If your small business provides insurance, you work in an industry that experiences employee turnover rates in excess of 12% (as of 2005) according to the Insurance and Technology website. This turnover rate can make it difficult to sustain efforts to increase sales, and can cost you money when employees leave before you get the full benefit of the training you provide. Once you understand the causes of insurance-industry turnover, you can take steps to keep employees.
Many insurance employees leave a company to seek a higher salary. This means you have room to negotiate with an employee who wants to leave. However, that doesn’t mean you should throw money at employees to keep them with your agency. Use salary negotiations as a basis to ask for higher productivity. By challenging an employee and paying more at the same time, you have a chance of retaining him/her.
You can ask employees to sign a non-compete agreement, whereby they agree not to work for a competitor or start a competing business for a certain period of time after their employment with you ends. In some states, such as California, these agreements are banned. In the majority of states, however, you can ask for and enforce a non-compete agreement in the insurance industry. This can help reduce your turnover.
When you do lose an employee, conduct an exit interview to find out what you can do better. These interviews tend to be very honest, and you can discover areas that you can improve to retain employees longer. In the insurance industry, you may find that some employees simply prefer less sales-oriented work, but you can also find salespeople who would stay if you changed certain working conditions.
Conduct Applicant Screening
The insurance industry requires a special mindset, particularly if your new hires will be involved in selling. Screen applicants thoroughly to make sure they have the attitudes and skill sets necessary for your company. You can do this via questionnaires and through direct questions in the interview process. Hire only those applicants who demonstrate an ability to adjust to your work environment, and you’ll experience less turnover.
Provide Incentives for Longevity
You can offer rewards for sticking with the company, such as a promotion to management. An employee who has an opportunity to move into management will be less likely to make a sideways move to an insurance company where he’ll have to start over again in terms of longevity. The insurance business offers many management opportunities, including risk management positions, sales managers, claims supervisors, marketing managers and product administrators. Make your employees aware that longevity improves their chances for moving into management.
Insurance agents must locate clients, create and maintain a client database, develop new contacts and follow up with potential clients. This can be a stressful process. Provide support and help for these functions and your agents will be less likely to go to another company where they might have to work in isolation. Your support system can increase insurance agent retention and improve your sales at the same time.
Article By: Kevin Johnston