How to ease your hiring woes
By Roger Kaland
Vice President of Marketing
General Casualty Insurance Companies
If your agency is in the market for a new producer or you’ve recently hired one, you know that it’s a costly, time-consuming and sometimes nail-biting process. However, good planning can take some of the sting out.
Key findings from agent focus groups, as well as day-to-day conversations, indicate one of the biggest issues for independent agents right now is hiring and keeping new producers. We recommend agency managers determine their projected hiring costs early on, then take advantage of all available resources.
Take a realistic look at hiring costs
To ease future frustrations and help you budget effectively, sit down and determine what a new producer will really cost before taking out that classified ad. Calculate the new producer’s salary, cost of benefits, support staff time, operating expenses and the amount of premium needed to offset these costs. Also, don’t forget the dollars needed to advertise the new position, (potentially) pay a headhunter and train the new employee.
Your carriers may help you budget for these costs or even provide financial resources, including loans. These are good discussions to have with your marketing representatives when you’re reviewing goals for next year.
Be patient, define expectations
Industry studies indicate it costs a new producer $1.20 for every $1 of business they generate for the first two to three years they’re with the agency.* In addition, the success rate for new producers is less than 50 percent, meaning that half of them leave the agency before they’ve turned a profit or “paid for themselves.” **
Naturally, agency owners have lofty expectations for their new hires. However, unrealistic goals or too much pressure from the agency can burn out new employees before they hit their stride.
To help alleviate these growing pains, a written professional development plan is a must for each producer. It should clearly define the producer’s goals, as determined by agency management with the employee’s assistance, and be formalized in writing.
Don’t underestimate the value of training
Offer training to new employees, including education outside your agency walls. Not only does that show your agency is invested in the new employee, but it will help them cut through the learning curve and develop or refresh skills.
Agencies can find training opportunities through their affiliations with professional societies and/or independent agency associations. Also, don’t forget about your carriers, who may provide quality training free of charge. You may even consider making these training opportunities part of your new producer orientation, regardless of his or her industry experience.
Agents have told us these classes help provide a strong foundation on forms, manuals and product information. The better your staff knows its products and what they provide, the better they can serve the agency’s customers.
Stay positive
Even if you find the hiring process more costly and frustrating that you’d planned, like so many things in life, it helps to stay positive. In my experience I’ve seen that agents who are excited about their career and find their careers challenging and rewarding attract like-minded younger people to join their agencies. More importantly, 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.
About the author: Roger Kaland joined General Casualty in 1978 as a commercial underwriter and has held several positions in the company’s commercial lines and marketing departments. He was named vice president of marketing in 2004. Kaland is a graduate of the University of Wisconsin - Whitewater.
* Cited from “Agents Must Stop Subsidizing Producer Sales,” by Chris Burnard, published in National Underwriter Property and Casualty/Risk & Benefits Management Edition, October 30, 2000.
** Cited from “Hiring a Producer Can Be Your Best Investment,” by Kevin M. Stipe, published in National Underwriter Property and Casualty Financial Services Edition, August 16, 1999.
For more information please contact Anne M. Smith.