Recently, I participated in a 10-day road show for an insurance company. During a dry run of my presentation on customer retention, the company's CEO asked me specifically to emphasize that insurance agencies also need to retain qualified employees.
His request reminded me of a sad truth: My 10 years' experience working on comprehensive customer-retention projects in many industries has taught me that the insurance industry has the lowest commitment to hire, train, and retain highly qualified employees. As a result, it also has the lowest average ratings for employee satisfaction and morale.
You know the truth: Many agencies keep employees solely because of tenure, not qualifications. They don't want to invest the time, money, or effort to help their employees become the best.
Compared against other industries and even other areas in financial services, the insurance industry hires more people without college degrees, invests in less initial and ongoing training, pays lower wages, and rarely offers its employees a piece of the pie. With this record, it's easy to understand why young people aren't exactly flocking to work in the insurance industry.
Reality is knocking loudly-listen! Your employees are the foundation on which you can build a thriving and vibrant business that produces consistently high profits. You must invest in your employees: give them genuine and exciting growth opportunities, compensate them well, and care about them as people. You must make their work fun and meaningful. The service profit chain (as discussed in The Service Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value, by James Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger) illustrates the links between satisfied employees and high profits.
Without highly qualified and motivated employees, it's impossible to create consistently high profits.
Where do you start? The best starting place for all projects is with an honest assessment of yourself. Do you have the vision, the commitment, the passion, the drive, the caring, and the guts to aim for the stars?
Here are the basic steps to create a fun, productive, innovative, and leading-edge agency that will 'Wow!' employees and customers while producing high profits.
1. Create and communicate your vision. As a leader, you need to create an exciting, meaningful, and achievable vision of the future of your agency. Write it down and post it in conspicuous places. Communicate it often to your employees, customers, and prospects. It will be your continuing inspiration.
2. Communicate your expectations to each employee. In many insurance agencies, few if any employees can clearly articulate what's expected of them. They have a general direction, but not a specific destination. It's like giving a person a car and telling him or her to drive to the Midwest, instead of, say, to Cincinnati or St. Louis. I strongly recommend putting your expectations in writing and referring to them when you complete the employee's monthly report card (see No. 9 below) to ensure that everyone's on track.
3. Ask often for employees' ideas and feedback-and listen, and value it. I often find that insurance agency managers don't truly value their employees' input. This is especially true of the front-line employees. Suggestion boxes just don't cut it any longer. Ask your employees frequently for their ideas and suggestions when you have a problem to solve. Make it clear that you're asking for input but that you'll still make the final decision. When you make your decision, thank everyone for their ideas and explain the reasons for the outcome. Let them know that their experience and ideas do matter, and that you respect their thinking. Your employees are a rich, untapped source of ideas. Use them to boost your agency's productivity and profitability.
4. Give employees responsibility and authority. Studies clearly indicate that if customer problems are resolved positively on the spot, 95% of your complaining customers will stay with your agency. If a second person must become involved, the rate falls to about 70%. Customers don't want to hear that the person they're speaking with has to check with a supervisor before making a decision. Give all employees the power to do their job, and then get out of their way and let them do it. Trust them. It will pay off handsomely!
5. Let employees make mistakes. Give new employees good training, assign them a mentor, and then accept the fact that they'll make mistakes. If the mistakes are significant, discuss what can be done in the future to prevent them from recurring. With the rapid pace of change in the working world, we're all constantly learning. Most agencies have an environment in which employees fear making a mistake. The result: They work more slowly, overanalyze situations, are reluctant to take a stance, and don't offer innovative solutions. Mistakes are the stepping stones to great solutions!
6. Catch employees doing something right and praise them-every day. Praise them immediately, specifically, and genuinely. This is the single most important activity a manager can do to increase employees' morale and confidence. Each manager should praise two people per day. The best managers give five positive types of feedback for each negative one.
7. Look for ways to celebrate the small and big wins. This builds a fun, enjoyable work environment. Create small steps along the path to your goals and attach a celebration for achieving each step. This builds momentum, which will expedite the process. Be creative; be outrageous. Ask employees for their suggestions and have fun!
8. Create customized motivation plans for your top employees. No single factor motivates everyone. Ask your top employees what their top 10 motivators are and see how many you can incorporate into their performance rewards.
9. Have monthly 'report cards' to ensure that everyone stays on track. Break down an employee's yearly goals into monthly steps. Have informal discussions with the employee to understand what is and isn't working, and refine his or her goals accordingly. Help your employees win! A coach would never think of waiting until the end of a season to tell the players how they're doing. Be involved and engaged, and your employees' productivity and morale will soar.
10. Hire people who love people, love to learn, are energetic, and have a passion to excel. As your agency becomes a learning organization, keep up with the pace of change by hiring and retaining only those who possess the fundamental ingredients of success. They have to love working with people, since insurance is a people business. They have to love to learn, because today's pace of change is so rapid that only those who are eager to learn will succeed. They have to be energetic and have a drive to excel.
11. Value genuine conflict and differing ideas more than harmony. Tom Peters, business thinker, writer, speaker, and personal-success pundit, said it best: 'If you have two people who think alike, fire one of them. You have duplication.' You need people with different backgrounds, life experiences, and viewpoints to create the unfair competitive advantages that make your agency excel.
12. Step up your training. Completely train new employees, and require each existing employee to get a minimum of 35 to 40 hours of training every year. Agencies are notorious for offering little if any formal initial training before throwing new employees to the wolves. This practice does the opposite of wowing employees: Senior employees' morale and productivity declines, new employees feel resentful and unvalued, and everyone has less confidence in management.
How would you like to be a surgeon who must train a newcomer while you're performing surgery? No one could perform at his/her best under such circumstances. Such a practice is clearly unacceptable in the medical profession, but most agencies repeatedly refuse to provide their employees with the training they need to be their best!
13. Create a pleasant, comfortable, family-friendly work environment. Your employees work hard to be their best. Your job is to get obstacles out of their way. Their surroundings should be aesthetically pleasing and physically comfortable. If the physical environment hasn't been redecorated for 10 or more years, it probably looks old. Some environments are too noisy to allow employees to concentrate or to have confidential conversations with customers. Some aren't adequately heated or air-conditioned, or lack decent ventilation. Resolving such issues is the bare minimum to creating a productive work environment.
With today's limited leisure time, it's a good idea to adopt policies that take into account the realities of your employees' personal lives. Being an employee is only one of the roles they have to juggle. More employees are becoming concerned about day care and elder care, so it's important to find ways to help them meet these and other personal needs. You can win employees forever if you view them as complete human beings with personal lives, rather than as just employees.
14. Invest in the most up-to-date tools and best equipment. To give superior job performances, employees need the best tools and equipment available. If you wanted an athlete to be his or her best, you'd be sure to provide the best equipment, wouldn't you? Your employees are no different and deserve no less.
15. Offer employees a piece of the business. Be willing to share the rewards. Many start-up high-tech companies have mastered this step. They attract the best employees who are willing to work long hours because they have the potential to share in the fruits of their labor. You'll be delightfully surprised at how positively your generosity affects your employees' attitude and productivity.
16. Walk the talk. Breathe and live it too. As with the rest of life, be genuine and honest. Hypocrisy or double standards can easily undermine your best intentions. If you can't embrace any of these steps, don't pretend you can. You won't fool anyone, and will only impede your agency's growth.
So there you have it. The basics. Collectively they may seem daunting, but remember, all great achievements started with an individual, small step. And each initial step required a leader to be bold and have courage.