ACG - Agency Consulting Group

The PIPELINE

A national monthly newsletter for agency principals dedicated to agency management topic

THE HIRING PROCESS - WHY MISTAKES ARE MADE

We lose a producer or key service employee or are convinced that we need a new person to move our business forward. We put the word out to our employees, to our carriers and to headhunters that we are looking and impatiently await results. We’ve heard that business is still soft and many people are out of work, but our phones and e-mail certainly don’t ring off the hook with candidates. We even try advertisements and on-line postings. Finally, we get a trickle of candidates. Most are neither qualified nor have the personalities to meet the needs of the job.

We get frustrated and somewhat desperate when the work starts affecting our other employees and when the lack of production begins to affect our revenue or profit lines.

We will address how to find producers and other employees in another venue. The key to locating quality employees for any positions is to identify the right personalities and is not a factor of experience.

This article addresses a more insidious problem, poor selection habits. Many of us will lower our standards when stress and pressure builds because of the need of a person in a role in the agency. I’ve heard many an agent tell me that they hired the first person that appeared to be an acceptable candidate – the ‘Warm Body Syndrome’. The thought process is that ‘maybe’ the person will work out. At least we have someone manning the desk or willing to be a producer for the agency.

We have had the opportunity as consultants to see the results of these habits. They are not pretty. The candidates who are given the “opportunity” based on a single interview because it’s better to have someone than have no one at all usually prove to be mediocre employees at best. Some of us are lucky enough to hire people who are virtually intolerable. I know this sounds strange- but if you make an obvious mistake and the employee either doesn’t understand the job after convincing you that (s)he has had experience in a similar role, it is not difficult to face up to the problem and terminate the employee. Making a terrible mistake in employee selection is better than hiring the mediocre employee who spend his/her 37.5 hours every week to get a paycheck, doing as little as possible and spending more time socializing with the other employees (wasting their time) or playing on the computer. A terrible mistake will be noticed and the situation resolved. The mediocre employee will drag down your business, potentially for years, until the situation becomes so impossible that you will take action.

But this type of employee can be avoided by becoming better selectors and improving your hiring abilities. Remember, you are an insurance professional. Most agents have never been taught how to hire people and our staffing mistakes have proven that over and over again.

Step One: Never hire on the first interview. Everyone looks good, dresses well and makes themselves presentable in a first impression situation. If you are a small agent and are the only decision-maker, I suggest to bring the candidate back at least two more times. If you have trusted managers, partners or employees, use them for subsequent interviews.

Step Two: PREPARE. Have a list of interview questions (call or e-mail us (800 779 2430; info@agencyconsulting.com and we’ll send you our Interview Guide – a list of questions that will tell you a great deal about a candidate). You don’t have to ask every question on the first interview.

Do not ask question that require a YES/NO answer. Every question should be ‘open-ended’. You are asking the questions to find out about the candidate.

Never interview in a bull-pen or someplace where others can overhear. Pick a quiet, private setting for the interview.

Explain to each candidate what the hiring process will be for your agency (explain that you use the Hiring Process Document and how you intend to send the document to complete for this purpose if you desire). This document should explain the steps you will use and will put the candidate at ease. It will explain the multiple interview process and the steps you will take if the candidate proves valuable enough to pursue.

Step Three: Use an Assessment. There are a variety of assessment tools available to you that are focused on the industry. None are bad. Some are better than others. We use a well-known assessment tool see the A C G Hiring System in our website, www.agencyconsulting.com. Whichever assessment you use is a tool it is not the determining factor for the hire. You make a serious mistake if you simply opt in or out of a hire because of a test result. However, the assessment you use should be testing the candidate’s personality against the traits needed for the job for which you are hiring. If you apply a wonderful service-oriented person to a producer’s assessment it will reflect poorly. Similarly, if you assess a great sales personality for a service job, that, too, should give terrible results. Call us if you want more information on assessment programs.

Use the assessment only for candidates that pass your first interview screening. It is the device that will surface more questions if done properly that you will use in subsequent interviews.

Step Four: Have someone else interview, but make sure that you give the interviewer both questions to ask and their objectives – things you want them to find out about the candidate in their interview.

Step Five: Assuming that the candidate passes your initial interview, scores well on whichever assessment you choose, is acceptable to the other interviewers you use and/or still impresses you in your own subsequent interviews, you are ready for the OFFER.

During your own interview process you should have determined the candidate’s compensation expectations or needs, if any. During this meeting, you should lay out how you pay your employees in the category for which you are interviewing. Presumably, if the candidate is far ahead of your compensation expectations (they expect $75,000 when you are prepared for a $45,000 employee) you will never reach this stage. You would have determined that the candidate’s needs and yours don’t mesh. You should have a Job Description that you can go over with the candidate describing the duties and expectations of the position. If the job is a sales job, you will cover the validation schedule within the expectations of the job. Call us if you would like to discuss our Producer Compensation Program that provides validations schedules for a variety of compensation programs for producers. Only finalize the offer to the candidate if they are amenable to the roles, goals and compensation that you are willing to offer. Negotiations are certainly possible, but you should NOT put yourself in the position of buying an employee at any cost. There is a limit to what you can expend and any employee must be able to give you value for the cost you project.

Hiring people is a process. Few of us savor adding or replacing staff members because of the risk involved. We have ways of perfecting the risk for either producer or non-producer employees and would be happy to discuss your particular situation. All you have to do is contact us. But the key to your successful hiring of long term employees is the care you take in the hiring process. Every one of us is tempted to hire based on liking a candidate when they appear before us. It is much easier and a load off our minds if we interview the person, feel that they could work, and hire them expecting the best. But the cost of a bad hire can sometimes extend to two to three years of compensation for the mediocre employee, lower productivity and potential loss of existing employees and, sometimes, serious side effects to our clients and underwriters.

Be careful. Follow the steps. You will be much more likely to hire ‘keepers’ than ‘warm bodies’.