A client recently asked me about the merits of hiring two new insurance producers at the same time. My first answer — tongue in cheek — is that, of course they should and that we, their producer recruiting firm, are ready to place as many of our candidates as they can hire! My more thoughtful answer is: it depends and there are pros and cons.
The Pros
- The case for hiring new producers in tandems or threesomes is that you create an environment with collegiality, competitiveness, shared learning, shared misery, etc. for the new producers as they start grinding it out in this rewarding but challenging sales career.
- There is some modest economy of scale for your firm in the early onboarding and orientation for new producers by running 2 or 3 new people through your new producer development program simultaneously.
- Finally, you can hedge your failure risk by making multiple quality hires. If you make 3 new producer hires and 1 out of 3 quits or busts and the other 2 validate, your ROI economics work out and the 2 winners will often pick up the table scraps from the one who didn’t fit.
The Cons
- A big con is the cost to hire multiple producers. Your firm is underwater for at least 2-3 years and marginally above water in years 4 and 5 on any new, unvalidated producer hire. Multiple new producer hires simply multiplies your out-of-pocket labor costs.
- Timing issues can be a challenge. If you are intentionally going to hire a “class” of 3+ new producers, finding multiple high quality candidates to hire at the same time is not an easy recruiting assignment.
- You must guard against sacrificing quality. You need be sure that you are not intentionally hiring a marginal or high failure risk candidate because you can’t decide between multiple candidates. Nor should you justify multiple hires as part of a risk mitigation strategy to take over-sized new producer hiring risks and then see who sticks. Each producer candidate needs to be — standing alone — a manageable risk to validate as a new producer or you shouldn’t hire them.
- Finally, multiple new producer hires can place a serious strain on your agency/broker resources after the hire — particularly if you hire great new producers! Your new producers will not succeed if you expect them to self-manage. Active, day-to-day sales management is required and new producers need experienced producers to provide encouragement, guidance, and mentoring support.
So, before an agency/broker decides to make multiple new producer hires, they need to candidly assess these pros and cons to make sure that they are ready to succeed.
