Professional services businesses such as insurance brokers have been “remarkably resilient” over the past few years, according to an annual report from NAB.

They have enjoyed strong growth despite an unpredictable economy, taking the right measures to address challenges such as staff shortages and using technology to sharpen competitiveness, the bank says.

“Profitability is about being as dynamic as possible,” the report says. “It’s about actively protecting and growing your customer base, but it’s also about going the extra mile to get your pricing, costs and debtor management right.

“Above all, it’s about ensuring your cash flow runs as seamlessly as possible, so you have the resources to support new ideas and growth.”

The bank says it is hard to avoid the high price of doing business, and there is no doubt that weighs on profitability.

“It’s not surprising then that staffing costs are a key focus for professional services firms – intensified by the scarcity of ready labour.

“It’s a problem for insurance brokers too. The tight labour market here has been compounded by the ‘ageing’ of the industry, with young people few and far between.”

The report says a key driver of broker McLardy McShane’s success has been ensuring it has specialised staff to deal with emerging risks.

The broker’s COO, Meg Long, says in the report: “Evolving risk is a tricky topic for our industry because we’ve got to be teaching ourselves at the same time as going out and trying to explain to the client why they might need a certain product.

“It’s about making sure we’ve got a well of knowledge to meet any of our ... clients’ demands throughout the year – a thesaurus of risk advisers, as it were.”

She says the biggest risk from a personnel perspective is professional indemnity exposure – staff providing the wrong advice or policy.

“The answer? Training, training, training,” she says.

Click here for more from the report.