For more information, read these AA&B Web exclusive articles: Recruitment: The Big-Picture View and Recruitment: The Youthful Perspective. Back in 1970, sociologist Charles A. Reich posited in his book “The Greening of America” that widespread acceptance of countercultural credos and recreational drugs would transform America into a land where personal freedom and egalitarianism would prevail.
It didn’t quite turn out that way. Instead, we’re looking at The Graying of America, in which the baby boomers of the 1950s and 1960s are retiring in a giant demographic wave.
According to the Insurity/Microsoft Millennials in Insurance Survey 2008, nearly 60 percent of our employees are older than age 45. Between now and 2014, the U.S. property-casualty industry must fill almost 100,000 underwriting and claims positions.
The issue is probably most acutely felt in small to midsized independent agencies. A recent AA&B survey of our readers shows that 52 percent have fewer than 5 percent of employees under age 30 (click here for complete survey results).
“Most agency owners are nearing retirement age, yet there is a lack of young professionals in the industry to take their place,” said Diane Fowler, executive director of the PIA of Connecticut, New Hampshire, New Jersey and New York. “Our members are concerned about the future of the businesses they have worked so hard to develop, and the future of the independent agency system as a whole.”
Insurance’s “boring” reputation doesn’t help. “Insurance has never been highly regarded by young people,” said Bill Pierson, executive director of InVEST, IIABA’s program to attract talent. “It has the stereotype of being a sales job for something that nobody wants to buy and nobody understands.”
Education and community outreach are keys in finding new talent, followed by providing career growth opportunities, fair benefits and salaries, and ongoing training.
“Nothing is recession-proof, but insurance will always be a necessity,” said Fowler of PIA. “With banking and financial services reducing their work forces, there are people without jobs who have professional skills that would lend themselves to our industry. We’ve talked with our members about seeing these times as an opportunity to recruit these people.”
AA&B spoke with the principals of four agencies to see what they’re doing to recruit, hire and retain top talent. Here are their stories.
John Murray, CEO
Rose & Kiernan, Albany, N.Y.
With 12 offices in New York and Connecticut, $45 million in annual revenue and 190 employees, Rose & Kiernan was big enough to do something dramatic about its recruiting problem: It went directly to community colleges.
“When I came into the firm in 1994, our plan was to double our revenue every 5 years,” said CEO John Murray, an InVEST board member. “We could handle some of that growth through efficiencies like automation, but we knew we would have to hire more people.”
Like most agencies, Rose & Kiernan had relied on “stealing” talent from competitors and insurers in the region. Today, most companies are gone, leaving agencies starved for local recruits.
The agency approached Hudson Valley Community College with a two-year insurance and risk management curriculum to fit into the college’s existing business program.
Working with other area agents, the agency decided basic coursework should include introduction to commercial property-casualty, personal lines and agency management components.
A year later, the program was approved by the New York Board of Regents, and is now in its second year. Enrollment is about 30, including three Rose & Kiernan employees.
The agency also hires eight to 10 college interns each summer. Five of these are now full-time employees.
And although Rose & Kiernan is committed to recruiting younger people, the firm targets all age groups. For example, the agency just hired a man in his late 50s as a senior customer service rep with a construction focus to service existing accounts.
The firm also hopes to grow producers by training customer service representatives (CSRs) on property-casualty and benefits. Rose & Kiernan enjoys 5 percent attrition, primarily due to promotions, and hires about 15 new people per year.
Rose & Kiernan also has an ESOP plan, with more than half of its employees as members. After employees have been with the agency for 2 years, they receive 15 to 20 percent of their salaries in company stock.
Training is also essential. The agency uses Applied Systems’ Significant Systems to train all employees in Outlook, Exel and Word. About 20 percent of employees have or are working on CPCU, CIC or ARM designations.
Nestor Rivero, principal
Tropical Insurance, Miami
Rivero has been teaching insurance through his area high school’s business educational cooperative for more than 10 years, and his 14-employee agency benefits from the relationship. The agency employs three young people, one of whom is a high school senior, working part time and receiving school credit and salary.
“The first time I started teaching insurance, I was just given a book and told to go teach,” Rivero said. “I almost quit that first day. But then a girl came up to me after class and told me she used to think insurance people were a bunch of crooks, but now she understood how insurance works. That’s what made me come back.”
Since then, Tropical has nurtured many young people, including several whom Rivera recruited from the high school program. “Our top salesperson started as a file clerk; now he’s a producer with $2.3 million a year in sales,” he said. “His sister started as a file clerk, too, and now she’s a CSR. Some of the people have been with us for 25 years, so it’s like a family.”
Rivero offers education, a career path, training and work flexibility to make up for what may be lacking in salary. As president of the local Latin American Assn. of Insurance Agents, he uses basic insurance educational coursework provided by Insurance Training 101, Inc., which teaches employees the basics of the business, avoiding having another employee train a new worker.
Rivero’s advice to agencies looking for young employees? “Go to the high schools and talk to the students, see what they’re good at, then hire and train them. They’ll be loyal to you because they’re glad they’re not flipping hamburgers. They can feel good about what they’re doing.” And for retention, “Treat them nice and give them good benefits, because money can’t be an issue at a small agency.”
Pat Moore, partner,
Antalek & Moore Insurance Agency LLC, Beacon, N.Y.
“For some reason, today’s children don’t want to take over the family business,” said Moore, who has three kids of his own who aren’t interested in insurance. “We’re seeing more outside recruitment than hiring through the families.”
Antalek & Moore, a 13-employee agency in New York’s Hudson Valley, relies on current employees to suggest recruits. Insurers help, too. Travelers hosts a local high school-level program at its Hartford offices featuring an annual “job shadow” day linking Travelers employees and students, even encouraging the students to print business cards and “dress for success.”
The agency is especially aware of the importance of CSRs, who Moore believes “are on the same level as paralegals at a law firm…they help with retention, with a job description that is less processing and more account rounding.”
Antalek & Moore tries to “grow their own,” finding the right people for the job and training them in sales using an outside consultant. The agency pays CSRs commission on new business, graded on one policy versus a whole account.
The agency also contracts with Selective Insurance’s HR Solutions program, a fee-for-service arrangement that assists with HR management and helps creative reviews, policy and benefits packages.
Brett Nilsson, senior vice president
The Buckner Co., Salt Lake City
“Independent agents sit on city councils and school boards, get involved with their chambers of commerce, and help run their cities,” said Nilsson, the chairman of IIABA. “If we can do a better job of telling our story, explain the flexibility of agents’ work schedules and the earnings potential, the industry will be more attractive to new people.”
He recognizes that recruitment isn’t just an agents’ problem. “In the past two weeks, we lost two company underwriters to retirement, so companies are struggling with the same thing,” he said.
Buckner Co. attends career fairs at local high schools and colleges and gets referrals from current employees, rewarding them for successful hires. “We are also willing to bring them into our office to job shadow and become familiar with what independent agents do,” Nilsson said.
The company uses Caliper and other testing methods to prequalify recruits. “Certain characteristics are important for success in insurance, and we’re trying to determine if they fit niches that are out there,” Nilsson said.
Carriers help with the training. While the Hartford School’s 3-week program has long been the industry gold standard, there are other programs out there, too. “My son started with our agency about a month ago, and he’s now in Hartford taking a three-week course with Travelers,” Nilsson said. “He also has a mentor within the agency, a young producer who helps him out. Once he learns the basics, we’ll encourage him to work toward a designation like the CPCU or CIC.”
Young people entering the business want a sense of security, so some form of ownership is a big incentive. Like attorneys at a law firm, producers should have the opportunity to become partners if they understand what they have to do to get there, Nilsson said.
Although Buckner does not have a structure for partnership, the principals continue to discuss the issue. “We may be as guilty as anyone else of not planning for perpetuation, but fortunately, we’ve got more young people than a lot of other agencies,” Nilsson said.
Attracting and training young people must be an industrywide effort, he said. “Some of our people may go to an insurer or vice versa, but we can’t be selfish about that. It’s simply important to start getting good people in the industry. I feel we’re on the cusp on that right now.”