Many in the industry have long held the view that hiring youngproduction talent is a bad idea. You often hear people say “youngpeople can't command the respect of the clients, so they probablycan't be successful,” or “they will just leave us in a few yearsafter we've invested in their training,” or “young people havenever worked out for us.”

In the summer and fall of 2009, Reagan Consulting–in conjunctionwith The Council of Insurance Agents and Brokers, UNUM, Chubb andHanover–conducted “The Young Producer Study” to test the validityof these assumptions. (You can access the entire Young ProducerStudy at www.reaganconsulting.com.)

The study was designed to determine if there was an opportunityto hire more young production talent and document the bestpractices in hiring young producers.

Young producers were defined as producers hired when they wereunder the age of 30, hired in the last 10 years, and sellingcommercial property and casualty insurance or employeebenefits.

The first part of the study was an assessment of the industry asa whole to determine the baseline level of hiring for these youngproducers. The survey included 206 agents and brokers (firms)throughout the country, with the data used as a proxy for theindustry as a whole.

Based on the survey results, the success of young producers(48.6 percent) was approaching the success rate of all producers inthe industry (53.0 percent), with the success of 23.4 percent ofthe young producers still unclear.

This data confirmed our belief that some firms were havingsuccess attracting, hiring and retaining young producers, and thatthere is an opportunity to learn from the best practices they wereemploying.

The next step was a deeper investigation of the firms andproducers identified in the baseline study that were experiencingsuccess. Fifty-four firms agreed to complete a detailed survey ontheir hiring and development practices for young producers. Thefirms also agreed to identify one or two young producers theyconsidered successful.

A total of 91 successful young producers were indentified,completing a detailed survey about their educational background, apersonality and behavioral assessment, and an interview. The firmsalso provided data on each successful young producer's productionhistory.

During this process we met and interviewed an extremely talentedgroup of successful young producers and developed a deepunderstanding of the best practices employed by the successfulfirms in regards to attracting, hiring, developing and retainingyoung producers. There were three primary takeaways from our lookat successful young producers:

o College Recruiting Works.

The 91 successful young producers that participated in the studywere recruited from various sources, including other industries,other firms, college, insurance companies and in-firmtransfers.

College, however, was easily the most popular source forsuccessful young production talent. This certainly makes sensegiven that colleges and universities are concentrated sources oftalented individuals, but it also contradicts conventional industrywisdom regarding college hiring.

Further, the success of producers hired directly from collegewas similar to that of those hired via other sources with regard toproduction numbers and time to validate.

o Well-Rounded Individuals Often PerformBest.

There wasn't one characteristic of the successful youngproducers that stands out. Rather, what was apparent afteranalyzing the backgrounds of these individuals was their capacityto be involved in many activities and leadership roles whilemaintaining strong academic credentials.

However, interestingly, in terms of months until validation(when the commissions a producer generates at least equals theirpersonal compensation, so they are in effect paying forthemselves), a grade point average over 3.5 did not indicategreater success than that of those with a lower GPA, and within thegroup the producers with the highest GPA validated slowest.

Also, neither prior sales experience nor a specialty focusindicated success at a greater rate than that of those withoutprior sales experience or those that were generalists.

o Young Producer Economics Are Attractive.

When compared to hiring other experienced producers, theeconomics associated with hiring young producers can be attractive.As might be expected, the initial investment (salary) in a youngproducer is typically much lower than that of an experiencedproducer.

However, we also determined that successful young producers canperform at a level comparable to successful producers of all ageswhen give the appropriate resources.

Given the difficult economic environment we find ourselves in,both the relatively low initial investment of a young producer andthe ability to generate organic growth for the firm could prove tobe attractive.

With all that said, hiring, training and retaining youngproducers is a different game. Those firms that will succeed mustdo four things well.

o First, if they want to recruit college kids, they mustestablish a presence on college campuses as a means to identify thebest talent.

o Second, the firms should invest in mentoring of the youngproducers to the point that mentoring becomes part of their firm'sculture.

o Third, young producers should be hired in classes, fostering acollegial bond among the young producers.

o Fourth, the young producers should be provided with resourcesthat will make them successful.

In summary, young producers will not be able to rely only onexperience to win business, and firms that can provide support toyoung producers via experienced producers or in-house riskmanagement or other resources will have greater success.

None of this is to say that hiring experienced or “olderproducers” is a bad idea. However, “The Young Producer Study”confirmed our suspicion that a large, untapped resource exists forfirms in their search for production talent.

There are compelling advantages young producers can bring tofirms from a cultural perspective in the form of energy andenthusiasm, as well as practical advantages from the perspective ofshareholder return and client relationship perpetuation.

While it won't work for everyone, the opportunity to hire anddevelop young producers is compelling and worth exploring.

Brian McNeely ([email protected])is a consultant and Angi Bemiss ([email protected])is senior vice president at Reagan Consulting Inc., anAtlanta-based management consulting firm that developed andproduces the “Independent Insurance Agents and Brokers of AmericaBest Practices Study.” More information about the firm can be foundat www.reaganconsulting.com.