Recruiting and staffing in the insurance industry has never been as “hot” as it is right now, said Susan Henry, senior vice president, The Jacobson Group, an executive search, professional recruiting and interim staffing firm with a focus on the insurance industry, in an interview earlier this year.
“I’ve never seen things quite so competitive between workers, as they are right now,” Henry said. “It feels like everybody is hiring, and that everybody is struggling to find talent.”
When it comes to finding, hiring, training and retaining sales talent there’s no black and white model that works in all agencies.
“There’s no absolute,” says Alan Shulman, publisher and author of Agency Ideas, a sales and marketing newsletter for independent agencies, and author of Insurance Journal’s “Growing Your Property Casualty Agency” monthly column. “Every business is different,” adding that the cost to hire and train any sales producer is significant. “It’s a major investment for any agency, particularly a small agency,” Shulman says.
Even in a larger agency, the cost to hire and train the right producers is a huge investment, leaving no room to gamble in today’s competitive market.
While no one model works for all agencies, large or small, a few of the nation’s most successful agencies have found methods and procedures that seem to be producing solid results. Here’s what they had to say.
No agency owner can deny the cost to hire and train a new producer is significant. Whether the cost is salary-related or related to training and mentoring efforts, the investment costs stack up.
Mike Morey, chief operating officer for Pasadena, Calif.-based Bolton & Co., estimated the investment cost of one new producer to be more than $125,000 before commissions start coming in.
“We’ve had some (new producers) that have paid for themselves within the first two years, but it depends,” Morey said. “The first year is usually not that good. Usually at about that 18-month point is where you start seeing some success.”
That’s why Bolton & Co. invests upfront.
“All of our producers for the last few years have been outside of the industry … either right out of college or up to three to four years of business experience,” Morey explained. Bolton relies on referrals for most of its producer candidates, from its own staff, other producers and even its clients.
All candidates have some type of sales experience, a key criterion to making the cut, Morey says.
For Bolton, the real investment begins before new hires enter their doors.
“Our selection process is tough,” Morey said, adding that for the past several years he typically interviews around 40 to 50 producer candidates a year but only hires two or three out of the bunch. Those few that pass Morey’s initial interview advance to interview with another key executive at the firm.
“After that, we have them meet with an industrial psychologist,” Morey explained. Among other things, the psychologist interviews potential hires to evaluate their maturity level, mental health and personal and professional stability.
Bolton has had much success using industrial psychologists prior to hiring new sales producers and it’s an expense the company is not willing to part with. “We’ve been using industrial psychologists for many years,” he said. “When we don’t do it our results are not as good.”
California-based Heffernan Insurance Group has always been “very pro-young agents,” and is dedicated to training its own, says John Pritchard, senior vice president and manager of special accounts. Until three years ago, Heffernan, an Insurance Journal Top 100 Agency, brought in new producers and trained them in a traditional way, Prichard said.
“We would hire someone, maybe one or two people a year out of college, and we would match them up with a large commercial producer, and we would have them train under that producer for a year or two and start selling with that producer,” Pritchard explained. Over time, the young producer would begin to develop their own book of business. “That’s kind of the more traditional way we used to do it,” he said.
Today, new Heffernan producers begin small and then go large (should they wish to go that route), said Pritchard, who developed and now runs Heffernan’s new producer training program, as well as the small commercial unit.
“A few years ago, we decided to develop a business plan for developing new producers in the small commercial arena,” Pritchard said. The new producer training model folded into a larger strategic plan to grow the agency’s small commercial segment. “We felt there was a big opportunity in the small business arena,” Pritchard explained.
Each year Heffernan brings in a group of new producers who must begin in the small commercial unit, while going through an established training program, Pritchard said. “Then we train them on a particular industry group — the insurance and all the exposures and needs of a particular industry group and we get them off and running in selling insurance to that particular industry group.”
Currently, Heffernan’s small commercial division operates with about eight “seasoned” producers, those that have been selling insurance for more than four years. However, the small commercial sector also has another 22 producers with less than two years experience, and 12 of those have less than six months in the business.
Pritchard says the agency plans to bring in 12 new producers per year into its small commercial division. Those that hunger for larger commercial accounts must be trained, tested, and, in a sense, pay their dues in the small business unit.
“We definitely see two career paths,” Pritchard admits. “One career path is selling small commercial, which is a path some people really want and really enjoy,” he said. “Other people definitely want to move into large commercial.” Heffernan’s large commercial unit employs some 90 to 100 producers.
Those young producers eager to enter the world of large commercial insurance spend one to two years working small commercial accounts while learning the ropes. Others that find they enjoy the small commercial side, stay, he said.
One agency has found staffing success by developing its own internship program.
Virginia-based Rutherfoord Cos., an Insurance Journal Top 100 Agency, began an internship program about four years ago as part of its strategic plan to focus on strong recruitment and perpetuation goals.
“I think most folks in this business would tell you that really great talent can be difficult to find,” says Kimberly Enochs, senior vice president, Rutherfoord Cos.
Enochs said the company decided about five years ago that investing money and time into creating a formal internship program could assist the agency with finding quality new sales producers.
“We needed to grow a lot of our own, and we also believed it was a great way to perpetuate our culture, which is something we really guard and protect,” Enochs said. “Perpetuation is one of our top goals.”
The Rutherfoord intern program recruits student during their junior year of college, mostly from college risk management programs or financial programs. The internship runs through the summer after their junior year, Enochs explained.
But to be a Rutherfoord intern, students must first pass a formal interview process that consists of sales skills profile testing and a behavioral interview.
“We put the intern through the same hiring process that we use for normal hires,” Enochs said.
Once the intern begins at Rutherfoord, they work through a curriculum that encourages a broad, but detailed overview of the insurance industry, she said.
Enochs admits that some students may seek out internships solely to meet their educational degree requirements, but those students do not fit into Rutherfoord’s program. “We’re very upfront about our expectations,” she said. “They know going into it, that this is a performance-based internship.”
Rutherfoord considers its interns as an important part of the future of the company. To demonstrate the company’s commitment to its interns, Rutherfoord pays its interns, and pays them well, Enochs says. “We believe that that says you’re important to us,” she said.
Enochs also added that when the agency developed its internship curriculum they wanted to provide the students with a valuable work experience. “We give them assignments that are not only meaningful, but are also challenging,” she added.
By the end of the program, Rutherfoord interns are well-versed on the basics of the insurance business and have developed an appreciation for the company and what it has to offer, Enochs said.
The investment has paid off by generating new hires for the agency. While Rutherfoord’s initial internship program focused on new sales talent, Enochs says in the past year a number of ideal candidates for other positions have emerged, including students with interest in customer service roles and underwriting.
“We have hired every intern we’ve had thus far,” Enochs said. The eight who are still completing the program will find out if they have met Rutherfoord’s expectations at the end of the summer. But so far, “we’ve not had a single person come out of this experience saying, ‘I don’t think this is the right place for me,’” Enochs said.