If you’re not thinking strategically about the relationship between your employees and your bottom line, it’s time to start. Do you view your employees as your biggest asset or your biggest expense?
If employees aren’t given the right tools to do their jobs effectively, for example, or if they’re treated unfairly or are overworked and stressed out, they can become frustrated and unhappy. This has a negative impact on their productivity. More important, disgruntled employees can be disruptive to the entire organization, sharing their discontent with whomever will listen. This attitude rubs off on others, bringing the morale of the entire organization down.
Low morale also takes its toll as your staff attempts to provide customer service. You can hear it in their voices; it shows in their attitude. Certainly they’re not focused on looking for ways to delight your customer. Nor are they attempting to cross-sell accounts or upgrade coverages.
There’s also a compounding effect. Studies have shown that increasing client retention by just 5 percent can boost an agency’s profitability by 50 to 100 percent or more. But the reverse is also true. Dissatisfied employees can cause retention to drop significantly. Lower retention equates to lower profits.
Turnover is troubling.
Even in a job market that seems like it would work in your favor, it’s very challenging to find qualified people. The fact is that there are not very many people “out there” who have the insurance knowledge and the job skills you’ll need to fill an empty position. It’s unlikely you’ll find your next employee coming to you for a job unless he or she has been unable to find or keep a job someplace else. Regardless of how qualified they are, a new employee will need to acclimate to your workflow and culture and get up to speed to become productive. This will take some time. Turnover is not only disruptive, it’s expensive. If you would like to understand the true costs of turnover, check this out.
Assuming you’re convinced that you need to be investing as much--or more--in finding and keeping good people as you spend in finding and keeping good customers, what should you be doing? The most profitable insurance agencies:
- Recruit constantly. Whether or not they have a specific job vacancy, they’re always on the lookout for qualified--and quality--people. When an opening does occur, they know whom to call. Some agencies even bring quality people into their organizations before they have vacancies.
Build bench-strength. They create the kind of organization that encourages people to prepare for their next job. When vacancies occur, they may have someone already on staff who can fill the position, which is faster, more productive (much shorter learning curve), and less expensive (no recruiting costs).
- Train and develop their staff. They have formal training programs for new employees and provide staff with ongoing training to improve skills and build professionalism. They encourage mentoring (which is different from training) because they know it’s key to the successful development of new employees. The best agencies provide their employees with intellectual challenge and the opportunity to grow.
- Create a great work environment. They involve their people in the strategic vision of the business, and they have goals that energize the organization by connecting with the personal values of the people who work there. They encourage their employees to have fun and to take pride in the contribution they make to the organization and to the community. They support their employees’ need to balance their personal and business lives.
- Provide the tools their employees need to do their jobs effectively. They use technology to drive processes and they make sure their workflow really works. They want the best people doing the right things right.
The best agencies don’t always pay the highest salaries, but they pay their people fairly and competitively. And they provide benefit packages that include both necessary and nice-to-have features.
In short, the most profitable agencies understand the relationship between satisfied employees and satisfied customers, which ultimately determines their bottom line.