Return to Table of Contents

The Innovative Workplace

Hiring agency winners

Quality of hires trumps other factors

By Don Phin

Half of the employees in the insurance industry are above average in quality and half are of below-average quality. Which half is at your agency? How would you even know?

In his best-selling books, author Jim Collins reminds us that the single most important factor in the making of a great company is having the right person in every seat of the bus. He didn't say having the best product, or Web page, or service. He said having the right people. First who; then what.

Unfortunately, in my experience, most agency principals or administrators view the hiring process as something to get over and done with . . . so we can get back to doing our jobs.

No matter whom we hire, there are a number of critical steps in the hiring process, all of which should seem like common sense.

Excellent Hiring 101

Specifically identify the need and then reduce it to a job description. A good head start is the free O*NET OnLine Web site ( For example, a detailed description for Insurance Sales Agents is available at A description for Insurance Policy Processing Clerks (Account Managers/CSRs) is at Additional excellent info can be found at the federal Bureau of Labor Statistics Web site (

Be very clear about the skill sets and personality traits that would most likely result in quality performance given the job expectations. For example, if you're hiring a CFO, you can test the applicants on their knowledge of GAAP and QuickBooks. We recommend for such testing.

Conduct extensive interviews, including prescreening and multiple individual interviews, as well as group interviews.

Conduct extensive background checks. There is no excuse today for failing to obtain information about the person you are interviewing. For every applicant, you should conduct a criminal background check, a credit check where permitted, employment history and references, college degree(s), and immigration status. As always, I recommend you outsource these tasks to so you can be sure these checks are done the right way.

Prepare necessary offer letters and contracts.

Finally, arrange for drug tests and pre-employment physicals (it's especially important to look for carpal tunnel problems with data entry positions).

These are common-sense steps, and none of it is rocket science! I remember doing a workshop for a group of 500-plus HR executives in Florida. I went over these steps and asked participants to raise their hands if they believed this approach was logical. Every hand went up. Then I asked them to keep their hands up if this is in fact what they do at their companies. Less than one fourth kept their hands up. In a room full of HR executives!

On that day I realized that the real challenge and opportunity is the "Why not?" question. I find that agencies make bad hires when they fail to use logic and instead are driven by emotion. Here are a few of the emotional reasons why we make bad hires:

Desperation. Hiring decisions often are made out of desperation. Your executive assistant quits and you need someone to replace him or her now. Your agency is growing so fast that you just throw in the bodies and worry about them later. It's so hard to find account managers in your area that anyone will do. We've all made these desperation hires, only to find out later that the person can't do the job. Don't fall prey to fear-based hiring. Think of alternatives. If you can't devote the necessary time to the hiring process, then hire a temporary or leased employee. Borrow an employee from another agency. Don't hire in haste; you may end up with waste.

"I'm too busy." We're all busy, and sometimes we just don't want to invest the effort to conduct a thorough hiring process. We have to fight this very human tendency to take shortcuts and hire the first person who walks through the door. The best way to avoid this pitfall is to have a defined hiring process in writing that must be followed without exception. If you still don't want do go through the process the right way, then hire someone else to do it for you!

Love at first sight. Beware of the infatuation trap: "I love this guy. He reminds me of me!" A series of surveys reveals that most interviewers make the hiring decision within the first 10 minutes of the interview and spend the next 50 minutes justifying the decision. We buy cars the same way. We fall in love with a car because it looks sharp and is loaded with cool options, and then we search for objective data to justify our emotional decision. We all know that "facts tell, but emotions sell." Just because someone looks and sounds good doesn't mean that he or she is right for the job. You can keep infatuation out of the process by having colleagues sit in on interviews and by conducting the background checks described above.

"My friend says he/she is perfect!" Just because your friend thinks he or she knows someone doesn't mean the prospect is right for you. When a friend recommends someone, we may let our guard down and skip the necessary steps in the hiring process. Whether it's a friend or a headhunter, don't let someone else make your hiring decision for you. The last case I litigated involved the hiring of a million-dollar mistake recommended by a desperate recruiter! Go through the entire process with every candidate, no matter who made the recommendation.

Blindly promoting from within. Most of us are firm believers in promoting our own people. But an employee who excels in his or her current position isn't necessarily the best choice for a higher-level job. It's common to reward top-performing employees by promoting them to management positions, but their skills and experience don't guarantee that they'll be good at managing other people. We've seen many a successful career go downhill after such a promotion. When considering an inside promotion, be sure to follow every step in the hiring process you use with outside candidates. And remember: Promoting solely from within can create inbreeding and stagnation. You should fill at least one-third of your new positions from the outside.

Stereotyping. Many of us remember when conventional wisdom held that a woman can't be a great broker, a man can't be a great account manager, or a minority group member can't be a great executive. In the past, orchestras were composed almost exclusively of male musicians. To eliminate this bias from the hiring process, orchestras began to conduct "blind auditions" where a curtain was placed in front of the musician as he or she played. The hiring rate for female musicians doubled when decisions were based on the quality of their performance, not their gender. The fact is, the best and brightest are not always going to look and act the way you think they should! Promoting diversity isn't something you do simply to comply with the law. In today's competitive economy, it's an absolute necessity.

Ask the right questions

When interviewing a candidate, one of my favorite questions is: "What felt unfair to you in your last job?" Of course, prospects who tell you "nothing" are lying. If they do tell you what seemed to be unfair, do as a Six Sigma trainer would do and ask five "whys." The candidate's responses will put his or her personality on full display. At some point, every employee is going to feel that something at work is unfair. What you want to know is how a candidate deals with what he or she perceives to be unfair.

Here are a few more of my favorite interview questions:

• What's the most important thing you do every day? How do you know if you're doing this thing well or not?

• Whom do you best like selling to?

• Have you ever blown a sale that you should have made? What happened?

• Have you ever been surprised to make a sale that you didn't expect to get? Why do you think you got it?

• How would you describe your ability to communicate?

• How do you prepare yourself for a prospect meeting?

• How did you get good at_______?

• What's more important to you: making money or making a difference?

• What do you consider to be your greatest strengths? What have you done to make the most of them?

• What do you consider to be your greatest weaknesses? What have you done to correct them?

• Who is the most successful person you've met in your position? (If the candidate doesn't answer "Me, of course," ask why.)

• Why should I trust you?

• Where would you like to be five years from now?

Summing up

The cost of a bad hire can be substantial. For example, one agency hired the wrong sales manager. Not only did the agency's sales decline for two straight years, but when they fired him they were hit with a wrongful termination lawsuit that cost them over $500,000 to defend and settle. To make matters worse, this agency didn't have EPLI coverage! Don't be that agency. A bad hire will cost you in time, money, lost revenue, and possibly a lawsuit.

When going through the hiring process, think like a marketer. When we market coverages and services, we invest our time and resources so we can enjoy the long-term benefits of acquiring and retaining a desirable client. Likewise, our investment in the hiring process will allow us to build a staff of talented professionals who will contribute to our growth over the long term.

Hiring is the "tipping point" in agency development.

Take the time to hire only the best and keep them that way!


Click thumbnail below to launch
story in our Flip Book edition

page page

Return to Table of Contents