Retaining and Compensating Producers
Finding and retaining talent is a matter of finding the right compensation structure. While good employees can’t be taken for granted, there are a number of financial constraints that can make this seem like an unsolvable puzzle. It can be helpful to speak to someone else about these matters if you’re having a difficult time reconciling the needs of your staff with the needs of your budget. It can be difficult to see the solution when you’re mired in the middle of discussions about money and benefits. An uncomfortable topic to many even under the best of circumstances, see why ignoring it will only make matters worse.
The Cost of Turnover
The direct cost to replace a mid-level employee will generally cost about 20% of that worker’s salary. This can be a major expense to swallow on its own for company owners. But it also means having to go through a training period to catch up to the company’s routines, policies and values, which can be mentally draining. And the real costs to the company over time are difficult to quantify. When a person has a chance to become established at a company, they raise expectations to a certain level. Assuming that you value the employee’s contribution and that others do too, changing those routines can have a significant impact on both moral and customer experience that can be felt for years to come. While some turnover is unavoidable, the higher the rate climbs, the less stable your company will be.
Changing the Structure
Sometimes companies use a set structure for employees and remain unwilling to change that structure for anything. Most of the time, that structure heavily rewards new business rather than retention of business. This type of rigidity though sends a clear message to employees that while they may be expected to be flexible with their time and their efforts, management is unwilling to do the same. While these rules are set in place for a reason, it doesn’t mean that a company-wide shift is impossible. Employees who feel as though they’re being taken care of are more likely to cooperate. It can make a major difference when they know the company is making the effort when it comes to how they reward their best people. And contrary to many manager’s fears, there are ways to mitigate the amount of ‘gaming’ the system.
Meeting in the Middle
Retaining talent does not mean writing a blank check to your top producers. What it does mean is that compromise is encouraged, and employees understand that if their needs can’t be met, that reasonable attempts were made to secure their wants. It may mean acknowledging that retaining clients can often mean more work than winning new business. Compensation may also have nothing to do with money. Whether it’s giving someone more experience, a title bump or simple name recognition, employees today may find value in different things. The best way a company can set themselves apart is to promote understanding between everyone. The longer there’s a divide between two sides, the more likely employees will complete their work as a matter of duty rather than any kind of passion for the job.
Trusting in the Process
It starts with putting your people into brackets, from the highest to the lowest producers. Agency Brokerage Consultants has been helping agencies see the best way to structure bonuses, compensation and rewards, and we can help you do it too. Our solutions are not a one-size-fits-all answer, but a way to customize your budget so that everyone feels comfortable on both sides of the equation. When your best talent feels like they’re being heard, they’re much more likely to put roots down at the company. If everyone in the company feels as though they’re working on an island though, the ramifications can be seen in both retention and morale. And many companies do promote this sentiment without even realizing it. It is possible for a shift in the culture though. While it won’t happen overnight, there are ways to promote good will and maximize the use of company funds at the same time.
Agency Brokerage Consultants understands both large and small agencies alike. We’re here to find out more about you, and then put our experience to good use when it comes to retaining your best producers.