HOW DOES YOUR STAFF MEASURE UP?
by John Jaques
The single best measure of an agency’s management, professional personnel, quality of performance, and potential for profits remains employee productivity. For that reason, you should review your productivity and compare it to that of your peers every year. Where your numbers fall below the industry’s average (especially if they’re near those of the 25% of agencies performing the most poorly), start looking for some serious answers on how to improve staff and producer productivity during the next 24 months.
Leading Agency Industry Worst 25%
Target Average of Agencies
Commissions per employee (includes $129,000 $102,500 $80,500
owners and producers with agency three or more years)
Commission per Commercial Lines staff $325,000 $230,000 $150,000
(excludes producers, includes customer service, marketing, claims, loss control and risk management)
Accounts per Personal Lines staff (includes $1,000 $725 $525 CSRs, claims, rating, dedicated Personal Lines producers)
Commission per Life/Health staff $380,000 $238,000 $145,000
Commission per producer (three years or $385,000 $267,500 $165,000 more with agency, excludes Personal Lines commission)
High productivity begins with employees who have positive, energetic personalities, strong communication skills (written and oral), and intelligence. Three out of three of these is desirable, but you can tolerate two out of three. One or zero out of three means don’t hire that person. If you already have and their performance is poor, show them the door to a new career.
Finally, productivity doesn’t happen magically by hiring and keeping the right staff. Productivity results from the heavy use of automation and technology; effective, disciplined, and monitored systems; procedures and workflows; and continuing structured education and training.
Agencies falling behind the industry in productivity probably won’t evolve into the dynamic, diversified firms the new business environment requires them to be.
John Jaques can be reached at John H. Jaques, Inc., 21935 Coloma Drive, Suite A, Palo Cedro, CA 96073, (530) 547-4300, fax (530) 547-4309, or e-mail [email protected].