Talent retention strategies for high-turnover industries
The insurance industry has long been a prime option for job seekers in the finance industry. The insurance recruiting business often paints a promising career prospect of flexible working hours and high earnings. Such opportunities are particularly enticing especially for fresh graduates and diploma holders. This is because many of such graduates do not carry the relevant working experience that would warrant them positions of high pay. The insurance industry is able to create a path with the hope of achieving that quickly.
However, the claims of attractive salaries can be few and far between. Coupled with this dismal trend is the insurance trade’s high demands, often leading to high turnover rates.
Low Retention Rates and Repercussions
Competition is rife in the insurance industry. This has led to frequent buyouts of promising agents from one company to another. A recent report detailed that some 300 Great Eastern agents were offered $100 million to fill up positions at rival AIA in its firm’s newly set-up Financial Advisory arm. This move is recorded to be the largest one thus far in the insurance scene in Singapore.
Acknowledging such practices in the insurance business, the Monetary Authority of Singapore (MAS) has argued that mass movements like the aforementioned could lead to improper switching of insurance policies. In addition, MAS posits that the stiff competition between insurance agencies could lead to unbecoming sales tactics used by agents to achieve personal sales targets.
Pertaining to claims of high six-figure amounts to agents that join the insurance industry fresh out of university, this is far from what happens in reality. There have been many accounts of such agents averaging lower than expected monthly salaries. Disenchanted, they leave shortly after over a year in the industry. While earnings of six-figure sums are not impossible for a new agent, cases of them happening are very rare.
Perhaps the party most affected by the actions of an agent is the customer. Customers could be stuck with a policy that they have previously bought from an agent that then transferred to another agency or left the insurance trade totally. This leaves such customers hanging, often feeling lost and frustrated over their decision to buy a policy which they now wish to amend.
Turning off the Turnover Tap
Although monetary factors cause a considerable pull towards joining a new agency, there are other factors that contribute towards an agent leaving a firm for another. Arguably, a firm should vie to retain its talents as best as it can. As such, we have identified two areas which, when enacted upon, advocate higher retention rates within a company: team reliance and transparency.
- Team reliance
Many insurance companies function in individual teams where each team may have their own exclusive expertise. These groups then compete against each other, withholding their specific strengths with the aim of outselling opposing teams. While this method of operation pushes teams to outlast and outsell one another, it fosters unhealthy competition within the company itself.
Contrastingly, companies should seek to build inter-team reliance. This can be achieved by means of having a flat organisational structure. This allows for agents to find counsel outside their own teams in areas outside their expertise. Consequently, this builds in agents an added sense of confidence and know-how to serve their clients better.
2. Transparency to Clients
Insurance policies consist of very long and well-detailed documents involving lots of fine print. At times, agents in their bid to gain as much sales as possible to outsell one another may choose to present the terms selectively to their clients. This makes policies seem more favourable than they actually are to clients. When clients eventually discover the actual terms, they are often left feeling cheated by their insurance agents. Therefore, this behaviour has led to a negative air built around insurance agents that they are an unscrupulous bunch out to deceive clients for personal gain.
Reports and anecdotes show that for many agents, their first clients are personal friends and relatives. The above mentioned negative stereotypes may in turn damage the friendships and relationships the agents formed personally outside their scope of work.
Embracing technology is crucial because of the efficiency it brings. Online planners and phone banking applications were once products and services that were done manually and took a considerable amount of time. In the same vein, developing platforms which function to automate the paperwork involved in insurance sales leads to the freeing up of an agent’s time. In turn, this allows agents to pivot their attention towards an important yet mostly ignored trait in sales: professional relationship building.
Does it Really Work?
It is in the best interests of an agency to retain the talents that it already has. A sense of belonging to the company is the sentiment that agencies and companies, alike should vie to evoke from its employees. Correspondingly, it should be the role of those at management levels in agencies to build the infrastructure needed to facilitate this sense of pride in job and co-worker dependence amongst its employees.
Acknowledging that the insurance industry is a cut-throat business, some firms still prioritise fostering a healthy working environment. Our company, for one, can attest to having a thriving business. Nonetheless, it is ultimately up to those at managerial levels to take that plunge and create change.
Poh Choon Kia is the Senior Financial Services Director and Chief Trainer at Infinity Wealth Management.