Insurance agencies that stress “soft” benefits have the upper hand in recruiting workers in today’s competitive job market.
Employees are increasingly seeking out “soft” benefits in addition to traditional “hard” benefits from their employers. While employees still greatly value salaries, commissions, bonuses and even stock options, they also like time off, telecommuting and training.
Experts agree that soft benefits tend to be an area of compensation that can make a huge impact on employee satisfaction when tailored to meet the desires of the agency workforce. Yet too many agencies either don’t extend soft benefits or, if they do, they undersell them when recruiting.
Satisfaction comes with the total compensation package, not just salary, according to Sharon Emek, president and CEO of Work at Home Vintage Experts (WAHVE), a national staffing firm that places “vintage” insurance professionals in agencies and brokerages who work from home on a full-time or part-time basis.
The best compensation packages are based on a variety of elements, Emek said. “Salary is crucial and employees obviously should be paid for the job they do. But I also think it’s about the benefits that you supply.”
Those benefits can be hard benefits such as a solid 401(k) with a good company match. Or they can be soft benefits such as workplace flexibility. Remote working, or telecommuting, has become so important in recent years that people will give up a hard benefit for the flexibility in work-life balance, according to the WAHVE executive.
“If they can work from home two days a week and be with their family and children that is totally worth (not getting) an increase in their salary if they can improve the quality of their life,” Emek said.
The value of soft benefits might even surpass the value of those provided by more traditional hard benefits to some employees.
Insurance Journal’s 2017 Agency Salary Survey confirms that soft benefits and other employee incentives do make a difference in employee satisfaction.
Satisfaction scores (see Employee Benefits Satisfaction Index chart) are higher in every category when agencies offer benefits, whether they are hard benefits like profit sharing, group health or 401(k) plans, or softer benefits such as educational courses, club memberships or trips.
Employees will always value salary but they also want to be rewarded for their hard work, if not financially then in other creative ways, Newgard said.
Soft benefits can be anything that may not cost an employer much financially but can make a huge difference for the employee. The soft benefits offered are often unique to each organization but they range from unlimited vacation days to flex time, remote working to four-day work weeks, cellphone reimbursement to exercise facilities on site, or redesigning workspaces for an open and healthy feeling. They can even include opportunities for charitable work. Free food or coffee in the breakroom works as well.
Soft benefits are about creating a working environment that is pleasant and comfortable for employees, said John H. Clark, Jr., senior vice president, benefits practice leader for Assurex Global. The value of providing such benefits in today’s independent agency cannot be overlooked, he said.
“It’s huge and especially important with the millennial generation,” Clark said.
Clark said Assurex Global partners, which include some of the largest privately-held independent commercial insurance, risk management and employee benefits brokerages, have been investing to better the environment for their most valued asset – their human capital.
He said one Assurex Global firm has even rebranded the organization to market its “total rewards” policy for its employees. Another partner, IMA Financial Group, offers free Starbuck’s in its Denver office.
“That soft benefit makes working at IMA more comfortable and appealing,” Clark said.
Soft benefits don’t always mean hard dollar expenses, said Mary Newgard, senior search consultant at Capstone Search Group, a national insurance industry search firm.
“It’s all of those things that get employees excited but it doesn’t necessarily mean cost,” Newgard said. “I’ve even seen benefits like pet bereavement. It sounds crazy but the amount of cost and impact of a pet bereavement (policy) is so minimal that the employer will hardly ever see it. But if you are a pet lover who has a loss and you don’t have to use a PTO [personal time off] day for that loss, that’s a huge, tangible benefit (to the employee) that didn’t cost the employer.”
The consultants stress that soft benefits alone are not enough and caution that workers may become discouraged if soft benefits are offered to make up for what they perceive as inferior hard benefits or overall compensation.
“It’s about the (complete) benefits package and the ability to have a flexible working environment,” Emek said.
Soft benefits are part of a complete package, not a substitute for hard benefits.
“With the way that the market is right now in insurance, an experienced professional is very sought after, and if you can’t give them raises to a substantial degree you are going to run the risk of having a revolving door (of employees),” said Capstone Search Group’s Newgard.
While many agencies offer soft benefits, or other perks, some of them may not be sufficiently advertising those benefits to potential hires. That’s a mistake, Newgard said, because the right compensation plan – with a good mix of hard and soft benefits – is important to competing in today’s environment. “It’s the most difficult time to hire in the insurance industry space, at any level of experience,” she said.
Newgard advises agency owners to be transparent with compensation plans and be sure to highlight the soft benefits offered to employees.
“People want the transparent employer,” she said. Employment candidates want to know about corporate charitable endeavors and philanthropy. They want to know about organizational structure and career pathing. “Experienced and inexperienced professionals want a culture of transparency in any organization,” she said.
Young agency employees, in particular, are looking for employers that will allow them to maintain a positive work-life balance, according to Madelyn H. Flannagan, vice president, agent development, education and research, at the Independent Insurance Agents and Brokers of America,
“They want opportunities to grow,” both professionally and financially, Flanagan said. But they also want the latest technology and telework options. “They want professional development and retirement plans.”
Noelle Codispoti, executive director of Gamma Iota Sigma (GIS), an international fraternity for students of insurance, risk management and actuarial science, agrees.
“What we see with our students coming into entry level positions is less of an emphasis on that cash component and more of an emphasis on the culture of the company,” Codispoti said. How those discussions evolve with the potential employer could depend on whether the graduate accepts the job.
“A company’s willingness to discuss what the compensation will look like, what their career with the company would look like, what kind of help they will give to the individual, whether it’s professional designations or going to get an MBA, the support the company provides for community outreach, even the company’s mission on giving back to the community,” she said.
Angela Pilotti, managing director/content development, at The Institutes, the educational organization behind the CPCU designation, added that research conducted by her organization has consistently shown other issues outside of salary, including flexibility and soft benefits, are especially valued by younger generation workers as they advance.
“We are seeing when you are new to the industry, salary is very important, but over time that becomes less important,” she said. As workers advance in their careers, other benefits like a flexible schedule, the ability to do community service, the ability to receive training or education, or equity positions in their employer grow in value.
When it comes to soft benefits, it’s important for agencies to display their culture by displaying what they offer their employees, Newgard said. “Agencies are behind on that more so than larger insurance companies when it comes to branding what they already do,” she said.
“You don’t have to keep raising salary every year to give people things that they assign value to,” she said. “When you give people flexibility to go to doctor’s appointments or to be able to work from home … these are the kinds of things that make people happy with compensation really, really fast.”
What prevents agencies from “going crazy with soft benefits,” Newgard said, “is knowing when it’s too much.” But that’s where transparency comes in. “If you just talk to your employees about what kinds of things they would find value in, they might surprise you.”