Agencies and brokerages that understand the main factors driving people to switch or leave jobs can achieve much better retention and potentially hold on to the talent that drive growth.
Even though job openings have started to fall, the gap between job openings and available workers remains over 5 million, according to CNBC's report on the U.S. Bureau of Labor Statistic's April survey. However, agencies and brokerages who look beyond the headlines to understand the main factors driving people to switch or leave jobs can achieve much better retention and potentially hold on to the talent that drive growth.
The majority of workers who quit a job in 2021 left because they had low pay (63%), no opportunities for advancement (63%) and felt disrespected at work (57%), according to Pew Research. A well-designed retention strategy can have a huge impact on hiring and retention, perpetuation, culture, value creation and the overall performance of the business.
Here are three important factors to consider when creating your retention strategy:
1) Create an employee experience that ensures a successful and sustainable retention plan. Employees have shifted their attitudes post-pandemic. Many value flexibility, learning and development opportunities and mentorship. Among professionals currently working from home, half would quit if their company required them to return to the office full time, according to a Robert Half study.
An employer that offers hybrid or flexible work options may be able to better retain top talent. And with the increase in remote and hybrid work, onboarding through virtual meetings and the lack of in-person interaction has forced organizations to reconsider their development approach. Regular training and development programs will not only help employee retention by improving worker contentment but can help them build new skills, methodologies and strategies that will ultimately lead to organic growth.
2) Create purpose with perpetuation, strong culture and internal mobility. People who are aligned with their purpose at work tend to be more productive and more likely to remain with the organization. When more employees feel aligned with their companies' purpose, they tend to have better engagement and loyalty.
Top predictors of workplace satisfaction are the culture and values of the company, the quality of senior leadership, and internal mobility, according to a 2019 study by Glassdoor.
One way insurance agencies can improve purpose is to have an effective and clear perpetuation strategy. A well-planned ownership strategy for key staff can help create a strong feeling of purpose and motivation for the team.
3) Improve producer compensation plans. One highly effective way to boost talent retention and profit margins while driving operational improvement is to modify producer compensation plans. As the industry has changed and firms have added services, capabilities and a higher level of technical employees, firms can benefit from a more focused approach to refining compensation.
There's no one-size-fits-all producer compensation plan, but a firm should evaluate its cost structure, location, staffing needs, and long-term growth and profitability goals, and then develop an appropriate plan that delivers a sustainable return on investment to shareholders and partners.
Now is the time to start implementing strategies that will help your company hire and retain the necessary talent to thrive. Doing so will ensure that your firm stays competitive even as others are impacted by talent departures.
Tommy McDonald is a director in MarshBerry's Financial Advisory Division. Investment banking services are offered through MarshBerry Capital, LLC, Member FINRA Member SIPC and an affiliate of Marsh, Berry & Company LLC; 28601 Chagrin Blvd., Suite 400, Woodmere, Ohio 44122; 440-354-3230.