Independent insurance brokers have been struggling to hire new employees theyve managed just a 56% success rate over the past five years, according to Reagan Consulting. However, theres a wide discrepancy among firms: the top 25% of firms had a success rate of 84% compared to a 22% success rate for the bottom 25% of firms.
Regans consulting producer recruiting and development study found that just 35% of new hires came from outside the insurance industry, including recent college graduates. Reagan Consulting President Kevin Stipe described the hiring practices over the past five years as troubling.
Is there another professional services industry that hires so few from outside the industry or from college? he says. In light of the fact that our industry is aging and that nearly half of a typical agencys business is handled by producers age 50 or over, this is alarming. Is the industry facing a perpetuation crisis?
The study also found that 55-60% of firms are not hiring enough new producers to achieve their growth objectives or allow them to successfully perpetuate their business. Furthermore, free agents, who move from agency to agency, were by far the largest category of producer hires, accounting for 55% of new hires over the past five years.
6 tips for recruiting and development
Based on its study which gathered baseline data from 4,641 brokers from 562 firms and conducted a follow-up survey with 112 firms that hired 1,505 new employees over the past five years Reagan Consulting offers six tips for recruiting and development:
1) Defining hiring needs: Its common for agents/brokers to be in the dark about how many producer-hires their business requires;
2) Determining whom to hire: Agents/brokers are often opportunistic recruiters, pursuing available individuals rather than being intentional about the producer profile that best fits their firm;
3) Building the candidate pool: Lacking a strategy to increase the pool of producer candidates, agents/brokers are limiting their options and capacity for hiring;
4) Evaluating the ability to select winners: Many firms dont have an established process to evaluate candidates, yielding mixed results in evaluating talent and selling the opportunity;
5) Maximizing success for those hired: Most producers sink or swim on their own. While agents/brokers have options to assist newly hired producers, many firms are deficient in an intentional approach to training and development;
6) Owning and leading the strategy: Those that establish a strategy and plan and appoint a key executive to own the strategy tend to be the most successful.
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