Agencies’ hiring success rate is dismal: Industry report

It’s no secret that the independent agency sector is facing a hiring crisis. With an aging industry and little consideration among job hunters of insurance as a viable career option, agencies and brokerages are facing a tall order in adequately preparing for the future.

And so far, agencies have been seriously lacking in performance.

A recent study from Reagan Consulting reveals that agencies are posting a troubling 56% percent success rate in hiring new employees. Even more concerning, many agencies are not hiring at all—55% to 60% of firms are “under-hiring,” or failing to bring on enough new producers to achieve their growth targets and perpetuate their business successfully.

The firm’s president, Kevin Stipe, finds this trend particularly alarming given its context.

“In light of the fact that our industry is aging and that nearly half of a typical agency’s business is handled by producers age 50 or over, this is alarming,” Stipe said. “Is the industry facing a perpetuation crisis?”

Part of the problem may have to do with the pool in which hiring agencies are drawing from. Just 35% of surveyed firms were reaching outside the industry to find new hires—including in college—while existing producers account for 55% of new hires in the past five years.

That trend was reflected in Insurance Business America’s own poll in August and September of last year. A full 65% of readers said they look to “the competition” when hiring new producers, while just 20% recruit at college job fairs or outside the industry.

This approach may be the most expedient, but agency owners who fail to pursue those outside the industry may be overlooking a solid source of talent. When Stephen Riemer began to build up the sales force at Riemer Insurance Group, he quickly discovered the value of insurance newbies.

“I began my campaign by trying to hire people from within the industry, but I couldn’t make it work,” Riemer said. “After the third person, I realized I was doing it wrong. I started bringing in people from outside the industry.”

Riemer targeted proven salespeople who had a solid book of business, but who had never worked in insurance sales. Using their contacts, the producer would pursue insurance sales with new and existing accounts.

The approach worked. Today, Riemer Insurance Group is a multi-million dollar business known for its successful producer workforce.

Indeed, the Reagan Consulting study found that the top 25% of firms have a hiring success rate of 84% while those in the bottom 25% of firms succeed in bringing on new producers just 22% of the time.

Originally posted on Insurance Business  America