Finding Agency Personnel

'Good help is hard to find.' That old adage has never seemed more true, given the increasing difficulty employers are experiencing when looking to fill an empty space in the office. In a recent survey of business executives, more that 50% of the respondents anticipated problems in filling skilled technical positions, and 42% expected problems in finding professional staff. Statistics like these indicate that finding quality new-hires is one of management's most pressing issues.

The insurance industry is not immune to this problem. When agents and brokers search for new employees-producers and CSRs, in particular- they face the same challenges as any other business.

Payroll is one of an insurance agency's or brokerage's largest expense items. When the time spent each year finding, selecting, and managing people is added, personnel management becomes the second most important agency function, after sales.

Sales and personnel issues often combine. Your marketing efforts will by greatly enhanced if the sales function is performed by the right people, who are properly trained and managed.

Finding and keeping agency personnel can be defined as:

Finding good people can be a problem, in spite of the availability of workers and the perks of working for a local insurance agency, such as working in one's home town, in a professional environment, with competitive pay and benefits, and close, family-like atmosphere deriving from the typical agency's size.

Despite these excellent advantages and selling points, even generating a list of candidates is difficult and frustrating. A 'scarcity' of labor results from a demand that is greater than the supply. Labor scarcity can be resolved in these ways:

• by redefining what agencies are looking for, taking care that the expanded definition still makes business sense, so that the number of people who are valid candidates for a given position is increased; i.e., increasing the size of the pool of candidates; and
• by increasing the salary amount of an employee, being vigilant that the higher price produces a better performer. The 'supply and demand' solution dictates that when the supply is low and the demand is high, the price goes up.

There are two things that can be done to improve the chances of making a successful hiring decision before the hiring process:

Don't overlook problems such as heat, noise, cold, odor, lack of fresh air, overcrowding, confusion, or grossly inefficient work flow. Careful observation and listening can give important clues to such problems. The good news is that they are usually easy to rectify. Confusing or grossly inefficient work-flow problems probably involve calling in an operations expert, and there are many consultants working in the industry who are highly qualified.

Selection occurs after the recruiter, a classified ad, or referrals from other sources have generated a pool of candidates from which to choose.

While there are hundreds of different and perfectly acceptable personalities around, in simplest terms, they belong to one of two types: Type-A, the aggressive doer, the competitor, the ambitious driver who makes things happen; and Type-B, the dedicated, non-confrontational, risk-avoidant personality, suited to providing administrative support.

Traditionally the Type-A doer is the salesperson or sales manager (and usually, but not always, the principal), and the Type-B is the CSR. For the sake of simplicity, personalities will be discussed in terms of the traditional definitions.

The agency or brokerage principal expects different kinds of behavior from Type-A people in order to successfully perform different kinds of work. This type must generate leads, meet people, establish personal and professional credibility, and sell. This type must be able to respond to competitive pressure, including working for commission, tolerating rejection, and being able to self-manage in the field.

The service-oriented work demands of traditional CSRs require them to be Type-B people-detail-oriented, analytical, patient, persistent, and methodical, able to perform according to specific instructions and to be more interested in pleasing the boss and helping the team than in personal gain or glory. Sales and CSR staff are different personalities, and those differences mean that they should not be recruited in the same way.

There are three sources of candidates: classified advertising, professional recruiters, and networking through other sources (professional groups such as the local branch of Professional Insurance Agents or Independent Insurance Agents of America; service organizations such as the Kiwanis; or college campuses).

Selection begins with classified advertising. Understanding personalities makes understanding the differences in classified advertising easy. The classified ad for the producer (see Ad 1) is written to cull fast-talking 'pretty-boy' (of 'pretty-girl') candidates, to challenge people, to throw down the gauntlet. The result may be fewer applicants, but they will likely be better applicants: Type-A personalities.

Similarly, the classified ad for the administrative/support personality (see Ad 2) 'sells.' This ad is designed to show candidates for administrative and support positions that your agency offers stability, security, and professionalism that appeal to their Type-B personality.

Do not go to the expense of a large display ad. The ads shown here are not display ads, they are one-column-width ads to which regular classified rates apply. In most cities, the most popular media for employment advertising is the Sunday classified ad section. A once-only, one-column-width insert may cost between $400 and $1,000 in the larger metropolitan newspapers. While the price in high, compare the cost of hiring and making a mistake to the cost of alternative sources of finding candidates (such as using a recruiter). If the ad is not netting results (assuming the ad is written persuasively), there are probably no candidates available in the area who meet your needs. Give it a rest for a few weeks-and try again.

seeks an experienced tax or state planner/insurance sales producer. The right person will have high energy, a desire for greater authority and responsibility, and a great need to win individually and as part of a team.

If you have been successful in insurance sales and feel management is your next career step, we may have the opportunity you seek. Good salary plus incentive based on the performance of your sales staff. Phone or send resume to: [agency/brokerage name, address, phone, and contact] COMPETITIVE ONLY NEED APPLY!

Commercial and Personal Lines Customer Service Representative wanted, with a stable work history. Have you recently transferred into the area? Has your present office closed, or are you re-entering the workplace? We have a career opportunity available in our insurance agency for a detail-minded individual who enjoys problem-solving. We offer continuing training, an above-average salary and benefits package, and a friendly, professional workplace. Phone or stop by: [agency name, address, phone, and contact]

College recruiting is an important source of talent that is often overlooked. A number of agents complain that young adults do not want to work, that they are not loyal, and that they could hurt the company's good name. Is this true?

While college recruits are less experienced than other choices, hiring recent college graduates, if properly screened for maturity, commitment, realism of goals, and so on, has some real advantages. Grads are usually less expensive than other hires. They are often better educated, eager, and have not had a chance to learn too many bad habits.

The agency or brokerage principal should avoid hiring anyone who cannot be fired easily-in a word, relatives. Before bringing a son or daughter into the business, he or she should be checked more thoroughly and objectively than anyone else. After all, the relative will be expected to perform tricks, to be a superstar, by the other staff members. And the last thing the agency or brokerage principal needs is a son or daughter destroying his or her life's work. For this reason, many agencies and brokerages have a policy against hiring relatives or friends.

Along with relatives, beware of friends who, in a pinch, may be tempting, but who may be difficult to fire. Friends of present employees may be difficult to fire because you may lose the present employee in the process. Hiring the friend of a key employee can become a problem should either of them not work out.

The psychology of selection is the same as that for writing classified advertisements. In simplest terms, there are two personalities, and the agency or brokerage principal has to learn different techniques for everything-advertising, interviewing, motivating, and managing.

Producer selection involves weeding out the non-competitive candidate. The selection of an administrative-support personality requires screening the Type-A personality who is changing jobs to increase pay. The Type-A personality probably does not have the qualities needed to perform the CSR job: a willingness to go by the book, a natural and healthy skepticism, and an eye for detail.

Selection involves taking specific steps to assure that there is a maximum probability of a successful 'fit' and 'survivability' with the office. Selection takes time, but if done properly, it is time well-spent.

Do much pre-screening as possible. The agency or brokerage principal's time is valuable, and he or she should only meet candidates who have completed pre-selection. There are four pre-selection steps:

• Devise a basic math test to determine addition, subtraction, multiplication, and division skills.
• Write a two-page letter that deliberately includes 40 mistakes. Include some common spelling, punctuation, and grammar mistakes, and neatness problems. Award 2.5 points for every mistake the candidate identifies.
• Ask the candidate to write something about anything for 15 minutes. Is the topic well-selected, mature? Is the piece well-written, using correct spelling, grammar, punctuation, and so on?

Other skills tests are available through the local department of education (tell them the grade level desired-eighth grade math, for example), or through professional associations.

Open your eyes and ears to observe what a candidate is really conveying- which brings us to the interview.

Once a candidate has been pre-screened, senior-management time can be invested in seeing the applicant. The interview is the candidate's best (and usually, only) chance to impress you that he or she has the qualities for which you are looking. Similarly, the interview is the best chance to screen thoroughly and save a lot of time and money. Think of the interview as 'show time.' This is where proper selection happens-or doesn't. The following points should be remembered when conducting an interview:

Divide the interview process between three people, giving each person a 20-minute interviewing assignment. This not only saves valuable time, it also provides three heads and three points of view on a subject. The interview is also an excellent training ground for up-and-coming managers. If the agency is small and only one person can do the interviewing, he or she should go through the three steps suggested here.

The first interviewer explores the candidate's past and looks for verifying evidence of competitiveness and a need to lead and win. Ask about early hobbies, memberships, sports. Do not assume that a star athlete is a great competitor. He or she may have been blessed with a natural athletic talent, and motivated by a need to please mom or the coach. Running the 1200-yard dash in less than nine seconds does not sell insurance.

In the case of the CSR candidate, look for evidence that membership belonging, and team-playing have always been important. Look for signs of selflessness, giving, and helping others.

The second interviewer explores the candidate's present life, and the questions and answers are similar to those asked by the interviewer exploring the past. Probe the reasons for the candidate's present availability. The genuine competitor might be seeking more opportunity or challenge, but beware if he or she is simply seeking more freedom. The true administrator personality should be looking for more stability, the chance to be a counted-on member of a team, or a more professional work environment.

The third interviewer probes the candidate's expectations with the agency or brokerage. The producer should have challenging yet realistic goals. The CSR's future goals should be more modest and conservative than the producer's.

Use the interview as a opportunity to sell the CSR candidate on joining the agency. If you do, remember these CSR 'hot buttons': belonging, security, fixed pay, professionalism and training. Don't hit the 'cold buttons': opportunity for sales/incentive income, leadership, or management.

Stop if you hear yourself selling a producer candidate on the job. You should be concerned about hiring a fast-talking, socially assertive personality instead of a really competitive go-getter. The agency principal or sales manager is probably a Type-A personality, and the last thing you need is two Type-A people selling each other on a job.

Interview wisely. Make the interview a meaningful session during which the candidate learns about the agency and the demands of the job. Don't paint the job as rosy and fun if the main expectation is hard work.

Reference checking could be a pre-selection step, but because it takes time, begin checks further along in the selection process.

Some managers complain that no one will give them a reference about former employees today. This is true in some cases, in light of today's litigation-oriented society and the possibility of a personal injury lawsuit arising if a less-than-shining reference is given. Still, consider the absence of a positive reference to be a potential negative. Here are some steps to generate references:

Look for a statistically high probability that a candidate scores or profiles in a personality test like people who have performed in a certain kind of position successfully. The profiling service selected should not be lengthy or clinical-that kind of testing is inappropriate, and the longer and more complex the test, the longer and more costly the interpretation process will be.

There are many valid testing and profiling service from which to choose. In making a selection, look at how long the firms have been in business, how large they are, and which companies and organizations endorse them. Try many of them to validate and to see that they are accurate, that they work, that they are helpful, and that they are good value for the money. If they are not (or if they were but no longer are), try another service.

Profiling candidates for employment serves two very important purposes: 1) to confirm what you learned in the interview, reference-check, and resume review, and 2) to signal any problems that might not have been detected in the interview.

An accurate profile will alert interviewers to insufficient stamina-for example, the inability to perform productively during a 35- or 50-hour work week. A profile will signal extremes of behavior (which are often kept under wraps during the interview) -- extreme competitiveness or hypersensitivity to criticism, for example.

The time to profile someone is when the candidate is completing the job application. Most profiling services do not charge for the paper their tests are printed on. Rather, they charge for their time and expertise in interpreting the test results. After the selection process is complete, don't tell the candidate, 'Everything looks fine so far. Now if you can pass this personality test, you've got a job.' Candidates are bound to respond to the test as they believe you want them to respond. When the test is done at application time, the profile is sent (and a charge incurred) only after you are feeling confident that you have a probable hire. Test results are more reliable, as the test was taken under less stressful conditions.

If you are interested in hiring a CSR candidate, make the offer as soon as you can. Administrative personalities are few in number and tend to accept the first offer they get in order to minimize risk and exposure. Offers should be made in writing so that start date, title, general job expectations, and initial compensation arrangements are clear.

Unsuccessful candidates should receive a letter informing them that the reason they were not hired was because someone else was hired-not because they weren't good enough. This builds goodwill, so that when you are again hiring, the company name will be well-regarded.

It's important for any new employee to mix with established employees. But when it comes to CSRs and producers, integration need do differ. Integration is especially important for the CSR personality, because belonging is a strong need. If you hire, integrate. Decide who should make the introduction and take some time with them. Spend $25 for the key fellow workers to eat lunch together.

The new producer will want to start making money as soon as possible. For the young, inexperienced producer, watching a successful performer in the field is critical. Having a chance to earn as soon as possible must be engineered in the early day by giving the new producer a few pre-sold prospects to call upon. The commission the agency gives up is a wise investment.

If you realize that a mistake has been made, act immediately to correct the problem or terminate the relationship. A new employee who cannot show real signs of being a 'keeper' in 60 to 90 days is probably not going to make it.

Managers now should have a better understanding of how to navigate the many pitfalls inherent in the employee selection and hiring process.