A few steps are required in order to hire the right producer. Combined with the right training program, my clients enjoy around a 75% success rate with their new hires rather than the 75% failure rate that is common at other agencies. These are facts, not just wishful thinking. I'll cover the steps for hiring producers here.
1. Are you hiring for the right purpose? One of the most common and important reasons so many producer hires fail is not due to the producer. It is because of management. Agency owners and managers are not interested in hiring successful producers. They are interested in hiring producers that are mediocre at best. These are not conscious thoughts -- that would be ridiculous. However, the reality is that many people running agencies want to be king or queen and they do not want to be challenged as the top producer. Since most are good producers, the only position left for other producers is mediocre producer.
The facts back up my position. Most producers never get past about $250,000 - $300,000 in commissions. That may not even be the breakeven point.
Before spending and wasting money on hiring a producer, figure out if you really want to hire someone who may challenge you. The question is no small point. You run the agency and it makes sense that you would be concerned about an employee creating a challenge to your position. Of course this is an ego issue to some degree. It is a control issue. However, it is a real issue and if you are cognizant of your emotions, you will make a better decision.
2. If you are hiring for the right purpose, then hire using high quality tests rather than your gut. Your gut is likely to lead you astray. Somewhere between 90% and 100% of the agency owners I've ever met had guts that told them to hire producers they liked. Whether or not you personally like the producer should be secondary. The first criteria should be whether they can sell. The two criteria are not synonymous.
I definitely have my favorite hiring test. It has served my clients well for twenty years. This is the test from Behavioral Sciences Research Press.
In early 2020 a little tiny book titled, "The New Psychology of Sales Performance" was published by Timothy Coomer, PhD. Tim is the genius who invented ModMaster, is a founder and CEO of SixSigma Actuarial Consulting, and is one of the smartest people in this industry. He took a leave of absence to complete his PhD during which he completed his dissertation by studying which personality traits are most highly correlated to sales success.
As noted, this is literally a tiny book, about forty pages in all and the pages are small. It is really an introduction to his online material that delivers the details and tools agency executives need. Because the book is so short, summarizing key points is difficult without repeating the book. I encourage every reader to purchase Tim's book.
There are two points which I will summarize and build upon using my own experience. The first is Tim's surprising conclusion that "Openness to Experience" is negatively correlated to sales performance. As he notes in the book, this was a surprise finding. Crucial to understanding this key finding is the required distinction between openness to internal vs. external experiences. The study only deals with internal experiences -- not external. My suggestion to readers is to ABSOLUTELY not confuse the two.
Tim's theory is that openness to internal experience leads to too much anxiety and possibly doubts and hesitation. In Tim's opinion, the way to identify whether a person has too much openness to internal experiences is to identify whether they have call reluctance. The test offered by Behavioral Sciences is focused on identifying Call Reluctance. Its nickname is the Call Reluctance Test.
My experience with producers who succeed but are numbskulls kind of confirms Tim's hypothesis. Although the following is anecdotal and I don’t have the statistics to prove a correlation, over time I have seen so many producers succeed who probably should not have succeeded because they really did not have a clue what they were doing. Some were pretty stupid and all within this segment were ignorant. However, they were all really confident. These producers would believe everything their boss or a company representative told them about a product. They never questioned the validity of that information and repeated what they heard to clients and prospects with so much confidence, they made sales. These producers had zero internal openness to internal experiences.
I know of one direct writing company that, maybe by design, maybe by luck or other means, specifically hires producers with this trait. The producers have no idea what they are doing, do not know coverages and do not know how to think. One reason most fail when they come over to the independent side is that independent agency systems usually require producers to know something about coverages and agencies do not provide enough support to clean up after the producer leaves the client's office.
Perhaps agencies should rethink this process, but if they do they should reduce producer compensation substantially to pay for all the extra support because someone has to be able to think.
The second point that Tim makes which is essential to success is that training must be methodical, especially for younger producers who lack grit (his study shows younger producers lack the grit older producers possess -- whether this is the result of winnowing out producers over time or a generational issue is not determined). The training must be multi-dimensional too.
Historically, methodical, multi-dimensional training has been beyond the ability of almost all agencies and brokers. Most agency owners and executives cannot even conceptualize what this means. Tim's book gives a good preview of the kinds of training required.
The good news is that now the industry has the various resources available to almost any agency that truly wishes for high quality producers to be part of their team. These are third-party resources. One must use these various resources, but you don't have to do the training yourself. The owner/executive must coordinate the training or hire a third-party to do so.
Recognizing multiple training resources is so important. Using only one trainer has been an Achilles' heel of producer training for too long. Someone training in one area is an expert in that area but a good producer needs many skills. Think of training a producer like training an athlete. An athlete has different coaches for improving different skills. A producer needs sales training, coverage training, grit training, at times Emotional Quotient training, communication skill training, and sometimes, especially for newer producers, training in how to dress.
I strongly recommend reading Tim Coomer's book. I am excited to add this book and its resources to my list of hiring and training resources that will become part of my methodical playbook for my clients. Maybe we can push the success ratio just a little higher now!
NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.