Hold on to your top-performing employees. Here’s how.
When you find that one great producer, he or she can boost your agency’s bottom line, draw in profitable long-term customers and be a role model for other employees. But before an employee can create that kind of a difference, an agency must first invest a significant amount to hire and train him or her and then give that stellar performer incentive to stay.
General Casualty’s Rick Wittman says it costs an agency $1.20 for every $1 of business a new producer generates during the first two to three years they’re with the agency, according to research from Burand and Associates. In addition, the success rate for new producers is less than 50 percent, meaning that half of them leave the agency before they’ve hit the point of turning a profit or “paying for themselves.”
Here are some tips for your agency, to help you keep your best producers.
Unique considerations for insurance agencies
“Our most successful agencies offer their producers professional development opportunities, a competitive salary and benefits, and the potential to become an owner,” Rick says.
The insurance business offers many professional development opportunities. There are several professional designations that employees can attain and associations that offer continuing education. Also, your carriers – such as GC – may provide training and additional resources. Naturally, good benefits and compensation are also motivating factors for employees. Your GC marketing rep can help your agency determine what percentage of the agency’s revenue should go toward benefits and compensation, based on best practice models.
Another benefit unique to insurance professionals is the potential to become part-owner of an agency. This is an excellent motivator to help keep your best producers. “Producers who consistently exceed new business and retention goals, exhibit leadership skills and are willing to contribute their own capital to the agency merit consideration for ownership opportunities,” Rick says.
One of the most effective ways to transfer ownership to a motivated high-performer is by distributing stock bonuses, Rick says. These bonuses should be tied to targeted increases in the value of the producer’s book of business. They should also be subject to vesting and require the producer to purchase matching shares.
Rick adds that another alternative, which does not transfer ownership but provides the producer with added incentive, is giving the producer an equity interest in the book of business he or she produces.
Thoughts from the HR gurus
GC’s human resources department also has advice for boosting employee retention. At GC, we have significantly lower turnover than the industry average and more than 250 active members in The Sterling Club, an organization for employees who have been with the Company more than 25 years.
- Make it a stated goal in your organization to keep your best employees. To keep employee retention on your radar screen, our HR team has found it valuable to include retention in corporate and individual objectives.
For example, all GC managers’ job descriptions include “select, develop, motivate, train and retain employees.” As a result, this measure is evaluated and discussed annually during each manager’s review.
- Learn about your employees. What motivates them? What are their goals and values? These questions can be asked informally, during annual reviews or through an anonymous survey.
After you find what’s important to your employees, use it! For example, if your employees indicate that communication isn’t up to par at your agency, make extra efforts to keep them as informed as possible – that could mean walking around and giving verbal updates, holding regular status meetings, sending group e-mails or starting an employee newsletter. Or if an individual employee indicates that decision-making is an important motivator for them, make an effort to include that individual in more decisions.
- Always keep open communication and employee recognition at the top of your list HR research consistently shows that employees want to know what’s happening in their organization and want to be recognized for a job well done. How often have you heard someone say that they only hear bad news? Or that their coworkers only notice when they make a mistake? Boost morale by spreading positive news.
These tips should provide some basic guidelines for keeping your best employees. But the HR experts say to remember that some turnover is expected at every company. Don’t fret if one of your good people decides to leave. Instead, stay focused on what your management team can do to make your agency a more desirable place for producers to want to stay and build a career.
For more information please contact Anne M. Smith.