By Nancy Doucette
This is Part 3 of a multi-part series focusing on innovative, but commonsense approaches to managing employees. Part 1, which appeared in the July issue, examined the positive results that can occur when an agency establishes a consistent approach for testing prospective employees. Part 2, which appeared in the August issue, focused on the value that comes from creating concise job descriptions that can facilitate productive performance reviews and minimize turnover.
Jonathan Kaplan had a problem. As vice president and commercial lines manager for the Owens Group, he was looking for an experienced commercial lines contact account executive. But in Englewood Cliffs, New Jersey, where the Owens Group is headquartered, he wasn't finding any qualified candidates. So the position remained open for an entire year.
Frustrated with not being able to find the talent that the 29-person, largely commercial lines agency needed, Jonathan discussed the situation with industry consultant Virginia Bates who provides advice to the Owens Group on an ongoing basis. Through VMB Associates, Inc., her Melrose, Massachusetts-based consulting practice, Virginia offers management, technology and marketing strategies to agencies, brokerages and carriers. In the Owens Group case, she recommended that the agency create an official trainee position. In effect the agency would "grow its own" talent.
Virginia acknowledges that creating a trainee position isn't feasible for every agency. "The agency needs to have a firm financial footing to be able to afford it without hurting the bottom line." That translates to having at least $125,000 revenue per employee--including principals and producers--and a minimum of 15 employees. "Remember," she counsels, "the trainee position isn't meant to be productive; it's not meant to be income handling or generating for six to eight months. This position, at least initially, is
"This person isn't a helper, an assistant or a go-fer," she emphasizes. "The trainee position is where we bring people in and do nothing but teach them. It's a permanent position that you know is going to turn over as you take people out of it and put them at a desk. The trainee position is the agency farm team. We've taught them the right way to analyze a contract, the right way to deal with an insurance company, the right way to sell and the right way to answer the phone." The trainee position enables the agency to create the people that they'll "hire" for other jobs within their own organization, rather than relying on the marketplace to create people--because the marketplace isn't doing that.
Why isn't there the talent in the marketplace that there once was? Virginia offers this insight: "About 15 years ago, at the beginning of the soft market, the first thing to go was the training programs. The insurance industry forgot that we needed to recruit people into our industry and then do something with them when they came. So while people are retiring and leaving the industry, we haven't been building the next generation."
The idea of creating an official trainee position appealed to Jonathan. He liked the idea of no longer having to depend on a job market that he viewed as void of experienced insurance people. "We don't mind paying for a well-qualified person, but the people we were finding weren't well-qualified," he recalls. He began putting into practice the maxim "hire for attitude, train for skills." The agency hired its first trainee in late 2001. Unfortunately, the individual wasn't a good fit and left after about six weeks. The next trainee the agency hired has worked out well, Jonathan reports. So well, in fact, that he's been moved into that long-open commercial lines contact account executive position. And on one of his first prospect visits he walked out with a broker of record letter. "They don't all work out that well," Jonathan remembers telling the rookie.
Recently, Owens Group advertised for a trainee in the New York Times. The agency received 380 responses during the week that the ad ran. As of mid-July, the agency had hired two more trainees and expected to hire the third trainee in the not-too-distant future. Jonathan says that condensing the 380 responses down to the final three candidates depended in part on geography--he immediately disqualified those who would have to travel an unreasonable distance. In addition, he preferred those candidates with liberal arts degrees to those with computer science degrees. "You know the only reason the computer people are applying is because they can't get a computer science job right now," he says.
"What we're finding with the trainees is they have a lot of enthusiasm," Jonathan says. "So even if they lack specific insurance knowledge, they make up for that with their enthusiasm." (Having trainees on staff also encourages veteran staff people to fill in their knowledge gaps, Virginia adds.) "The bar here keeps being raised," Jonathan continues. "We want people who constantly strive to improve themselves. The inexperienced people tend to want to do that quickly."
Jonathan oversees the progress of the trainees, although everyone in the commercial lines department is charged with assisting in the development of these fledgling insurance professionals. In fact, each commercial lines account executive's performance review is partially dependent on his or her participation in the training efforts. Jonathan acknowledges that it takes longer to show someone how to do something than to do it oneself but "we were all new once," he counsels, and in the long run, "there will be more bodies here to do the work."
Prior to bringing the trainees on board, Jonathan developed a training matrix, a tool that Virginia conceptualizes for her clients, but one that she insists they develop themselves. "It takes a lot of work to create a matrix," she explains. "But it's important for the manager to understand everything the staff needs to know. It makes managers much more knowledgeable and respectful of the effort it takes to learn. It also makes them appreciate their people more."
So Jonathan set about creating a chart of all the job functions and tasks that a commercial lines technical account executive and a commercial lines contact account executive must know to do that job well. Owens Group's training matrix names the task, the training method, the testing method, the starting date, the completion date.
Jonathan says a trainee's day includes learning how to use the computer system as detailed on the training matrix--how to create invoices using correct activity codes, how to send out submissions for quotation, how to enter detail on the computer system, how to enter phone calls as activities into the computer--in addition to studying the basics of insurance from CD-ROMs. And before long, there will be a licensing school. And from there he'll encourage them to pursue CPCU and CISR designations.
And even though a trainee may receive the initial training in the commercial lines department, he or she isn't necessarily guaranteed a spot in that department. Jonathan points out that the trainee is hired to work for Owens Group and should an opening occur in the life department or the personal lines department, the trainee would be assigned there. "The skill is similar, irrespective of the department," he says. "You still need a license; you still need to do the items on the computer. Once you know the basics, the trainee is 75% ready to go to any department.
"We're 'hiring for attitude, and training for skills.' It's easier to pick up the skill than to pick up attitude or the learning ability. The trainee position is a long-term solution," Jonathan says. "If this works, we'll have to keep our farm team going. It will be better than trying to get experienced people. The ones we 'grow' ourselves will be better trained on our procedures and they'll have the right attitude."
Virginia says that the training matrix can be an overview of every function and task in the agency. Each department then highlights those functions and tasks that are relevant. The matrix can also serve as a cross-training tool. Increasing numbers of agencies are requiring that their personal lines people familiarize themselves with life and individual benefits programs so they'll be better equipped to round the personal lines accounts into those lines of business. As a result, they give referrals to their benefits people more often and the leads are better qualified if the personal lines people, who handle primarily P-C lines of coverage, understand the life/benefits products well enough to know who's a good candidate.
The lesson? "People shouldn't get myopic and departmentalized about learning and skills," Virginia emphasizes. "People need to know what their colleagues are doing in order to be helpful to them. The best way to do that is to study those other jobs."
The training matrix that Virginia recommends is useful to agencies of all sizes. She suggests that the training process actually tie in with each year's performance reviews. "We have to be specific about what you need to know, how you're going to learn it and the deadline by which you've got to know it. Then somebody has to follow up. And your compensation has to be keyed at least in part to whether you did that." The training process for the coming year should be defined for each individual in the agency, and that training process should fall into
(1) Straight insurance skills. Knowledge of policy forms and relevant laws within the state(s) where the business handled falls.
(2) Technology training. How to use the tools within the office to get the job done. Do you know how to document so that the documentation will hold up in court later? How do you use the company Web sites, and how do you navigate them to find billing information or information about company-specific coverage forms?
(3) So-called soft skills or communication skills. How do you negotiate placements? How do you deliver bad news to a client? How do you handle a disputable claim or a claim that was settled in a way that you feel should have been handled differently from a company standpoint? What are the referral channels within the office to work with someone who's not operating according to your standards?
Virginia says a self-directed training model such as the matrix, supported by a regular performance review, is an ideal combination. "We've put the onus on people to learn, but we also need to list for them what they need to learn." So the agency maintains a chart of all the things a knowledgeable insurance person should know. This can be 50-60 items. The list can be tailored for the department or the type of work the person is doing. However, there is a management commitment. "It makes people accountable," she observes. "Too often we don't expect people to be accountable. We either expect them to do what we say without question or we expect them to know it by some form of osmosis."
Training by degrees
The Flanders Group of Pittsford, New York, took the concept of growing its own talent to a different dimension when the 23-person, almost exclusively commercial lines agency established The College of Flanders in January 2002. The catalyst for creating the college was frustration, according to Valarie Webster, executive director of agency relations for The Flanders Group.
Given the agency's unique business plan of targeting six niches and then serving those niches expertly, the Flanders Group staff must be experts in those niches themselves. (The niches are: real estate owners and managers; marinas and recreational boat sales and service; nurseries and landscape services, horticulture/floriculture; automobile and recreational vehicle dealers; and machine shops and metal manufacturing.) The CE classes that the staff attended were--understandably--general and broad. So while the staff people did come away from their CE class experiences with a few nuggets of information, Valarie says the classes weren't specific enough for what the Flanders staff needed to excel in their jobs. "We're careful about monitoring ourselves--examining what we're doing and why we're doing it," she points out. "That ongoing evaluation led me to understand that there was a piece that was missing."
So to supplement those CE classes that are required to maintain the New York state insurance license, Valarie identified topics that would enhance the skills of everyone in the agency and developed an extensive in-house program based on those topics. (See sidebar on page 108.) "Our corporate philosophy is strong," Valarie explains. "Our employees know all the things that we expect and that we need them to do. We want to be proactive, so we give them the training to help them develop the skills to do what we expect."
The goal of The College of Flanders (CF) leaves no doubt that participants will be given every opportunity to expand their skill sets. In short, the goal of CF is "... to broaden the knowledge base of every employee while helping each member understand the scope of the entire operation of the agency ..." By giving people insight into other areas of the agency, they're gaining a more global view of what happens there, and that means the customer is better served.
Valarie describes the 45-minute sessions as "meaty" and says one of the challenges in developing the curriculum is whittling down the information to be presented so there's time for questions and discussion. She enlists the instructors and asks that they provide handouts for the participants. The handouts are especially important for people who don't perform certain tasks every day. Valarie has discovered that the handouts have additional benefits beyond what the participants gain. "We're building a tremendous employee training tool," she says.
The classes run from 12:30 p.m. to 1:15. The lunch hour is noon to 1 p.m., so there's time for errands before class. Valarie says the participants prefer meeting at lunchtime, rather than coming in early or staying after work. Participation, though, isn't required. "However," Valarie says, "anyone who works here understands how important education is to the well-being of the agency." And while participation isn't mandatory, it is counted toward bonus points on the agency's point-based performance assessment system. "It's primarily because we need people to understand if you want to be a link in the chain, you have to be a strong link in the chain."
The CF faculty is made up of both staff experts and outside experts. Some of the in-house experts come to the lectern somewhat reluctantly, but the benefits of their doing so are far-reaching. One of the agency's in-house experts was somewhat of a well-kept secret before she presented her sessions on Microsoft Access, Excel and PowerPoint. Now she's the "go-to" person for anyone with an Access, Excel or PowerPoint question. "The instructors really get to shine and demonstrate their talents and knowledge," Valarie says.
As Valarie noted earlier,
The Flanders Group is always monitoring itself. And so it is with The College of Flanders. "I see us going to the next level with some of the classes," she explains. "And I envision our expanding the certification tracks. Ultimately, what helps me build the curriculum is determining what's an issue for our clients and then deciding how we can meet that need." *
"If you want to be a link in the chain, you have to be a strong link in the chain."
--Valarie Webster The Flanders Group Pittsford, New York
|* Client Relations||5||hours|
|* Underwriting||5||hours each for commercial lines and safety group|
|* Liberal Arts||3||hours|
|* Core Competencies||8||hours|
Some of the 19 topics presented in the first semester that ended in May 2002, were:
Communication "Building dynamic, productive relationships with co-workers and management" facilitated by consultant Penny Ciaburri
Sales "Monthly sales meetings" facilitated by consultant Roger Sitkins
Client Relations "Switcheroo: How to anticipate client needs" facilitated by Penny Ciaburri
Underwriting-Safety Group "Experience modification factors" facilitated by Cumberland Consulting
Liberal Arts "Understanding the client ledger screen" facilitated by in-house expert Carol Morse
Core Competencies "Completely absorbing and exemplifying The Flanders Group culture" facilitated by Penny Ciaburri
Technology "How to complete ACORD applications in Sagitta" facilitated by in-house expert Mike Pollack
In July, The College of Flanders presented its first bachelor's degree.