So far, in our six-part series on becoming an independent agent, we’ve covered the initial steps on getting your insurance agency up and running. Now it’s time to move onto a concern you’ll likely have further down the line — staffing.
Once your book of business grows sufficiently, it’s probably time to start hiring people to take on key responsibilities. That way, you can focus on the big picture while employees handle the day-to-day tasks of running a successful agency.
Here’s how to know when it’s time to hire new people, what options you have and what specific roles these first hires will likely step into.
Get Your Timing Right
First things first. You need to make sure you don’t jump the gun when thinking about adding employees.
“Bringing on an employee is a huge step, and a risky one,” writes attorney Matthew Podolsky. “Recruiting, training and paying a salary and benefits is no small thing, and it should only be undertaken under certain circumstances.”
If your business is becoming difficult to manage due to increased workload, those circumstances may have been met. There are specific signs that indicate it may be time to hire, Podolsky adds. These include not having enough time to devote to your current list of customers, and having enough work for the foreseeable future to hand off to other employees.
Another classic sign that it’s time to hire is when you’re coming up against situations where you’re forced to turn down new business because you don’t have enough employees to handle the work, says the team at recruiting software platform Optimize.
Further, you must be sure you have adequate cash flow as well as the space and equipment to accommodate employees, notes Jaime Lizotte, HR and tax solutions manager at ComplyRight, Inc, a provider of compliance products and programs for business. Besides simply having the need for additional manpower, you must be capable of handling the financial and administrative aspects as well.
And finally, a new employee should be profitable. After factoring in their salary, taxes and additional overhead costs, will your agency be generating more revenue? That’s what business journalist and digital consultant John Boitnott says you should ask yourself because, at the end of the day, the increase in your overall earnings should justify the acquisition.
Let’s assume that you meet this criteria and want to bring new talent on board. You have two main options — hiring in-house or outsourcing. Here are the advantages of each.
This is the more conventional approach and tends to be best when you want someone you can work with face-to-face and collaborate with on strategic projects, writes Gary Wilkinson at Bit Rebels. Although technology has come a long way, and it’s never been easier to communicate with remote staff, working with in-house staff allows immediate availability and hands-on engagement.
If you’re involved with local customers in your area, hiring in-house can also be beneficial because an employee will live in and be familiar with the community. If they were selling homeowners insurance, for example, they would likely possess more knowledge to assist customers with finding the right policy than someone who was outsourced somewhere else in the world. This can be advantageous if being branded as your community independent agent is one of your main selling points.
An alternative option that’s surged in popularity as of late is outsourcing, where you partner with subcontractors who work remotely. Tech reporter Ryan Browne writes that worldwide, 70 percent of professionals worked remotely at least once a week in 2018, with 53 percent doing so at least half of the week.
With a growing body of technology like project management software, document sharing apps and digital communication tools readily available, outsourcing is becoming easier to do and a realistic option for many independent agents.
One of the key advantages is having access to specialized global talent. “A lot of outsourced tasks can be carried out remotely, anywhere in the world,” says business growth strategist Dan Todd. “That means you have access to a much larger pool of candidates, compared to if you were looking to hire locally.” If you live in a small or rural area, this can make a big difference and help you find experts that may be impossible otherwise.
Another is the savings. You reduce any overhead costs with virtual workers, and if they’re not hired as permanent employees, you avoid costs related to health insurance and other benefits. In one survey, 62 percent of companies report spending 10 to 25 percent less by outsourcing, and 38 percent save as much as 40 percent or more, writes Emily Lundberg at virtual services provider Prialto.
Outsourcing also offers a lot of flexibility. Newer agents who are still establishing a business foundation often experience workload ebb and flow. By outsourcing, you can adjust the amount of work you send to subcontractors to fit your needs, explains HR writer Libby Calaby. If you anticipate your workload fluctuating, this is certainly something to look into.
For a more detailed overview of the differences between in-house hiring vs. outsourcing, Laurynus Pletkus, cofounder and CEO of software development and product design company Scale3C, created a helpful guide that discusses the pros and cons.
Roles to Hire For
In terms of specific roles to hire for, you’ll usually want to start off with account management. That’s primarily what most recruiters in the insurance industry are seeking out these days.
“CSR, assistant account manager, account manager roles are the bulk of what we are always trying to fill,” explains Taylor Jones of business development director at Questpro Consultants, a staffing company that focuses exclusively on the insurance industry. “Every client that we speak to always says, ‘if you ever have an account manager, send them over, we want to see them, we want to meet them.’”
These individuals are responsible for reviewing and managing customer accounts, handling paperwork and administrative tasks, updating contact lists and finding referrals from existing customers, according to salary comparison site PayScale. Hiring the right account manager can take a lot of work off of your plate, while still ensuring your customers are taken care of.
Maintaining great relationships is vital to the long-term success of your agency, so another position you may be interested in hiring for is a customer relationship manager. Their focus is on engaging with your customers and building a deeper level of trust, states online hiring resource Betterteam. They’ll also be responsible for coming up with solutions to common problems in order to ensure a higher level of customer satisfaction and enhance your brand reputation.
Hiring for this role makes sense if you have a loyal customer base but don’t have the time to personally maintain close contact with everyone. In this case, a customer relationship manager can keep these relationships strong and increase your retention rate.
If your main objective is to generate more leads and build your customer base, you may want to hire a marketing professional. They will be skilled at cutting-edge techniques like SEO, social media, content marketing and pay-per-click advertising and help devise effective strategies to get your insurance products in front of targeted leads, explains the staff at BusinessEx, a digital platform that connects business buyers and sellers.
There’s a lot that goes into effective hiring. For direction on developing a basic recruiting strategy, business writer Joshua Stowers created a great resource that can help you get started.
Set Your Insurance Agency Up for Success
Business growth is good. Experiencing growth at a rapid pace shows you’re doing something right, says digital marketing consultant Sheila Eugenio.
Knowing when it’s time to bring on additional staff and understanding the basics of the hiring process will increase your odds of finding top talent that fits in with your creative vision and sustain that growth for the long term.
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