P R A D

chapter 7 Maximizing Success for Those Hired

Perhaps no single issue has undergone a greater shift in mindset in recent years than the issue of producer training and development. For many firms, the active management and training of producers used to be viewed as remedial education for the weak. The mantra, stated by many agency owners, was “If they need to be managed, they don’t belong here.”

Today, the landscape is different. With market-leading firms investing leadership time and capital in building the production force of the future, it is recognized that the development of producers must be a high priority. Leaders have learned the hard way that failed investments in producers are extremely costly.

“We’ve learned that a failed producer hire costs us an average of a quarter-million dollars. If our development program averts failure for just one producer, it saves us enough to invest in three new $75K producers.

A $25 Million Midwestern Agency

Of course, failed hires are an inevitable part of an active producer investment program, since no screening program or development path is foolproof. Yet when it comes to producer development, agencies must do everything in their power to maximize successes and minimize losses. We gathered an extraordinary level of detail regarding producer hires and the way their firms train and develop producers. The intent was to identify patterns of success (and failure) among hundreds of individual producers to understand what development practices allow for the greatest success and what types of producers are most influenced by different training and development styles. Increased specialization is a long-term macro trend in the U.S. economy and in insurance brokerage. From prior research, we know that agents and brokers that specialize tend to grow faster and generate higher profit margins than generalists. In our interviews, we have also determined that producers who specialize early tend to succeed at greater rates and validate faster than those who do not. Across all lines of business, producers that specialize have a higher success rate than those who do not. The type of hire most commonly required to specialize are those hired from within the insurance industry but without sales experience. Those from outside the industry are second most likely to be required to specialize. Specialization also seems to spur more success across all ages. Specialization

37 Producer Recruiting & Development Study