Experience or OJT?

It should come as no surprise to anyone that finding, training and retaining quality employees is a huge issue and a top priority in many independent insurance agencies. The effect of the Baby Boomer generation retiring from active participation in agencies is creating a real problem for agency owners and managers to solve.

Most of these folks have years of experience and hold key positions in agencies. Even if they can be replaced with the advancement of other agency staff, ultimately the agency is faced with filling an open position.

In addition to retirements, many agencies are suffering from the fact that currently experienced agency staff is a limited commodity and headhunters, as well as these individuals, are realizing the income potential of looking at switching employers.

The loss of these individuals is putting a serious strain on agencies already being overwhelmed with increasing workloads and clients looking for instant, exceptional service. Some agencies have been able to temporarily fill the void by hiring a WAHVE (Work At Home Vintage Employee). WAHVES are retired insurance agency and company employees, many with years of experience and expertise who are interested in working part-time from their homes. This may be a solution in the shortterm but agencies need to find new staff to correct the problem long-term.

Add to this the unattractiveness of the insurance industry to young people entering the workforce, as well as the time and cost associated with training new staff, and what should be a manageable problem becomes a major headache.

Agencies faced with these issues usually have to choose between hiring someone who already has the knowledge and experience to quickly move in and take over the duties, or hiring an inexperienced person and providing them with the necessary training to allow them to function well in their position.

Both alternatives have positive and negatives associated with them. They also require significant agency support especially if inexperienced people are being hired.

Let’s discuss briefly the potential problems of hiring an experienced person. Are they job hopping, looking to increase their salary while the market is ripe? If so, will they leave you in a short time if another even better situation presents itself? What bad habits and training do they bring with them? Are they willing and can they be retrained out of those bad habits and misinformation? Will they clash with other staff because of the perceived change in the pecking order? Will employees believe they were offered a salary not in line with existing staff because the agency needed someone fast and wanted someone with experience? Will some staff feel they were passed over for promotion to the position the new employee filled and start hunting for a job elsewhere just further increasing the agency’s problems? I’m sure you can think of some other problems but the point is do these potential problems outweigh the benefit of getting someone experienced that can fill the position with a minimum of orientation and training.

On the other hand the issues with hiring an inexperienced person appear to be far outweighed by what I believe are the many positives. Yes, a new person requires time to gain knowledge and experience, however they are starting fresh with no bad habits and learning things correctly. Their knowledge level may be lean but their ability to use the computer, computer programs and social media are usually light years ahead of your older, more experienced staff. They relate and understand younger consumers and can help you understand what it will take to attract them as clients. Another positive is that while they are going through orientation and training for their new position, these inexperienced employees question why things are done the way they are and many times offer interesting ideas on how things might be done differently to save money and time. Their thought provoking input has a positive effect on their agency trainers and mentors, encouraging them to look at issues and problems from a different perspective. Last, but hardly least, there is an enormous pool of vibrant, educated, personable young people available to hire. They may not see the benefit of working in the insurance industry, however they are definitely looking for the opportunity for a long-term, professional career that will use their skills and personality.

Which would you choose? Would it be an experienced person or a new, young inexperienced person? I’d definitely be interested in your feedback.

It’s quite obvious I would vote for the new, young inexperienced person. Yes, they require significant training and mentoring and at IIABNY we recognized this several years ago. As a result we have web-based training for both new and existing employees which will allow agencies to hire inexperienced people as well as promote from within. As I mentioned before, WAHVE can provide knowledgeable and experienced people to assist agencies in the short-term and through our relationship with WAHVE IIABNY members receive significant savings. By recognizing these needs we were able to have in place solutions to help our members.

We will continue our emphasis on attracting new, bright, young people into our industry through InVEST and other initiatives. We are committed to encouraging diversity at insurance carriers, independent agencies and with the customers our members serve. We will continue to communicate to consumers the benefits of working with an independent agent or broker through our Trusted Choice® brand as well as why insurance is a significant and complex purchase never to be treated like a commodity.