Getting HR off the back burner

Regional agent association offers a suite of online tools to assist agencies with an array of human resources concerns

By Nancy Doucette

“It’s a daunting task,” says Angela Malizia, referring to the prospect of developing an employee handbook. “I’m an insurance person,” she emphasizes. “HR is not my area of expertise.”

Malizia is vice president of the Lunar Agency, Inc., a nine-person shop located in Newtown Square, Pennsylvania. Like many other insurance professionals, she has discovered that HR oversight has seeped into her job description.

“We’re in business to write P&C insurance,” notes George Komelasky, vice president of Paist & Noe, Inc., a 15-person agency located in Richboro, Pennsylvania. He points out that as agencies grow, the need for people management grows as well. But all too often, the agency principal may not fit comfortably into that role. “An individual who is a good sales person isn’t necessarily a good administrator,” he observes.

Malizia and Komelasky share more than their opinions about how HR responsibilities impact agency managers. They both are active in the Insurance Agents & Brokers (IA&B) organization—a partnership of state associations that serves agents in Delaware, Maryland and Pennsylvania. Both participate on the IA&B’s Member Agent Panel (MAP) in their region.

According to Debbie Fouse, chief operating officer for the IA&B, about three years ago IA&B began hearing from a growing number of members who, given the increasing number of legal requirements impacting business operations, needed help—especially in the area of human resources.

She recalls that members were asking for core HR products to help them become compliant with federal, state and local laws. Additionally they wanted to be sure they were engaging in solid employment practices that would “keep them out of legal hot water but also help them in retaining their employees and having good practices,” she says.

Fouse reports that IA&B conducted a series of meetings with MAP members—about 150 people—to get a better perspective on their HR concerns. She explains that the MAPs are the IA&B’s primary vehicle for gathering member feedback regarding the association’s programs, products and services, and the value they offer member agents.

“We learned that there was a very small percentage who had any type of formalized HR resources in their agency. In most cases the owner or the principal was the one performing the HR function in their agency, and it was pretty much done on an ‘as needed’ basis—they take off their sales hat and become the HR person.

“According to the research,” Fouse continues, “members wanted someone they could call in an emergency—a hot line. They also wanted a handbook that was compliant—that had what insurance agents needed—because there are some specific HR requirements for insurance agents. Additionally, they wanted basic tools and guidelines.”

Based on the survey results and requests from members asking for HR resource recommendations, the IA&B boards of directors determined that the association needed to offer HR services as a value-added benefit for members.

In February 2008, the IA&B rolled out its HR Solution© product to members. HR Solution is a suite of online tools developed with the assistance of Human Resources Management Associates, Inc. (HRMA), based in Lancaster, Pennsylvania. Fouse says that IA&B researched several HR firms in the Northeast before deciding on HRMA.

“There are a lot of other turnkey products out there,” she notes. “But HRMA is very familiar with the laws in our three states so they could customize their offering to our tri-state area. They were willing to work with us to tailor a solution to our needs.”

What’s under the hood

The components of HR Solution include: (1) HR Audit Tool, (2) HR Handbook, (3) HR Administrative Guide, (4) HR Administrative Tools, and (5) On-Call Consultation.

The IA&B recommends that agencies complete the audit first. The audit consists of 82 yes/no questions divided into 10 sections. The questions address the agency’s organization and structure, recruiting and selection, records and reporting, legal and regulatory compliance, communications, supervision, performance management, compensation, training, and promotion and development. The program generates a report that highlights the areas where the agency needs to make adjustments due to legal noncompliance and offers guidance on how to improve employment practices.

Both Malizia and Komelasky heeded the IA&B’s advice and completed the audit first before delving into the other components of HR Solution. “I was pleased to find that we were doing most things fine,” Malizia recalls. “The audit was a good jumping off point. It pointed out the areas that I needed to address.”

Komelasky comments: “I’ve been in the agency for 30 years. We could just keep doing what we’ve always been doing. But agency owners and principals want to run their agencies the best that they can. The audit portion of HR Solution provides a measuring stick.

“When we did the audit, we learned that, overall, we were pretty much in compliance. We’ve made a priority of the areas that the audit identified as factors we need to address. Before we did the audit, those areas weren’t being considered at all,” he says.

Komelasky says the audit also alerted the agency that it would have to do some things differently once it had 15 employees. At the time of the audit, the agency had fewer than 15 on staff but was contemplating hiring additional people. He says the audit gave the agency a roadmap so it could prepare.

Fouse points out one of the audit questions that frequently catches agency owners off guard: “Does the agency have on file accurate and complete I-9 forms for all employees hired since November 1986?”

“When I asked that question of many of our MAP members,” Fouse says, “probably one in each group even knew what an I-9 was and had completed it.” The I-9 (Employment Eligibility Verification) is now a requirement through the U.S. Department of Homeland Security. All employees must complete one to verify that they are legally eligible to work in the United States. The penalties can be pretty stiff—from $100 to $1,000 per day per employee.

Malizia says she used the audit as the foundation for the agency’s long-awaited employee handbook. The audit had highlighted some areas where the agency needed to establish a formal policy. So she discussed those concerns with the agency president. “We were going to be putting things in writing once we created our employee handbook so we needed to formalize some aspects of our operation,” she notes.

The employees of the Lunar Agency received their handbooks on July 1, 2008. “We wouldn’t have the employee handbook today if not for HR Solution,” Malizia admits. “It would still be on the back burner. I had been telling staff for years that we were going to have an employee handbook. So when they actually got one, I think there was an element of shock.”

Fouse explains that the 60-page template addresses basic employment policies with a focus on legal compliance. Content headings include employment; timekeeping and payroll; work policies; safety, health and security; and benefits. The handbook also includes an associate non-disclosure form as well as an associate acknowledgement form. It’s in a simple Microsoft Word format so agents can customize and tailor it to suit their organization.

“A lot of operations don’t have the time to create a handbook,” Komelasky observes. “And as agencies grow, attention to ‘company policy’ generally isn’t a priority. When an agency has only two or three people on staff, ‘policy’ is communicated by word of mouth. But as an agency grows, it gets to be like the kids’ game of telephone—what is said and what is heard frequently aren’t related. Misinformation can be circulated.

“The handbook enables agencies to communicate clearly with employees—telling them: ‘Here are our business hours, here is how we operate, these are the holidays we observe,’ so that there’s no miscommunication, no misunderstanding. Maybe the agency doesn’t want to include all the headings and categories detailed in the template. Maybe I don’t want to have a formal bereavement policy for my agency, for instance, but the template gives me the option,” he explains.

Malizia says she’s grateful that she will be getting up-to-date HR information, thanks to HR Solution. “In the past, I wondered whether I was getting all the current HR information that was available. Now with HR Solution, I’m certain that I’ll be getting the updated information.

“There are so many legal pitfalls in the HR area,” Malizia continues. “One wrong move—even if you make it with the best of intentions—you could be facing a lawsuit. Even if you prove yourself right in the end, it can still be costly.”

Malizia is glad that when the Lunar Agency renews its EPLI policy this year, she will be able to provide a copy of the agency’s employee handbook. “Many carriers take the availability of a handbook into consideration when calculating the premium,” she says.

Nuts and bolts

Fouse explains that the 142-page Administrative and Compliance Guide that is part of HR Solution outlines and discusses a number of employment practice areas: record keeping; complying with various regulations; recruiting, hiring and termination. She points out that the guide includes an entire page of questions not to ask during an interview.

“The Employee Handbook template is the ‘what’ of HR Solution,” she observes. “The Administrative and Compliance Guide is the ‘how’ to implement what is in the handbook.”

Komelasky notes: “We recently hired a couple of producers and a couple of administrative staff. Suddenly we had some of these questions that we needed answered. We hadn’t thought about them in years. HR Solution gave us the tools to do the job and do the job properly.”

Fouse adds that the 111-page Administrative Tools component is another implementation piece. She says it includes the forms described and illustrated in the Administrative and Compliance Guide. Agencies can copy and paste the employment application or disciplinary form, for example, and use the record-keeping checklist or sample interview questions.

An Employment Law Chart is also part of HR Solution. It provides a snapshot of the alphabet soup of acronyms for HR-related regulations. “Looking at the Employment Law Chart, many of the laws don’t apply to us because we have only eight employees,” says Malizia. “But we want to do what’s right and fair for our employees so even if the laws don’t apply, we like to know what we should be doing in these areas.”

Fouse acknowledges that while the printed material available through HR Solution is comprehensive, there are situations that require advice or guidance—especially in instances that may have legal implications. To respond to those occasions, HRMA professionals are on call either by toll-free number or e-mail. “The consultation is base level advisement only,” she points out. “Within HR Solution, HRMA gives guidance in the core HR areas only.” Beyond that, she says, HRMA also offers IA&B members a 15% discount should an agency need services outside of what is available through HR Solution.

She notes that HR Solution is available exclusively to IA&B members. There is no additional charge for it. Members register for HR Solution online in the password-protected Members Only section of the IA&B Web site.

Fouse says that input from members indicates they’re taking comfort in knowing that HR Solution is available to them in case they run across an employment issue or problem. And that like Angela Malizia, they now can create that long overdue employee handbook and get HR off the back burner.

For more information:
Insurance Agents & Brokers (IA&B)
Phone: IA&B Member Service Center (800) 998-9644 Option 0
Web site: www.iabgroup.com