This is one of those "no-brainers" that has me scratching my head... that is, why don't more insurance agencies employ a telemarketing component to their sales force? Most really good insurance producers are reall good because they can "connect with people" - they can build relationships AND close the deal...imcompatible skills with that of a telemarketer. So why do most agencies expect their producers to be both cold-callers AND deal-closers? Good question.
Being the largest search firm specializing in insurance sales on the East Coast and listening carefully to hiring authority feedback, we have a unique insight into what makes the great insurance agencies GREAT and the mediocre insurance agencies....well, not so good. Try revenues down 40% year over year. What is the critical factor between the winners and the losers? Simple: Telemarketing.
The great agencies "get it". One agency (that will go unnamed) has five full-time telemarketers who continually set up pre-qualified meetings for their producers. How good are these meetings? Try 2.75:1 closing ratio...not bad - industry average is 5:1...and in the soft market we are now in - forget about it! And morale is at all time high as the producers are out doing what they like best...meeting people and closing deals.
How do they keep the telemarketers honest and setting up good meetings - easy, the producers rate the appointments and compensation for the telemarketers is based, in part, on quality appointments. Producers in this particular office are getting between 8 - 10 qualified appointments per week. Wow.
Moreover, some are using the telemarketer position to hire entry level candidates in the hopes of growing a few good producers. Nice.
Welcome comments on this one.
July 11, 2009
July 3, 2009
Background Disclosure
If I had a nickel for every candidate who loses a job because they chose not to disclose either a DUI, Foreclosure, Bankruptcy, or civil/criminal offense, before the client background checking process commences, I would be a millionaire.
I had a candidate this past week tell me during the reference process that, "oh, by the way, Rob, I do have a DUI and filed for bankruptcy two months ago". Say what? They did not get the job...and I expect to see them as a Walmart greeter in the months to come because I doubt their duplicity will end with this bad experience.
The truth of the matter is that if candidates disclose "bad news" to their recruiter/hiring authority up front in the beginning of the process, we can properly manage expectations with the client and address the issue up front - when doing this, it has rarely been an issue....BUT if you wait until the end of the process, you will surely not get the job - soooooo, be honest and upfront folks!
I had a candidate this past week tell me during the reference process that, "oh, by the way, Rob, I do have a DUI and filed for bankruptcy two months ago". Say what? They did not get the job...and I expect to see them as a Walmart greeter in the months to come because I doubt their duplicity will end with this bad experience.
The truth of the matter is that if candidates disclose "bad news" to their recruiter/hiring authority up front in the beginning of the process, we can properly manage expectations with the client and address the issue up front - when doing this, it has rarely been an issue....BUT if you wait until the end of the process, you will surely not get the job - soooooo, be honest and upfront folks!
June 29, 2009
First Half 2009 - Road to Recovery...
Many of you have already received our salary survey for H1 2009 which indicates that compensation levels are down to 2006/2007 levels, which is not surprising given that compensation levels (along with real estate prices!) seemed to be rising by the day last year during 2008.
At the same time, we are finding that many candidates are no longer focused on simply, "how much money am I going to make?" Based on our candidate feedback, money is now #4 on most everyone's wish list. #1 is corporate culture fit, #2 is work/family balance and employee benefits, and #3 is professional growth. The only exception is for 'hunter producers'...their #1 motivation remains,"how much money can I make and how much wealth can I create". Hurray! What would the world be without producers?? After all, who do you think pays the bills?
In the executive search business, summers are usually a slow time to revise business plans, etc., but we have three of our top four clients with the pedal on the metal to find top-shelf talent to bring on board in Q4 as they are already experiencing signs of an uptick in business - hey, let's keep our fingers crossed!
And pls let me know if you did not receive a H1 Salary Survey for insurance brokerage professionals in the WDC metro area. rob
At the same time, we are finding that many candidates are no longer focused on simply, "how much money am I going to make?" Based on our candidate feedback, money is now #4 on most everyone's wish list. #1 is corporate culture fit, #2 is work/family balance and employee benefits, and #3 is professional growth. The only exception is for 'hunter producers'...their #1 motivation remains,"how much money can I make and how much wealth can I create". Hurray! What would the world be without producers?? After all, who do you think pays the bills?
In the executive search business, summers are usually a slow time to revise business plans, etc., but we have three of our top four clients with the pedal on the metal to find top-shelf talent to bring on board in Q4 as they are already experiencing signs of an uptick in business - hey, let's keep our fingers crossed!
And pls let me know if you did not receive a H1 Salary Survey for insurance brokerage professionals in the WDC metro area. rob
May 30, 2009
Hiring Very Strong Once Again
Wow - what a difference a few months makes! Just in the past 45 days, we have seen a significant resurgence in hiring on the Employee Benefits side AND now the P&C side once again. Our levels are not yet back to our 2007 levels, but back to our 2008 levels. Again, we have more searches than we can handle, so we are back to the practice of simply refusing client searches. If the client is not responsive and ready to roll, we simply decline the assignment.
That said, there is a divergence in compensation levels as brokers are agressively seeking "hunter" producers with above 2008 compensation levels, and, in many cases, are actually paying attractive sign-on bonuses now - unheard of only a few months ago. And producers with books of business are gold. We placed three of these in the past month - easy stuff.
On the other hand, the market for CSRs and account managers continues to be dismal - little movement. As an example, a ten year veteran account manager making $82k just one year ago just accepted a position with a client of mine for only $57k - wow!
Many of the smart hiring authorities are taking this opportunity to raid their competitors for A++ talent, which of course, is the smart thing to do. One such mid-level broker client is really loading up on producer talent now and is well positioned for the turnaround - their plan is to dominate their sector and run the competition out of town by end of 2010. Needless to say, they are well positioned for the future. They are in a smaller market than NoVA, but nonetheless, they are pretty ruthless in gaining market share.
Hiring is very strong on the international side of our business as many of the large insurance companies continue to strategically open TMDs (Threat Management Divisions) throughout the Middle East and South Asia.
That said, there is a divergence in compensation levels as brokers are agressively seeking "hunter" producers with above 2008 compensation levels, and, in many cases, are actually paying attractive sign-on bonuses now - unheard of only a few months ago. And producers with books of business are gold. We placed three of these in the past month - easy stuff.
On the other hand, the market for CSRs and account managers continues to be dismal - little movement. As an example, a ten year veteran account manager making $82k just one year ago just accepted a position with a client of mine for only $57k - wow!
Many of the smart hiring authorities are taking this opportunity to raid their competitors for A++ talent, which of course, is the smart thing to do. One such mid-level broker client is really loading up on producer talent now and is well positioned for the turnaround - their plan is to dominate their sector and run the competition out of town by end of 2010. Needless to say, they are well positioned for the future. They are in a smaller market than NoVA, but nonetheless, they are pretty ruthless in gaining market share.
Hiring is very strong on the international side of our business as many of the large insurance companies continue to strategically open TMDs (Threat Management Divisions) throughout the Middle East and South Asia.
April 19, 2009
Downward Pressure on Compensation Continues..
We hope all is well in these challenging financial times.
Due to the large volume of calls being received from hiring authorities inquiring about the status of the employment market, pricing activity, M&A flow, compensation movement, and candidate supply/demand, I decided to make my bullet point response available equally to all clients. Hopefully, you will find these useful:
1. Employee Benefits vs. P&C: there has been a very significant shift from hiring on the P&C side to the Employee Benefit side. Our practice has gone from a 70/30 split (P&C/EB) to 80/20 (EB/P&C) during just the past six months with an almost frantic demand for hunter-type producers on the EB side of the house.
2. Pricing: Based on what we are hearing, the downward pricing spiral for P&C appears to be flattening out, but no real signs of a hard market yet although most expect this to develop by year-end. If your top line revenues on the P&C side are not down by more than 30% year over year, you’re doing better than most, while EB seems to be holding its own.
3. M&A activity: There is, in fact, a significant amount of M&A activity occurring in the small to midsize agency sector right now. This includes everything from large books of business being purchased outright to agencies combining to achieve scale and efficiency. We are currently involved in 4x as many transactions since third quarter 2008 compared with the same prior year period. Of course, our role is more of matchmaking and not on the deal structuring side. If you have a specific M&A profile you are searching for between the Philly and North Carolina area, just let us know as we are coming across these on a more regular basis now.
4. Compensation Movement: We are also seeing compensation levels returning to pre-2008 levels for account managers and support staff whereas compensation packages for A+ producers are continuing to rise. Year over year, base salaries being offered for commercial account managers on both the EB and P&C side are down an average of 7.4% which is unprecedented.
5. Candidate Supply/Demand: Recently, I have seen some of the best senior commercial and employee benefit account managers/executives to surface in the past five years. Recent downsizing and organizational restructurings mostly account for this sudden breakthrough. And producers with books of business continue to be in high demand.
Hang in there!
We look forward to your continued business and valuable feedback.
Due to the large volume of calls being received from hiring authorities inquiring about the status of the employment market, pricing activity, M&A flow, compensation movement, and candidate supply/demand, I decided to make my bullet point response available equally to all clients. Hopefully, you will find these useful:
1. Employee Benefits vs. P&C: there has been a very significant shift from hiring on the P&C side to the Employee Benefit side. Our practice has gone from a 70/30 split (P&C/EB) to 80/20 (EB/P&C) during just the past six months with an almost frantic demand for hunter-type producers on the EB side of the house.
2. Pricing: Based on what we are hearing, the downward pricing spiral for P&C appears to be flattening out, but no real signs of a hard market yet although most expect this to develop by year-end. If your top line revenues on the P&C side are not down by more than 30% year over year, you’re doing better than most, while EB seems to be holding its own.
3. M&A activity: There is, in fact, a significant amount of M&A activity occurring in the small to midsize agency sector right now. This includes everything from large books of business being purchased outright to agencies combining to achieve scale and efficiency. We are currently involved in 4x as many transactions since third quarter 2008 compared with the same prior year period. Of course, our role is more of matchmaking and not on the deal structuring side. If you have a specific M&A profile you are searching for between the Philly and North Carolina area, just let us know as we are coming across these on a more regular basis now.
4. Compensation Movement: We are also seeing compensation levels returning to pre-2008 levels for account managers and support staff whereas compensation packages for A+ producers are continuing to rise. Year over year, base salaries being offered for commercial account managers on both the EB and P&C side are down an average of 7.4% which is unprecedented.
5. Candidate Supply/Demand: Recently, I have seen some of the best senior commercial and employee benefit account managers/executives to surface in the past five years. Recent downsizing and organizational restructurings mostly account for this sudden breakthrough. And producers with books of business continue to be in high demand.
Hang in there!
We look forward to your continued business and valuable feedback.
January 20, 2009
New Compensation Models Emerging....
During the past week, I came across an interesting compensation plan for a producer that I had never come across before. Usually, it is the standard two year non-recoverable draw or declining base salary model, but this one specifically addresses the producer who brings significant BORs to his new employer.
Here's how it works: Let's say the producer has a demonstrated compensation history of say $150,000. He departs his existing firm (Firm A) after two years and begins to roll over previous clients from the firm he worked for previous to Firm A. Call this Firm B. Since his two year non-compete from Firm B is just now expiring after two years, new producer calls on his previous customers from Firm B and learns that he can roll over a significant portion of this business. Hence, his new firm (Firm C) hires him on the basis that he can bring over a significant portion of these Firm B BORs. As such, to mitigate the risk of a high starting base salary, Firm C offers new producer a very low base ($70,000), but promises new producer 100% commissions (dollar for dollar) for any BORs delivered; to be immediately paid upon BOR presentation. At a negotiated compensation level (say $150k) the standard compensation plan takes over.
This is a win-win for both parties as the employer is not on the hook for a large monthly committment from Day One and, if the producer delivers, he/she can quickly get to their previous level of compensation without having to painstakingly build their book of business all over again.
Feel free to give me a call on this compensation plan or any others as firms are getting very creative given the current economic climate.
Here's how it works: Let's say the producer has a demonstrated compensation history of say $150,000. He departs his existing firm (Firm A) after two years and begins to roll over previous clients from the firm he worked for previous to Firm A. Call this Firm B. Since his two year non-compete from Firm B is just now expiring after two years, new producer calls on his previous customers from Firm B and learns that he can roll over a significant portion of this business. Hence, his new firm (Firm C) hires him on the basis that he can bring over a significant portion of these Firm B BORs. As such, to mitigate the risk of a high starting base salary, Firm C offers new producer a very low base ($70,000), but promises new producer 100% commissions (dollar for dollar) for any BORs delivered; to be immediately paid upon BOR presentation. At a negotiated compensation level (say $150k) the standard compensation plan takes over.
This is a win-win for both parties as the employer is not on the hook for a large monthly committment from Day One and, if the producer delivers, he/she can quickly get to their previous level of compensation without having to painstakingly build their book of business all over again.
Feel free to give me a call on this compensation plan or any others as firms are getting very creative given the current economic climate.
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