Agencies Underpay CSRs, Overpay Producers, Argues Consultant Bates at 1752 Club Meeting

April 19, 2004

The reason independent agencies struggle to attract customer service representatives (CSRs) is that agencies just do not pay them enough. Instead,agencies overpay their producers.

Consultant Virginia Bates thought she would be jeered after expressing this opinion at a recent meeting in Framingham, Mass. Fortunately, the meeting was the New England 1752 Club, the industry's oldest continuously operated trade association comprised mainly of field representatives for insurance companies, although some agencies were represented.

Bates of VMB Associates, Inc. in Melrose, Mass. spoke to the field representatives and guests on the widespread industry problem of "Why We Cannot Find CSRs Out There" and offered possible solutions.

"The people are out there. There are good people graduating and working to whom insurance would be a step up," Bates maintained.

Why aren't they lined up to work at insurance agencies? "Because we don't pay enough," she answered.

Bates noted that good CSRs must have a combination of traits and skills that can be difficult to find in one person For example, they must have some math ability but also be empathetic; they must be able to deal with complex isuses yet explain them in simple terms.

"In other industries they can do much better," maintained Bates.

Bates anticipated the logical question of where agencies are supposed to get the money to pay CSRs more. "There's plenty of money in most agencies," she said. "but it's put in the wrong places. They're paying producers too much."

She added that agents have a "natural empathy" with producers.

She advised that agencies must "change the dynamics" to find ways to pay CSRs more and stop rewarding producers so much for renewals that are really handled by CSRs.

"CSRs are seething over producers getting four or five times what they are getting. Why would someone want that? We lose people who 'get it,'" said Bates, who acknowledged that her recipe amounted to "deep surgery" for the agency system.

But for agencies that have made the change, "It's heaven," she maintained..