Building and maintaining healthy workplace cultures takes work, and the fastest growing agencies are those most likely to be taking steps to improve their agency's culture.
The Great Resignation has kept agencies on their toes, and while the labor market is cooling—job openings in the U.S. were down to 10.7 million in June 2022, the fewest since September 2021—the labor market is still tight with 4.2 million workers quitting their jobs, Reuters reported.
Retaining staff is crucial to agency growth and a company's culture has a huge impact this. In fact, a toxic corporate culture was the strongest predictor of turnover during the Great Resignation—10 times more important than compensation in predicting turnover, according to a MIT study.
To put it more positively, workplace belonging leads to a 56% increase in job performance and a 50% reduction in turnover risk, according to BetterUp.
Workplace culture and teamwork is the No. 1 area agents say makes their agency a great place to work, according to the 2022 Agency Growth Survey from Liberty Mutual and Safeco, with 63% of all agents saying that's what makes their agency a great place to work.
However, in the one-third of agencies that are aiming for aggressive growth, such as doubling the agency size in five years, the culture is even more of a perk. Sixty-nine percent of agents in growth-focused agencies say it's the best aspect of the agency, compared to 60% of agents in agencies that are aiming for slow and steady growth, according to the study.
Building and maintaining healthy workplace cultures takes work, and the fastest growing agencies are the ones most likely to be taking those steps to improve their agency's culture.
Fast-growing agencies are growing at a rate more than double that of agencies that are planning for slow and steady growth, with an average revenue growth of 22% year-over-year, as opposed to 9% growth for those aiming for slow and steady growth.
These growth-focused agencies are more likely than their peers to say they're focusing on hiring strategies, digital use, workplace cultures and more. Growth-focused agencies are also more likely than other agencies to be focused on diversity, equity & inclusion (DE&I).
For instance, 51% of growth-focused agencies are focused on diverse recruiting and hiring, compared to just 33% of agencies that are aiming for slow and steady growth. Growth-focused agencies are also more likely to include breaking into new marketing segments, such as younger consumers or Hispanic markets, in their five-year growth plan—41% of growth-focused agencies versus 24% of slow-and-steady growth agencies.
But it's not just growth-focused agencies that are engaging with DE&I. Four out of 5 surveyed agencies that have seven or more staff members are currently or believe they should be engaging in DE&I activities. These activities include creating environments where the team can be their authentic selves, managing cross-generational issues, engaging staff in DE&I conversations and more.
There is some disparity in how agencies' inclusivity is viewed by different team members. While 69% of agency leaders in agencies with seven or more staff members say their team can be their authentic selves, only 46% of frontline staff agree. Similarly, 67% of leaders say their agency is focused on fairness in performance and compensation, but only 44% of frontline staff agree.
Investing in DE&I can also help agencies break into new markets by building workforces that reflect the communities they serve. One example of this is offering materials and service in languages other than English. Forty percent of respondents said their agency has staff that speaks a language other than English, but only 21% say their agency is focused on offering service in other languages, according to the Liberty Mutual and Safeco study. However, nearly half of agents younger than 54 believe this needs to be a focus soon. Younger agents are also more likely to say that having a diverse agency that reflects the customers should be a focus soon.
“At Liberty Mutual and Safeco, we are deeply committed to helping independent agents thrive today and tomorrow," said Tyler Asher, president of independent agent distribution, Liberty Mutual and Safeco Insurance. “As the world and the workforce changes, understanding—and embracing—the principles of diversity, equity and inclusion will be a necessity for any forward-thinking business."
“Collectively, we can do more: To remove barriers to entry into our industry, build a workforce that better reflects the communities we serve and ensure the independent agency system remains strong well into the future," Asher added.
Liberty Mutual and Safeco Insurance released the findings of the 2022 Agency Growth Study in May, which surveyed more than 730 independent insurance agents to learn about their strategies for growth. The survey covered how agencies are using digital tools, which emerging trends they think will have the biggest impact on their agencies and the tactics they are using to grow.
AnneMarie McPherson Spears is IA news editor.