P R A D

Hiring By Starting Rate of Compensation

There is a stronger correlation between level of compensation and level of success. However, success is not determined by compensation, but the drivers of compensation (experience, aptitude, ability, book of business, proven prior success) lead to success. The more of these qualities a producer has, the more success they are likely to achieve. All lines of business exhibit a similar trend, though the correlation between success rate and starting compensation is more pronounced in commercial lines. The higher success rates for those with higher compensation are impacted by hiring of producers with books of business. Of those producers hired with an initial starting compensation over $100,000, 36% brought a book of business, versus only 10% of those hired with compensation under $100,000. Agents and brokers will weigh the pros and cons of hiring more expensive talent. While higher success rates are probably likely, success is not guaranteed and the investment is significantly greater.

Producer Hiring by Compensation Range

81%

77%

76%

65%

63%

61%

61%

52%

31%

29%

15%

8%

6%

4%

3%

3%

< $50,000 $50,000 - $75,000

$75,000 - $100,000

$100,000 - $125,000

$125,000 - $150,000

$150,000 - $175,000

$175,000 - $200,000

> $200,000

% of Producer Hires

Success Rate

Source: Supplemental survey

Hiring by Size of Firm

Intuitively, one might assume that larger firms are better equipped to recruit, hire and train. The results do not support this premise. Here are the actual results for firms by size.

22 Producer Recruiting & Development Study