Producer/Manager Development

Retaining top performers

Strong leaders strive to build rapport with employees
through daily communication, purposeful coaching

By Nancy M. Langton and William W. Harwood

Staying in touch with your employees will reveal to you many of the challenges they are facing and dreams they have.

Retaining key performers has always been important, but it is absolutely essential given today’s very competitive insurance talent market. Wait—this doesn’t compute, you say. How could the “talent market” actually be competitive? Many agencies are under pressure; carriers are contracting. What is competitive is the market for high quality talent. Exceptional contributors are always in short supply; and in an industry hammered by change during the past five years, the failure to consistently attract new talent to the industry now makes that supply smaller than ever.

The best-run independent agencies are growing and adding staff, but they face challenges to find and retain the best talent. We are continually involved in projects to replace or add staff—both in sales and account management.

Beyond the challenges of the insurance talent market in general, independent businesses face several unique obstacles, both in retention and new talent sourcing. For example, work commuting dynamics have become more complex, due to traffic volume as well as other factors. One top firm with an ideal vacant job is hard-pressed to find good talent because their location is now a painful commute. Five or ten years ago the daily travel wasn’t a problem, but recently the traffic flow changed to their disadvantage.

In another case, a firm can’t find junior staff to build as account managers because of new competition from outside the insurance business and the uphill battle of attracting younger people to this industry. These cases are solvable one by one, and well-run agencies respond to these challenges every quarter. However, the talent market is clearly “tighter,” making retention a huge priority.

Diagnosing a retention risk

You sense that a strong performer is unhappy. However, your schedule is hectic and you march on thinking that it’s one particular day or situation. You believe this individual has a great situation at your firm: your respect, a productive work environment, steady clients, growing business, competitive compensation, continuing education, etc. What would be the motivation to leave?

Why do employees leave?

Most people are uncomfortable revealing the true reasons for their dissatisfaction (or simply, concern) when they leave. Both mid-sized companies and large companies have conducted infinite numbers of studies to evaluate employees’ reasons for leaving. Of course, a small percentage of resignations (beyond those that are company initiated) are the result of poor working conditions or a bad boss, but most reasons are subjective.

The three reasons that always seem to surface are:
1. Better career opportunity
2. Better pay/benefits
3. Personal reasons (family, health, etc.)

The “better opportunity” cause is significant because people’s career mindsets are much more aggressive now. “Aggressive” in that few people expect their employer will (or can) act in their self-interest, so a significant proportion of people keep an eye on the job market at all times. This represents a measurable shift in employment attitudes, and it translates into the need for you to have retention tactics for your top contributors built into the way you run the business.

Another indicator of this “free agent” mentality is that well more than half of the good performers who would leave your firm would return if the opportunity were right.

The turnover fallout

Handling a termination in a professional manner is always critical and carries a long-term impact. If you react emotionally or judgmentally (shock, disbelief or anger) to a resignation, you will miss the opportunity to diagnose the problem. What are the employees telling you about opportunities at your firm, or about themselves? Your reaction sets the tone for the rest of your team.

The greatest flaw in post-resignation discussions is that managers do not obtain a perspective on why employees leave the firm. In many cases, you will witness your employee sharing the importance of further skill growth, responsibility and career development. Your top talent does not want to grow stagnant. It’s your challenge to manage an ongoing process of development plan/maps and discussions. Their growth will further enrich your firm.

The fallout of turnover causes workload shifting, loss in productivity, employee morale issues, and increases the cost of hiring talent. And, if not managed assertively, these factors will only create additional turnover.

How do I retain my staff?

Many strong performers have not moved during the post-2000 recessionary job market. Statistics revealed by the Society of Human Resources Management reveal that turnover will increase in 2005 and will impact small companies.

The shortage of growing talent within the agency distribution world is a reality. When an employee leaves a firm for a competitor, the reason is simple—the employer failed to retain that employee. Sure, you can blame your competitor for stealing your staff. But, why are they leaving? You failed to create an aggressive retention strategy.

An aggressive retention strategy does not require double-digit pay increases to every employee to keep them at your brokerage. Please don’t resort to this technique. It causes inflated compensation dollars for everyone in the industry. It’s more important to make sure your salaries are “marked-to-market.” An aggressive retention strategy starts with a tactic you can implement today—strong leaders who talk to their employees.

Balancing daily communication and involvement along with purposeful coaching meetings will enable you to build a stronger relationship with your employees. They will feel empowered to openly discuss and map out their career plan along with you. Staying in touch with your employees will reveal to you many of the challenges they are facing and dreams they have. Their job in your firm is a big part of their life. They made the decision to be part of your team.

Observe and listen to what your employees are experiencing. The next time an employee approaches you because he or she is struggling with balancing work and a difficult personal problem, ask yourself, “Can I reasonably accommodate this situation?” Of course, each situation and individual is unique. Ask yourself, “What is the total productivity impact on the firm if I lose this performer? Co-devising a strategy with a top employee having a short-term difficulty (child care, elderly parent, divorce, etc.) could help you avoid the costly rehiring process. Also, your reaction to a situation like this will leave a permanent impression on this individual. Today, we value our work partners and expect their positive support when life gets tricky.

To summarize, here are some retention tools you can implement:
1. Communicate regularly with staff.
2. Demonstrate strong leadership qualities.
3. Implement development plans.
4. Offer continuing education/tuition reimbursement.
5. Try to accommodate employees’ balancing of work with their personal lives.
6. Consider incentive pay/flexibility to earn more (pay for performance and incentive bonus programs).

These six items are not arranged in their order of importance, and we will explore specific topics in future articles.

Make it your 2005 priority to initiate retention tactics for all your top performers—not just the best sales staff and managers! *