A RECENT U.S. Department of Labor report puts the national unemployment rate at 5.4% (Bureau of Labor Statistics, U.S. Economy at a Glance, Sept. 24, 2004). This is considerably higher than the unemployment rate between 1998 and 2000, and yet agency after agency tells me it cannot get anyone to answer ads for commercial-lines CSRs. Are agencies stuck in the "Employment Twilight Zone?"

Plenty of people are looking for work; by and large, however, they are not the employees agencies are seeking. The commercial-lines CSR position is no longer a clerical position, and anyone treating it as such could be sitting in an E&O minefield. The position requires a great deal of unique skill and knowledge. What other non-degree profession requires considerable insurance technical knowledge, a knack for details, great communication skills, an ability to deal with hard-driving salespeople and detailed knowledge of industry-specific software? Agencies cannot simply "poach" CSR candidates from other industries. For example, even if a CSR in the rental-car industry had all the right personality traits, someone still would have to train that person in insurance.

An additional hurdle agencies face is that for the last 10 years, the insurance industry's wage expense has lagged behind that of private industry as a whole. Perhaps more important, it lags far behind wage increases in finance and real estate. According to the U.S. Department of Labor, wages and salaries in finance, real estate, and insurance collectively increased 7.3% in 2003 (Bureau of Labor Statistics, Employment Cost Index, Sept. 24, 2004 ). But the increase for insurance alone was barely over half that. Maybe no one is answering agency help-wanted ads because agencies are not paying as much as their closest competitors.

This "wage gap" exists even as wages within the insurance industry have been increasing steadily. Competition for good CSRs pushes wages higher, even though starting wages may be inadequate to attract new talent. I believe many commercial-lines CSRs are working near "capacity," and their overall capacity may be decreasing because of the demise of comparative rating software, companies' continued high policy-error rates and the need for more E&O diligence. Not only are wages increasing, but agencies are going to have to pay those higher wages to more people. How many support staff do you want to employ at $45,000 to $75,000 a year?

Professional sports teams dealing with salary caps are in a similar situation. They have to build the best team they can without "blowing through" the cap. The best-coached teams can do this by developing younger, less expensive players, getting the same winning results with a lower payroll. Sure, it hurts when a top player's contract expires and he goes elsewhere to get millions from a team that hasn't "grown its own" talent. But the good coaches continually fill gaps by developing new players.

Just as with an athletic team, training is the key to success in hiring for agencies. Having a good training program in place-and at larger agencies, possibly a position dedicated to staff training-will differentiate winners from losers. Insurance agencies don't lose the people they grow the way athletic teams sometimes do; competing agencies don't have the knowledge of other agencies' employees the way athletic teams do of other team's athletes.

A good hiring and training program also provides more of a guarantee that an agencies' employees are good. An agency that "shops around" for employees never really knows what it's getting. We have all hired people after great interviews, only to find out later that the new person is a total bust.

Few agency owners and managers got into this business because they wanted to initiate a corporate training program. For most readers, the best approach is to outsource much of the training, keeping only the training coordinator and agency procedures training in-house.

A successful hiring and training program starts with a solid hiring process, which should include such tests as typing, word processing and personality. When hiring experienced people, also test for industry knowledge. Don Phin's Web site, www.donphin.com, is a great resource. If you are training "from scratch," consider these introductory resources for your new employees:

-"How Insurance Works," by the Insurance Institute of America/ CPCU, covers the "big picture" of insurance and is aimed at new employees. Call (800) 644-2100 for more information.

-For more in-depth training, the IIA/CPCU has a segment of the AAI program (Accredited Adviser in Insurance) that deals with agency operations (AAI 83). The books can be read as self-study or made part of a more formal training program. -The CISR program is also good for new employees, along with training on agency procedures and automation. Don't make the mistake of expecting your automation or IT "guru" to do the automation training. The ability to maintain an automation system and the ability to train users on that system are two very different skills.

Other key components of a hiring and training program are a good procedures manual and clear job descriptions. Learning a new job is always tough, but it becomes impossible when no one knows what the job is. Agencies also need one person dedicated to training or at least managing the training of new people. Throwing new people to the wolves through on-the-job training is the epitome of laziness and a recipe for failure.

Agencies that have already developed the ability to train staff from scratch are realizing greater success than those that have not. This much is already clear, but the real impact is still to come.

Special Reports /

For The Manager: Good hiring, traning practices yield top-notch CSRs

Related Stories

Recommended For You