P R A D

chapter 4 Determining Who to Hire

In order for agents and brokers to execute an effective producer development initiative, many choices must be made, recognizing that each choice brings with it material ramifications. Different firms have different results, even when going after similar producer candidates. This happens for two primary reasons. The first is how effectively firms execute the hiring and development of producers (quality execution will be addressed in subsequent chapters). The second reason is whether firms are pursuing the candidates best suited for them. We will address the latter topic in this chapter.

Far too many firms are “opportunistic,” which on the surface sounds positive. Shouldn’t everyone try to be opportunistic? To the extent that firms take advantage of great opportunities when they come along, that is good. Unfortunately, in the area of producer hiring, when things “drop into your lap,” far too often adverse selection may

“We have narrowed our focus over the last several years. Our targets are candidates in their late 20s to mid-30s from a variety of backgrounds outside the industry.”

Senior Executive with Northeastern Broker

occur. The best producer candidates are unlikely to drop out of the sky. Some may be good candidates in many respects, but not the right candidate for a particular firm and its unique needs.

The most successful firms are strategic in who they target and are willing to make necessary investments in their recruiting, hiring and development efforts to ensure the success of those hired.

This chapter addresses how to determine which candidates are right for any particular firm to pursue. We consider a number of factors including background, gender, age, and starting compensation. We also look at how the volume of hiring and the size of the firm affects hiring results. Commercial lines and employee benefits producers will often be examined separately.

Hiring by Background

Background of Producers Hired

We will begin by examining the overall hiring data. As stated previously, the industry-wide producer hiring success rate over the past 5 years is 56% for commercial lines and 53% for employee benefits. We also looked more closely at the specific details of the hiring of over 1,505 producers, from 112 firms to determine the level of hiring by background and the success rate differences in the top and bottom 25% of

% Total

Experienced producer

55%

Insurance – not sales

10%

Outside the industry

29%

College hire

6%

Total

100%

Source: Supplemental survey

17 Producer Recruiting & Development Study