Putting Former Company Talent to Work
by: Dave Willis
Spring 2004
Over the past decade, tremendous numbers of U.S. jobs have shifted from large, multinational firms to smaller, more entrepreneurial businesses. Layoffs at AT&T and other large companies, for instance, spawned creation of numerous successful technology and related firms that have brought innovative products and services to market.
The insurance industry is not all that different, though the scale of downsizing has been somewhat smaller. As carriers merged and restructured, talented professionals have seen their jobs eliminated. In the process, these individuals have found their way to consulting firms, technology businesses and even agencies and brokerages. Given the current marketplace, this migration could continue, and even increase.
Benefits Possible, but Not Certain
Hiring a former company employee can provide advantages for an agency, but those advantages are not guaranteed. “Some company people work out well with certain agencies,” says Bill Schoeffler, partner at Oak and Associates, a Glen Ellen, CA-based management consulting firm serving the insurance industry. “You get somebody who knows the industry and how insurance companies work, which is a tremendous asset.” But the fit is not always perfect.
Sometimes cultural issues get in the way. “Incompatibility with the culture is 50 percent of turnover,” says Barbara Bauer, consultant with The Omnia Group, a management and personnel consulting firm based in Tampa, FL. “The cultures of a company and an independent agency, where everyone has the same last name, are significantly different.”
Schoeffler agrees. “In a large company, you tend to be much more single-task oriented,” he says. “When you’re in a small firm, you have to be a jack of all trades. Someone might be great doing the same thing over and over again, but put them in an environment where they have to handle four or five different things in an hour, and that might cause a problem.”
Set Expectations and Find a Match
Hiring former carrier employees and getting the most out of them requires good planning and conscientious management, according to people who’ve seen it work. Bauer says the first step is to set expectations, using a vocational description, then work on identifying the cultural issues. Compare the degree of structure, the number of bosses, hours worked, travel, and percentage of at-risk pay at the agency or brokerage versus where they are coming from. “Identify gaps during the interview process,” she says.
Schoeffler and Bauer both recommend using an assessment or profiling tool, such as those offered by Omnia, Caliper and others. This profiling builds on the objectives established when starting the search process. Bauer says, “The benchmark has vocational expectations, an environmental section where they answer questions about the culture – the workplace, profiles of the prospective boss and of peer members, and more.”
This assessment helps agency and brokerage managers determine whether an individual has a natural aptitude to do a certain type of work. That’s useful because appearances can sometimes be deceiving or, at the very least, confusing. For instance, there’s some logic to the notion of hiring a company marketing rep for sales at an agency. “In theory, that might be a good idea,” Bauer notes. “However, if you look at the role of a marketing rep, they need to call on X number of agents a week and be visible. What they don’t really have to do is sell.” Profiling can help identify which marketing reps could make the transition into sales, saving an agency lost opportunity–and revenue – from hiring the wrong person.
Bauer suggests certain things agencies should look for when considering bringing on former carrier professionals. “What I would listen for while interviewing someone coming from a large corporate background is, ‘The bureaucracy was killing me. I have all these great ideas, but it doesn’t matter,’” she says. “Those are the kinds of people that are antsy, ready to get out of their job jail. And they could come from any position within a corporate environment.”
Capitalizing on Unique Talents Brings Reward
When agencies do hire the right former company person, they can benefit in several ways. First, you enjoy a reduced learning curve. “If you find someone with insurance experience, you’re skipping over the step of having to train him or her,” Schoeffler says. “We like the idea of hiring somebody who has experience, and insurance company experience is a tremendous asset.”
This can be true at all levels in an agency. “The fact that a CSR knows the workings of the inner sanctum of a company helps out,” Schoeffler says. “They have a little bit better understanding of what’s important to an insurance company.” But the benefits can be even greater in other agency or brokerage roles.
Staffing at a more senior level can help agencies with carrier interaction and relationships. “If you bring in someone who was relatively high up in a company, make use of what that person knows about how carriers operate and how they think,” Schoeffler adds. “You may want to have them be the contact person with the companies – the underwriters and marketing reps. But you certainly should let them share what they know with the rest of the employees in the agency, so it becomes common knowledge.”
Agencies also should capitalize on any special product and management expertise a former carrier employee brings to the table, as well. “A company person might have experience developing programs,” he says. As agencies grow, they often find themselves seeking this specialized knowledge but can’t build it internally. “Larger agencies also could benefit from employing higher level people from insurer ranks who could help develop unique services or products they could offer their customers, perhaps risk management services or captive programs,” Schoeffler says.
Agency Management Development and Perpetuation
One option for agencies – one that has its roots in programs offered over time by certain carriers – is to grow their own former company employee. Schoeffler refers to carrier arrangements in which agency owners could send family members or key employees to work at the company for a period of time. “It’s a great idea to send a key employee or family member to get a year or two of experience,” he says. “Even if a program isn’t available as such, it might be prudent to have a family member work for an insurance company for a couple of years.”
Training is one obvious benefit. Seasoning is another. “If an agency principal brings a son or daughter into the agency fresh out of college, and all of a sudden they’re second or third in command, that can rub other employees wrong,” Schoeffler says. “But if they go out and gain experience, they bring back an added respect.”
They also bring back understanding. “What often occurs is the agents, although they may have a working knowledge of what companies do, don’t have a full appreciation of what insurance company people go through on a daily basis,” Schoeffler says. “So when you do have somebody who’s been there and done that, it creates an empathy, and that helps foster relationships.”
Bauer notes one added benefit for agency principals concerned with agency perpetuation. “Many seasoned company people recognize that opportunities for income and ownership in an agency are incredible—significantly greater than there might be in a company,” she says. These individuals bring deep knowledge, understanding and management expertise to the table, and often can thrive in entrepreneurial situations, creating opportunities for themselves and, in the process, for others like them, as well.
David Willis is a senior associate with Aartrijk, a Virginia-based communication firm.
