P R A D

chapter 10 Call to Action

There are some key take-aways from this study that are a call to action.

55-60% of firms are hiring at levels that will not support desired growth

Our analysis suggests that 55-60% of firms are hiring at levels that will not support their ability to grow at levels targeted or at levels that will allow them to perpetuate their ownership, if it is their desire to do so. What is even more troublesome is that many of these firms do not know that they are behind, or the extent to which they are behind. This shortfall is a problem for every one of these agencies because it is limiting the growth of their value and is jeopardizing their ability to accomplish other objectives like maintaining private ownership. This shortfall is also a problem for the insurance carriers that depend on these firms to sell their products and services and that are counting on them to grow and increase their capacity to sell their products and services.

Only 35% of hires are new to our industry – this is a real problem

Sixty-five percent of those hired in producer positions are coming from inside our industry and are simply “changing seats on the insurance agency/brokerage bus.” This is great for those that are winning the battle for this talent but it does suggest that, as an industry, we must elevate the number of talented men and women that are being recruited into our industry. There is a key message here for every agent and broker but it is also a message for the insurance carriers that depend on the insurance distribution system and for the organizations that serve and support agents and brokers. Individual and collective efforts need to be made to attract more talented men and women into our industry. There is no reason that cannot or should not happen based on all that our industry has to offer.

The cost of failed hires is high – you can afford to spend the money to do it right

The direct expense for failed hires represents only a fraction of the total actual loss incurred. Seventy-five percent of all firms are achieving success rates that are less, and in many cases materially less, than the success rates that the top 25% are proving can be achieved. These differences in hiring success have huge financial implications. There are the direct losses as well as in the value of the business that would have been produced (but was not) and the increase in earnings that would have been generated (but were not) if they would have had success rates that this study has shown can be achieved. Agents and brokers can afford to and should make the investments needed to do it right.

57 Producer Recruiting & Development Study