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  • Writer's pictureChris Burand

Productivity and Leadership

What is the best way to reduce your exposure to EPL suits and DOL investigations? Employ fewer people.

I received an email newsletter from a national law firm summarizing the new employment laws in each state. These laws are going to make employment so fair that, especially with Chat AI, employers will simply find alternatives to employees. That will take time. What can you do now?

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Employ fewer people. Employing fewer people means fewer exposures to suits and investigations and those exposures will be easier to manage because there are fewer people to manage.

Productivity will increase because fewer employees doing more work, usually at higher wages, is an extremely effective solution for everyone except for those who are not that good at their jobs. Higher productivity is also not great for leaders who cannot lead. My agency clients with strong leadership do not have problems finding employees and they also do not need as many employees. The proof is clear that high quality leadership results in higher productivity.

Unless you are a strong, smart leader willing to address performance issues head-on, the following advice is not for you. If you are not that kind of leader and you attempt to implement the following points, the odds are you will make your situation worse, not better. Quality leadership must precede the following actions.

1.) Employ High Quality People. High quality producers and staff can do more in eight hours than low quality employees can do in days. A reader may be thinking, "Easier said than done!" It is undeniable that this is easier said than done, but the real question is whether my suggestion is feasible. It is. A lot of work goes into the execution of this goal, but this is where leadership must prevail. Tough decisions must be made. Decisions that only quality leaders are willing to make. As one of the great leadership gurus of all time, Abraham Maslow (originator of Maslow's Hierarchy of Needs), noted, "...leaders have to be able to withstand [being] unpopular, without falling apart. The kind of person who must be loved...will not make a good leader in most situations."

Most of the leaders in this industry advanced through sales. In sales being loved or at least liked is the key to success. Salespeople generally do not make good leaders because what serves them well in sales becomes a weakness relative to leadership.

2.) Pay Your Employees More. When you offer to pay higher salaries, higher quality people will respond to your want ads and searches. Also, when you pay more, you have the right to expect higher quality work. You will pay more for your employees, but not enough to erode the extra profits.

3.) Provide Quality Training Programs. Quality training is particularly important relative to hiring producers. My clients that have built an exacting new producer hiring and development process have new producer success rates 260% better than average. The net result is that one of their producers can achieve the same production within five years as agencies without quality training can get out of three to four producers in the same amount of time.

4.) Institute First-Class Procedures And Require All Employees To Adhere To Them. I have evaluated this point thoroughly through my proprietary statistical systems and agencies with quality procedures can achieve the same amount of service (account manager level service) with 20% fewer employees. This holds true in both personal and commercial lines. If you combine this increase with higher quality account managers, the savings increases even more.

If you are an agency owner reading this article, the odds are nearly 100% that you did not build your agency so you could enjoy being an HR manager. Given all of the new laws and the expenses associated with those laws in the form of new taxes, compliance, and proof of compliance, you will be spending less and less time doing what you love -- selling and being with your clients. Instead you will be spending more and more time filling out paperwork.

The fewer employees you have, the fewer HR headaches you will have. You will reduce your taxes. You will increase your profits. All else being equal, you will increase your agency's value -- at least with some buyers. Other buyers are so inefficient they will not pay for that extra value because they know they will ruin that value immediately upon acquisition.

Increasing efficiency, without cutting corners will also reduce your E&O exposures. Additionally, and possibly more importantly, more constructive efficiency, not the efficiency created in a sweathouse environment, results in a far better work environment. Fewer meetings are required. Your employees will feel a sense of accomplishment when they see the results which will then reinforce their sense of achievement. Employees will not feel they have to clean up after others' errors.

Leadership is the key. Being an owner in a leadership position does not make you a good leader. If you want to improve your productivity in a highly constructive manner, let me know. In fact, if you just want to know how productive you really are using the best metrics, let me know.


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.

None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article. Regulated individuals/entities should also ensure that they comply with all applicable laws, rules, and regulations.

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