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Agency Infrastructure

"Infrastructure" is the term we use to refer to such organizational and operational tools as organizational charts, job descriptions, salary administration policies, procedures, employee handbooks, etc. Many agencies perceive these "tools" to be nice to have, but not essential to their operations. But the right infrastructure is the foundation for managing your most important asset - your employees.

Agency Organizational Chart
This graphically depicts what the organization looks like. It provides everyone with a broad perspective of roles and responsibilities as well as working and reporting relationships. Every employee should be clear about who they report to. Organization charts also tell a lot about how decisions are made in the agency.

An organizational chart is also a strategic planning tool. As you envision your agency in the future, what kind of organization do you need to support it? Think about future jobs and future reporting relationships. Will your current organization take you where you want to go?

Agency Handbook
An employee manual sets out the employment rules and policies of the agency. Misunderstandings about how vacation and sick leave accrue and may be taken, start/quit times, dress requirements, etc. can be avoided. In other words, many day-to-day employee questions and issues can be resolved by reference to a standardized source. There can be no question of fairness or expected behaviors.

A couple of words of caution: (1) having an employee manual requires that you enforce it consistently - and that it will be updated periodically to reflect changes in employment practice laws as well as agency policies; (2) it is absolutely critical that you have your manual reviewed by your legal counsel.

Job Descriptions
Job Descriptions for management and staff ensure that everyone knows exactly what they are expected to do. Critical to understanding roles and responsibilities, job descriptions should provide strategic perspective as well as accountabilities. After the employee handbook, job descriptions may be the next most important piece of infrastructure to have into place.
One of the fastest ways to get this job done is to have each employee write their own and then review them from a management perspective, creating consistency across jobs. This method tends to perpetuate existing problems, however.

Job descriptions should be written from a strategic perspective of the job - not the employee. What needs to be done and who should do it. The typical job descriptions include:

  • Roles and Responsibilities, which are global in nature, e.g., Responsible for providing ongoing customer service for a group of agency accounts, Responsible to maintain customer data in the Applied system, etc.
  • Usual tasks, e.g., Processing renewal policies, answering customer inquiries and requests for changes, etc.
  • Be sure to include “All other duties and responsibilities as requested by management.”
  • Performance Expectations, e.g., manage a book of business generating revenues between $x and $y, meet agency time service standards x% of the time, may be included as part of job descriptions but are often better handled separately and in conjunction with a regular performance review process.

If you are creating job descriptions for the first time, evaluate the individuals currently in those jobs. You may find mismatches. You may also identify developmental needs. This is where training plans come in.

As you put job descriptions in place, don’t neglect job descriptions for your management positions. In fact, these may be where you want to start.

Salary Administration
A structured salary administration policy sets minimums and maximums for specific positions in advance and will help employees and management plan career paths for employees by placing positions along a continuum of skills, experience and education. The structure ensures fairness and avoids paying for tenure rather than value. There is a detailed description of a salary structure, along with some examples, in the Appendix.

Compensation Plan
The salary administration policy administers a compensation plan that should support the goals of the agency. In other words, you should pay for what you want. An established strategic compensation plan guarantees that employees focus on those activities that will produce the results the agency is seeking and are compensated fairly for their efforts. In addition to being a help to fair employment, a well thought out compensation plan will also support the need to control the highest costs in the agency.

Designing an effective compensation program starts not with the amount you will pay your employees and how you will pay it, but first and foremost, with identifying the agency’s compensation philosophy. Once this philosophy has been identified, the agency can determine its compensation objectives.

Because compensation has an important effect on the agency’s business strategy objectives, it is critical to link the compensation program with those objectives. Think about what the employees need to do to meet the agency’s business goals (boosting productivity, updating agency culture, improving workflow processes, increasing customer satisfaction, etc.), and then make certain that the compensation plan rewards those actions. External competitiveness is also critical.

Your compensation program should help your agency:

  • Recruit the best staff available
  • Retain these employees through motivation and incentives
  • Reward behavior that helps the agency meet its overall business goals

Since agency operations are not static, the philosophy toward compensation should not be either.

Ongoing evaluation and modification will be necessary In order to keep the plan aligned with changes in agency structure, employee responsibilities and overall agency mission.
Think in terms of total compensation - wages and benefits, as well as all other rewards. Traditional financial rewards can be combined with non-financial rewards to create a unique compensation package that will help you attract and retain the best employees. There are basically 5 types of rewards that can be used to compensate and motivate:

  1. Financial - The dollars and cents paid directly for a job well done.
  2. Professional - Rewards that provide employees with a benefit of continuous development. The agency’s return comes through the stability of a highly skilled support team.
  3. Emotional - These include promotions, recognition programs, skills development and career pathing.
  4. Security - Cost of living increases, profit-sharing and retirement plans.
  5. Pay for Performance - Rewards employees who are connected to the agency’s business goals. Employees who perform up to or exceed performance expectations receive corresponding benefits.

To determine what type of compensation plan is right for your agency, you may want to begin with reviewing industry specific salary survey data. Accurate salary data is the basis for sound compensation administration. Business Management Group conducts a bi-annual nationwide survey. To order a copy of the most recent survey, call BMG at 1-800-772-0208. You may also have local sources for salary data that will be reflective of business in your immediate marketplace. Contact your local Chamber of Commerce.

Additional information on Producer Compensation is included in the Appendix. Also included are examples of compensation plans and alternatives for both producers and staff.

Performance Evaluations
A formal process for evaluating performance is one of the cornerstones of your compensation program. Employees should not be rewarded for poor performance.

In order to perform well, employees need to know what is expected of them. Each employee should have clearly defined performance expectations communicated regularly, because they change. Once expectations have been established, employees should be in no doubt as to how they are
performing to those expectations. The fact that they are able to track their own performance does not, however, preclude the need for regular communication from management. Meeting expectations should be recognized. Exceeding expectations should mean greater rewards. Failure to meet expectations should result in corrective action.

Written Procedures
Documented procedures including the workflow processes that they support ensure that there are standardized processes throughout the office. In automated agencies, procedures of often governed by system requirements. Critical for errors and omissions loss prevention, written procedures also provide the basis for training staff.

Once procedures are documented, it is also critical to review and update them periodically. Whether writing new procedures or updating existing ones, getting the entire staff involved makes the process much easier.

Staff meetings or small teams can take on agency core processes one at a time. They should review the steps in the process and identify who performs the step. Where there are multiple people performing each process, all should have an opportunity to validate the process to ensure that everyone is doing it the same way. Note where there are differences so that the final process will include the best input from all concerned.

Then analyze the process for duplication, circular steps and activities that don’t add value. Think of non value added as those activities that customers don’t know about and wouldn’t be willing to pay for if they did. Where the analysis indicates changes are necessary, document the changes, and then communicate them to everyone. Where the changes impact other areas, be sure to get their input before finalizing any process.

An excellent resource is ACORD’s Managing Your Automated Agency. It will provide help in getting started. In addition, because it includes the typical steps in each process such as new business, renewals, endorsements, etc., it can validate existing processes.

Training and Development Plans
Lack of training is a common complaint in employee surveys or when talking with agency staff. And yet, so often we hear agency principals and managers say, “We don’t have time....” This is a “pay me now or pay me later” issue. The costs of not having a well-trained staff are enormous -- poor morale, inefficiency, errors and rework, dissatisfied customers, potential Errors & Omissions. A structured approach to training and development of staff is a necessary infrastructure component.

To understand just exactly what kind of training each individual needs:

  1. Clearly define the job (another reason why written job descriptions are critical components of infrastructure). What are the skills required? What must the individual know and be able to do to be successful?
  2. Assess each employee. How is the individual performing the job? Can performance problems be attributed to lack of training? What experience does he/she have? How does it relate to the current position? To other jobs in the agency?
  3. The gaps - the differences between what the employee already knows and what he/she needs to know - become the critical elements of an individualized training plan.

Identify sources for training:
In most cases training resources exist in the agency. Producers, managers, CSRs and others all have individual expertise that can be brought to bear when training individuals or groups of employees. Following is a list of some of the additional resources available to you.

  • There are self-study programs to teach and reinforce technical insurance subjects.
  • Industry groups and professional organizations provide training for both technical knowledge and sales skills.
  • Your insurance carriers are a source of technical training, especially on their targeted products and programs.
  • There are vendors who specialize in skill training in areas such as use of automation. Your automation vendor is also an excellent source for training on your system.
  • Even your customers can provide some training. Understanding the business of your customer is what niche marketing is all about.

Even where the training is within the scope of the agency, it’s still important to identify how the training will be accomplished and who will be responsible for getting it done.

Once individual training needs have been identified, build a training matrix for the agency. A document that helps managers and staff stay focused on what training is required, by whom and when, will be invaluable. This can be a simple document created in Word or Excel and might look something like this.

Training Need
List the specific training needs here, e.g.,
Employee/Time Frame
Each column should represent an employee. As training is scheduled and completed, indicate it in the appropriate space, e.g.,
New Business Processing
Activity Logging
Proposal Creation

A commitment to an organized and methodical approach to training in the agency helps solve another problem, that of finding good people. If you have a culture and an infrastructure that allows you to train well, you can afford the luxury of finding good people who don’t necessarily have insurance training.

Producer Contracts and Employment Contracts
Producer contracts can substantially increase the value of the agency since they generally set forth non-disclosure and non-piracy protections for the agency and the book of business. If they are not in place, the value of the agency is reduced. You should have non-disclosure agreements with all your employees.

Where there are no contracts of any kind, producers who leave not only take their own business but could end up competing with you head-to-head on your own accounts.

“The greatest problem of communication is the illusion that it has been accomplished.”
- George Bernard Shaw

An effective methodology for clear communication throughout the agency should also be considered part of the infrastructure. It is an area commonly identified by agency staff as needing improvement. You’ll need to develop and implement a communications structure that facilitates the following:

Information Flow
Communication & Information Source

Producers & Staff

Feedback, information and general dialogue from Owner/Management to Sales, Service and Support Staff.  This should include, but not be limited to agency and producer strategic direction and goals; carrier direction and goals; technical information. This is also the place to recognize and reward achievement, both individual and agency.  (This is not the forum for reprimands or punishment.)  Formal agency or department meetings are the best way to facilitate this kind of communication exchange.  Meetings should be scheduled and there should be an agenda.

Agency-wide meetings should also give you the opportunity to put some fun into your business.  Have a contest.  Or maybe even better, establish an agency goal with some kind of reward attached that everyone can share in.  Get everyone involved in your plans for the agency.  Help them understand their part in the agency’s future successes. 

 CSRs &
Marketing Staff

Feedback, information and general dialogue from Producers to CSRs and Marketing Staff.  This should include, but not be limited to sales and service goals; carrier direction and commitments; technical information; client information; account information.

This kind of communication can be handled in formal meetings and informal sessions.  Broadly applicable information, e.g., carrier appetites, should be done in group meetings that are regularly scheduled and include an agenda.  There should also be a forum for producers to meet with their individual support group to discuss account information.  And the support group includes both CSRs and Marketing staff.

(Including Marketing)

Feedback, information and general dialogue from CSR to CSR, including Marketing staff, as they are an integral part of servicing the customer. This should include, but not be limited to carrier direction and goals; technical information; workflow and business processes information; client and account information.

A good deal of this communication will be done informally.  However, regularly scheduled meetings provide a venue to exchange universally needed information and promote creativity.

Home Office
Branch Office

In multi-location agencies, communications take on a whole new dimension.  Often governed by the supporting technology, communication needs to be planned and maintained to create the appropriate unity and to ensure consistency of process and procedure.  Branch office staff often feels like “second class citizens with little input to how things are being done. 
Regular and planned visits by owners and managers keep locations aligned with overall goals and strategies.  Include operating managers, e.g., accounting, human resources, marketing (placing), etc. in the process.  Both meetings and one-to-one communication sessions are helpful.  E-mail is a very effective tool for communication across locations and should be used for maximum benefit.

Branch office staff should be included in committees, teams or workgroups when formed to address agency processes, procedures or matters of universal concern.

If you need help making sure your infrastructure supports your vision and your goals, call Pam at  530.295.1093 or e-mail

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