Recycling (or perhaps filching) somebody else’s producer continues to be a leading source for commercial insurance agent/brokers hiring new producers. One fundamental problem with this strategy is that the potential candidate pool of existing insurance producers is very, very small. Go ahead and fish for producers inside the insurance industry but understand that you’re fishing in the smallest pond of potential producer candidates and that there are some toxic fish swimming around too. So, the second fundamental problem is that a strategy of recycling existing producers is not working well for most commercial insurance agent/brokers.
The temptation of hiring a recycle is that existing producers have already chosen this profession, are licensed, have experience (albeit not necessarily good or successful experience), technical knowledge, and may even be portable and can bring along a book of business. The portability of an existing book of business drives the economics of recruiting recycles – whether it can work out really great or really badly. I recall an agent hiring an experienced commercial producer after a long stint with a direct insurance carrier. The person had set up short-term as an independent broker, had a decent size, completely portable book of business, and was a near-instantly validated new producer. Those are rare, fortuitous hires! I know many more agents who have paid seasoned producers six-figure guaranteed salaries with an expectation that they were getting a rainmaker with a book of business to follow 2 years later after a non-compete runs out. Too often, that’s proven to be a precarious, front-loaded cost, high-risk structure for a new producer investment.
This challenging situation has created a perplexing phenomenon. Since it proves to be so difficult and expensive to recruit a successful producer from another firm, I see many agent/brokers hiring struggling or failing producers! Everybody deserves a second chance, right? It sure seems like a lot of commercial insurance agent/brokers are eager and willing to give producers who struggled or didn’t cut it in another firm a second (or third or even fourth) chance.
Some of these struggling or failing “recycle” producers cross our paths as we help our clients, the country’s top commercial insurance brokers, to recruit Business-to-Business (B2B) sales people from outside the insurance industry. I’ve even convinced a client or two that someone who busted as a producer in their first agency will be successful in their agency. It’s easy to convince yourself that someone who failed elsewhere could thrive in your firm. If only they had your firm’s sales management, marketing support, mentors, carrier markets, and special programs and services, the outcome would surely be different and better, right?
Before your hire another agent/broker’s producer, answer these two sobering WHY questions (and be prepared to puzzle until your puzzler is sore):
1. Why would the prior agency give up on their investment in a new producer after 6 months, or 12 months, or 2 years, if they saw that the person was working hard, doing all of the right things, and making progress down the path to validation and becoming a successful producer?
2. Why would a new producer jump ship from their agency/brokerage if they have put in the heavy-duty prospecting grind and are successfully building a clientele (and the residual income stream that ultimately makes so many producers wealthy)?
The struggling or failing producer at another agent/broker can be a tempting, easy hire, but you need to really figure out if they are the rare, high quality person that happened to be stuck in a bad environment. Sadly, in our decade-plus history of working with clients, we don’t see many cases where a recycled producer worked out well for the 2nd (or 3rd or 4th) agency that gave them a 2nd (or 3rd or 4th) chance to become a validated, successful producer. It happens on occasion but hiring struggling or failing producers is more often a losing formula for most commercial insurance brokers.
The lesson learned for agency principals: don’t count on a struggling or failing recycled producer from another agency to succeed in yours. In fact, if you make the hire, be prepared to fire quickly — as soon as you recognize it’s not going to work — because, frankly, you’re not going to fix them and it’s the only humane way to treat a producer who isn’t a producer. Not everyone is cut out to be a successful commercial insurance producer. The person needs to get on with their career in a different place where they can be successful. Then go find fresh outstanding sales people in other industries to be your producers!
Lesson learned for new producers: pick your first agency/brokerage wisely and make sure it’s a great fit for you and a strong environment for your career. Your first agency is likely your best — and maybe only — shot at making it as a commercial insurance producer so choose wisely and then – no excuses — dig in and do the hard work, be coachable, learn the profession, and build your book of business.