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Recruiting and Developing Young Producers

Recruiting and Developing Young Producers. Tom Doran. Pursuing Young Sales Talent. People are an agency’s greatest asset Finding those people is often the agency’s greatest challenge There is an opportunity to include more young individuals in the search for talent

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Recruiting and Developing Young Producers

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  1. Recruiting and Developing Young Producers Tom Doran

  2. Pursuing Young Sales Talent • People are an agency’s greatest asset • Finding those people is often the agency’s greatest challenge • There is an opportunity to include more young individuals in the search for talent • What can we learn about hiring and developing young producers from those who do it well?

  3. Producer Recruiting and Development • The Case for Hiring Young Producers • The Economics of Producer Hiring • Best Practices for Producer Hiring & Development

  4. 2009 Young Producer Study

  5. Successful Young Producers • Hired under the age of 30 • Hired within last 10 years • Selling Commercial P&C or Employee Benefits insurance • Successful

  6. Young Producer Study Process 206 54 91 BASELINE SURVEY IN-DEPTH FIRMS IN-DEPTH PRODUCERS • Assessed baseline level of young producer hiring in the industry • Identified firms with success hiring young producers as well as strong sales cultures • Completed detailed survey on hiring and development practices and production results • Identified young producers who have been successful • Detailed survey • Personality and behavioral assessment • Interview

  7. Baseline Survey Results Frequency of Young Producer Hires Success of Young Producer Hires

  8. Key Findings • College recruiting is working

  9. College Recruiting Frequency

  10. College Recruiting Success Months Until Validation Year Three New Business

  11. Successfully Recruiting Colleges • Investing in on-campus recruiting • Establishing an internship program • Hiring in classes Why recruit at colleges? Because that’s where the talent is

  12. Key Findings • College recruiting is working • Well-rounded individuals trump academic superiority or sales experience

  13. Look For the Raw Athlete 58% 41% 48% • Percentage of Successful Young Producers who were involved in at least two campus activities and who worked during school • Percentage of Successful Young Producers who were involved in at least two campus activities, had a leadership role in at least one student organization and who worked during school • Percentage of Successful Young Producers who were involved in at least two campus activities, worked during school and maintained a 3.0 GPA or higher

  14. Variables Influencing Success

  15. Key Findings • College recruiting is working • Well-rounded individuals trump academic superiority or sales experience • Young producer economics can be attractive

  16. Comparing Returns

  17. Capturing Returns • The economics of Young Producer hiring don’t appear riskier or weaker than the economics of producer hiring in general • Young Producers give agencies an opportunity to diversify risk in producer hiring • Young producer hiring can be a low-cost organic growth strategy

  18. Key Findings • College recruiting is working • Well-rounded individuals trump academic superiority or sales experience • Young producer economics can be attractive • Young Producer hiring is a different game

  19. Attracting Young Producers • Compensation opportunity is tremendous • For younger producers, cash is more important than equity • Ability to build relationships with clients • Freedom and flexibility • Gratification: “Winning” Reaching the Target Audience Messaging 46% Percentage of Successful Young Producers entering the industry via family, friends or “accident”

  20. Managing Younger Producers • Young producers generally need more extensive training in the insurance industry and in sales • Mentoring programs are critical • 97% of the firms in our study had mentorship programs • Most programs lasted up to three years or longer • Hire in classes to foster competition and efficiently spend training dollars

  21. The Economics - The Cost of a New Producer

  22. New Producer Five Year Cash Flow Return on Investment

  23. New Producer Five Year Total Return on Investment (with asset value included)

  24. 2 Reasons why Reinvesting in Agency is so Positive Financially • State and Federal Government subsidize people investments • Asset value is larger than most people realize

  25. Four Key Principals in Recruiting and Development • Recruit in the Right Places • Recruit at the Right Rate • Set New Hires Up for Success • Make Quick Mistakes

  26. Recruit in the Right Places - Producers Current Sources Success Rate 62% All categories, 2013 BPS Study Are You Recruiting in the Right Places?

  27. Recruit in the Right Places - Producers Easier to Teach Insurance or Sales? Source: Group of Large Agents

  28. Recruit in the Right Places - Producers • Maturity • Business Acumen • Compensation Requirements • Active Management Required • Life Experiences • Network Challenges of Under 30 vs. Over 30 What is Your Agency Best Equipped to Handle?

  29. Recruit at the Right Rate – Effective Investments in Sales Talent Net Unvalidated Producer Payroll Source: 2013 BPS, Agencies with Revenue between $10.0M and $25.0M

  30. Set New Hires Up for Success - Producers On a scale of 1-10, what factors have had the most impact on your success? Source: Young Producer Study Update Mentoring is Perhaps Most Important

  31. Make Mistakes Quick - Sales How Soon Do You Know If a Producer will be Successful? Source: Young Producer Study

  32. Make Mistakes Quick - All • Culture • Economic • Clients • Carriers • Productivity Three Key Principles Impacts of Non-Performance • Hire and Fire Day One • Clear and Measurable Targets • Frequent Performance Assessments Misses Have Broad Impacts

  33. To access Reagan’s Young Producer Study Update – Three Years Later, go tohttp://tinyurl.com/kjjnf75or visit our webpage atwww.reaganconsulting.com

  34. Tom DoranSenior Vice President & Principal Tom joined Reagan Consulting as a consultant in 1993 and became a principal in the firm in 1995.  He holds an undergraduate degree in Computer Information Systems and a Masters of Business Administration from Georgia State University. Before joining Reagan Consulting, he worked in the computer industry, both as a software developer and as a management consultant. Tom’s areas of expertise include merger and acquisition representation, agency valuation, ownership perpetuation planning, agency valuation enhancement and strategic planning facilitation. Tom is a regular contributor to Reagan Consulting’s industry studies and is frequently published in various insurance industry publications. He also speaks on a regular basis to industry trade groups and associations on a wide variety of topics concerning the insurance distribution system. 404.869.2534 tom@reaganconsulting.com

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