FAIA: Employment Crisis Threatens Agencies

An impending employment crisis is threatening independent insurance agents and will become disastrous by 2010 unless employers act now, Lisa Harrington, Florida Association of Insurance Agents vice president of education told students attending her presentation, “Finding the Perfect Employee (Or, Fishing in an Empty Pond), during FAIA’s Management and Automation Training Seminars in Orlando, Fla.

Harrington quoted magazine statistics estimating that by 2010, there will be 4.6 million jobs available and no one to fill those positions.

Employee pipeline empty

“This is not a new problem, everyone is going to retire and no new employees are coming up the pipeline to replace them in the job market,” Harrington said. The current unemployment rate of 3 percent to 4 percent is actually zero unemployment, because everyone who wants a job has one, she added.

Insurance agencies are competing for employees with not only every other insurance agency, but with other industries as well.

“I have conducted training classes during which agencies refuse to allow employees from competing businesses to attend,” Harrington added. “They were afraid their employees would talk to someone from another agency and switch jobs.”

However, providing employees with flexibility and training can help to keep them, Harrington said. “Members of Generation X, born in the mid-1960s, want to know about their future. If they are learning, they will stick with you.”

Harrington said the Independent Insurance Agents and Brokers of America, the “Big I,” recently completed a white paper on Generation X, and she suggested attendees obtain a copy.

Look for the right employees

Another way to ensure you have an effective team is to hire outstanding people. “You need to hire people, not fill jobs,” Harrington cautioned. “It’s essential to properly select the right person for your agency. If you find him or her and there is no position available, hire that employee anyway.”

The alternative-turnover-Harrington said, is one of the biggest expenses agencies face. She went over a list of attendant costs, separation costs, exit interviewer costs, administration costs, vacancy costs and overtime because the chair is empty.

“Turnover subtracts $12,000 to $25,000 from your bottom line every time you lose someone,” she said. Additionally, turnover has an emotional toll.

“Not only have you lost an employee, turnover costs you in morale, no matter why someone leaves-whether it is on their own, found something better or because a spouse has accepted a job elsewhere,” she said. Harrington warned that the employees left behind start thinking, “Maybe I should be looking for something better.”

Five-year planning

To prevent turnover and ensure an adequate employee base, Harrington said it is essential for businesses to map out a five-year plan and not wait for a seat in their agency to become empty before making new hires.

It’s essential for agencies to make proceed with their five-year plan and look for potential employees everywhere, she said. The key is filling chairs before they are empty. Go FISH-ing, Harrington said. The acronym FISH stands for find, interview, select and hire.

“Everything goes back to the job description,” Harrington added. “You can’t find skilled employees unless you are ready.

One way to get ready is to offer employees incentives to remain with the agency. Agencies can participate in high school and college recruitment programs, as well as hire interns to work part time.

High schools are a “hotbed” of potential employees when students get out of school and are looking for jobs, Harrington said. Colleges also can be ideal places to seek employees. Harrington gave the audience a list of 28 junior colleges in Florida where interns could potentially be found.

College recruiting days can be attended by two or three agents from different agencies to talk abut working for Trusted Choice, describing the benefits of being an independent agent and how much money insurance agents make, Harrington said.

Students make ideal employee targets because they will readily fit in to train as a CSR or producer. “You can even help them finish college,” Harrington noted. “How much will two years of college cost here in Florida?” she asked. “You can even tell students you will pay $5,000 toward their college costs and they are responsible for the other half. They will really appreciate the help, and when they get out, you will have someone to fill that empty chair.”

Networking can pay off

Meanwhile, Harrington advised agents to network. “If a policyholder is a golf course and if you insure different aspects of that business, like the pro shop, the caddies and the parking lot attendants, then use those connections to look for new employees,” she said.

Don’t hire employees away from the actual client, she cautioned, but ask those contacts if they can recommend people. Additionally, “don’t hire someone just because you have an empty chair,” Harrington said. And if an employee is not carrying their own weight, don’t keep them around.

Unemployment has been at record lows from 2001 to 2005, Harrington said. FAIA’s Turn Key Recruiting Kit can be a valuable asset for members to obtain new employees. Additionally, FAIA has started an Agency Development Task Force to help members keep up with the challenge of finding employees, Harrington said.

Additional training tools

The Florida Association of Insurance Agents training was held on October 16. FAIA’s Chairperson Veronica Della Porta kicked off the general session with the presentation, “FAIA Today and Beyond.” Other events included an ACT video highlighting the agent-carrier real-time interface; a panel discussion on “Technology, Is it an investment or headache?” with Carolyn Durland, Mike Mansperger, Janice Sheffield, Dick Brown and Ed Higgins; “Personal Political Power” with Joel Blackwell; and “Dominate Your Market by Building an Awesome Selling Machine” by Steve Clark.

Afternoon discussions included: “The Ten Cardinal Sins Producers Commit, and What to Do About Them” by Steve Clark; “How to Manage Your Complex Day Using Microsoft Outlook 2000” with Paul Peeples; “Does Your Disaster Plan Include Business Continuity” with Richard Roy; “Document Management Technology: Considerations and Impact on Consumers” with Bob Larrivee; and “Key Considerations in Disaster Planning and Management for Insurance Agencies” by Paul Peeples, among several other topics.