 percent margins, we’re not, so we’re able to have a much better client and associate environment for doing the work our clients need us to do,” she says.
This growth comes at a volatile time in the health insurance industry, which Coffman sees changing in the coming months and years, largely driven by increased cost pressures on employees and businesses due to inflation and other factors.
“I think we’re going to see disruption happen on the health care side in the next 24 months,” she says. “We’re going to have to have solutions for organizations that aren’t continuing to share all these high costs with employees.”