BEFORE you jump into new producer recruiting mode in 2019, challenge whether this organic growth strategy makes sense for your commercial insurance agency/brokerage.
Not every firm should hire new sales people.
It’s OK to choose to be a lifestyle, slow-growth agency.
And if you choose to be an organic growth agency, you’re smart to first generate more production from your current producers.
Turn your non-producers into producers.
Then, go find top sales people to become your new producers.
But don’t do it until you’ve assessed your firm’s new producer readiness.
And do this with ruthless honesty and self-awareness.
Answer these 10 questions BEFORE you recruit a new producer.
- Can we afford to invest in a successful new producer; can we afford to absorb the cost of a possible new producer failure? Your agency should be $2+ Million revenue.
- Is our agency an attractive place to work and does our agency’s social media reputation reflect this? Refresh your agency’s website and LinkedIn and Facebook company pages. Check your agency’s reputation on Glassdoor, Indeed, and various social media platforms where prospective employees will go to check out your firm.
- Do we have a clear sales and marketing plan? Ideally, your agency has industry niche expertise and unique client services that enable a new producer to compete to win and become successful quickly.
- Does our agency have a track record of investing in and developing new producers? If your agency has a spotty history, you need to build a real plan for supporting a new producer.
- Are we enthusiastic about bringing on a new producer and do we view and treat a new producer as a valuable investment in the firm’s future? A new producer should be welcomed and supported by the owners, producers, marketers and service team.
- Do we have a sales manager and experienced producers available as mentors? Active, day-to-day sales management and experienced producer mentors are must-haves. Your support system for a new producer is as important — or more important — than hiring the right person.
- Do we have demanding, but realistic, first year expectations for a new producer’s prospecting and sales results? The first year is mainly about pipeline-building and generating 2-4 quality prospect appointments per week. A good thumb rule for first-year sales: a successful new producer roughly covers their first-year salary in total agency commissions sold (though expect these sales to be back loaded in the second half of year one).
- Are we willing to commit to a reasonable starting compensation plan to attract and retain a new producer? We’re in a zero-unemployment labor market and competition for sales talent is fierce. Lots of variables here, but you need to budget ~$50K to $80K first year compensation, mostly guaranteed salary, to hire quality sales people in a talent-scarcity environment.
- Do we have a realistic plan and time line to validate a new producer? A new producer is a “long play” investment. Build a 3-year bridge to validation with key success milestones along the way.
- Are we prepared to effectively recruit a new producer? Your agency needs to be effective at finding and attracting top sales talent; your hiring process needs to balance thoroughness with a sense of urgency. If you move too slowly in this overheated labor market, you will NOT hire top sales talent — indeed you may not hire anybody at all!
Answering these 10 questions will help your commercial insurance agency/brokerage to assess new producer readiness.
Your firm doesn’t need a perfect score, but you should seriously pause and reconsider hiring new producers in 2018 if you answer “no” to several questions or can’t find a way to change a few “no” answers to “yes.”
Please let me know if I can help you with new producers in 2019.