For years, high employee turnover in insurance agencies has plagued organizations of all sizes, from national insurers to local brokerages. Much of the discussions around turnover at insurance companies center around brokers and agents.
While there is no question that both of these professions experience high turnover rates, the quit rate among customer service representatives in the insurance industry is even more alarming.
According to Forbes, recruiting, onboarding, and training a customer service representative can cost approximately six to nine months of that individual’s salary.
This means that every single CSR that leaves could cost your business tens of thousands in training and onboarding expenses, not to mention the difficult-to-calculate revenue losses you would experience due to subpar customer service.
When CSR positions remain vacant, producers like your insurance brokers and agents often have to pick up the slack. They have to shift their focus from making sales and instead perform various back-end work.
Fortunately, there are strategies you can use to address turnover at your insurance agency effectively. This involves first understanding more about the insurance turnover epidemic.
The Insurance Turnover Epidemic
The insurance turnover epidemic is far more widespread than you realized. It is not a problem unique to your insurance agency or even your market. Employee turnover in insurance agencies is a national problem that negatively impacts companies and policyholders from coast to coast.
While focusing on reducing turnover among insurance CSRs is vital, taking a closer look at insurance broker and agent turnover rates is also essential. This is because attrition among both groups is connected.
By implementing specific best practices, you can not only reduce CSR turnover but also mitigate attrition among producers as well.
Here is what you need to know about CSR and insurance broker turnover trends.
Insurance Broker/Agent Turnover Trends
Historically, turnover in the finance and insurance sector has teetered around 20%. However, according to Zippia, these sectors have consistently been above the 20% turnover rate year after year since 2016. In 2020, turnover peaked at 25%.
When agent and broker turnover is examined apart from the industry as a whole, turnover figures are even more concerning.
According to some estimates, approximately 30% of new insurance agents quit within three months. By the three-year mark, 87% of agents have either moved on to another company or left the industry altogether.
Retaining skilled, experienced agents is a challenge all its own. But as you have probably experienced firsthand, keeping customer service representatives on the team is even more difficult.
CSR Turnover Rates
Statistics for attrition rates for insurance customer service representatives take a lot of work to come by. However, you can draw a few inferences about rates among these professionals by using a few statistics about related fields.
For instance, while the statistic from Zippia reveals that CSRs probably experience a turnover of at least 25%, other statistics about turnover among call center personnel suggest that insurance CSR attrition might be as high as 30-45%.
Using those figures, you can examine your agency’s turnover cost. For example, suppose that you employ 10 CSRs and experience a turnover rate of 30%, which means that 3 of your team members will quit this year. Each of these individuals was paid a salary of $50,000 per year.
According to the previously referenced Forbes article, replacing each individual will cost you about six to nine months of their annual salaries. If your recruiting, training, and onboarding costs equate to six months of each person’s salary, then 30% CSR turnover would cost your business a total of $75,000.
Common Causes of Turnover at Insurance Companies
Turnover can be incredibly detrimental to your bottom line. It will also negatively impact the performance of other CSRs and producers. Most importantly, high turnover rates will diminish the customer experience and potentially damage your brand reputation.
While many factors fuel employee turnover at insurance agencies, three of the most influential include:
High Levels of Stress
Some employees thrive under pressure. When your top performers feel like they are in the hot seat, they will rise to the occasion, up their productivity, and deliver for your business. However, even the most well-rounded employees will start feeling the effects of prolonged exposure to high stress.
According to The American Institute of Stress (AIS), approximately one million American employees miss work every day to escape workplace stress. The AIS also reports that 25% of Americans consider their job the top stress source in their lives.
Stress-related absenteeism is a precursor to stress-induced turnover. If your employees are pushed to their limits too often, they will likely seek new job opportunities elsewhere.
A Lack of Support and Resources
Another factor contributing to insurance CSR turnover is the need for adequate support. Employees must be put in a position to succeed. This means providing them with the resources, support, and tools needed to thrive in their assigned role.
You can apply this to your organization by reviewing what technologies and resources you provide to your team members. Do they have comfortable chairs, quality equipment, and modern software? Or are they expected to compete with major corporations using outdated tech and subpar equipment?
Poor Management Practices
Working in the customer service sector can be incredibly stressful. While some of this stress is unavoidable, you and your leadership team must do your best to mitigate it as much as possible.
Modern employees are more conscious of mental health, work/life balance, and the importance of positive employee/manager relationships. According to the American Psychological Association, 81% of workers agree that “how employers support mental health” will influence their decisions when looking for future work.
Today’s employees are less tolerant of poor management practices. They will actively avoid organizations with reputations for employing bad leaders but gravitate toward companies with exceptional management structures.
7 Strategies for Reducing Employee Turnover in Insurance Agencies
Once you understand some of the most common causes of employee turnover in insurance agencies, you can shift your focus to reducing attrition within your organization.
If you want to keep employee turnover from running rampant in your insurance agency, try implementing these seven strategies:
1. Provide Effective Training and Onboarding
According to Zippia, new hires are 69% more likely to stick with your business for at least three years if you provide a great onboarding experience. During recruiting and onboarding, new employees will be introduced to your company culture and, hopefully, be equipped with the tools they need to be successful.
If you get onboarding right, you set the stage for a long and productive relationship with your new team members.
On that note, make sure to evaluate your current onboarding practices. Are they seamless, positive, and efficient? If not, it may be time to rethink how you recruit, train, hire, and incorporate new staff members into your insurance company.
2. Create a Positive Work Environment
Negativity is a plague that can permeate a workplace, influence team members’ perceptions, decrease productivity, and fuel high attrition. Therefore, you must proactively foster a positive work environment founded on mutual respect, trust, transparency, and equity.
You should also remove sources of unnecessary stress to protect the positive environment you have cultivated. During a workplace stress survey, the American Psychological Association asked respondents what factors significantly impact their stress levels. Some of the most common responses included:
- Low salaries (56%)
- Too heavy of a workload (50%)
- Unrealistic job expectations (48%)
Addressing these sources of stress will help you promote workplace positivity and reduce attrition rates.
3. Offer Growth and Development Opportunities
According to a Gallup poll, 87% of millennial workers consider development opportunities necessary. The poll revealed that other generations of workers also value growth and development opportunities.
Providing your CSRs with the chance to learn new skills is an excellent way of improving retention. It will also increase their value to your organization, as they will be more productive and capable employees.
4. Hire More Resources
Bringing in additional resources can help prevent your existing staff from feeling overwhelmed. However, hiring from the traditional employment pool can be challenging, especially amid a historic talent shortage.
Fortunately, there are alternatives to the traditional approach to hiring. For instance, consider hiring full-time remote offshore team members. Using this strategy can help you fill critical vacancies quickly while reducing costs.
You can unlock these benefits by outsourcing everything from training to onboarding and even payroll to a third-party talent management team that will provide you with full-time CSRs.
To explore some options, you can start by looking into Edge as your partner in hiring full-time, qualified, and trained CSRs. Not only is Edge a bridge between insurance firms in the U.S. and globally sourced employees, Edge also provides their clients with a complete HR ecosystem, including payroll, benefits, IT, infrastructure, and dedicated client success managers.
5. Implement Effective Recognition Programs
Recognition programs are a great way of demonstrating appreciation for your valued staff. These programs are also cost-effective, so you can use them to combat turnover when offering better pay or benefits is not an economically viable option for your business.
Implementing an employee recognition program can boost staff engagement by up to 400% and decrease feelings of burnout. Employee recognition initiatives can also increase job satisfaction, raise productivity, and help your team members feel more connected to the brand.
6. Be Proactive About Performance Management
Performance management involves tracking the productivity of your staff, providing them with meaningful feedback, and working with them to help them thrive within the organization.
Chances are that your organization probably already provides at least some type of performance management in the form of an annual review. However, many employees report that they want more frequent feedback.
So, how can you provide this? First, you will need to implement a more advanced performance tracking system to obtain quantifiable data about the productivity of each staff member.
Next, review this data with your team members at regular intervals, such as once per month or quarterly. Make sure to gather feedback from them and make the conversation about the employee and their goals.
7. Modernize Your CRM Software
Managing customer relationships is a critical component of the insurance industry. Developing, maintaining, and nurturing these relationships is also a time-consuming and labor-intensive process — at least, it used to be.
Modern customer relationship management (CRM) software can streamline how your CSRs and agents interact with customers. The best solutions include powerful automation tools enabling your CSRs to get more done, reduce their workload, and better serve your clients.
If you are not using a CRM solution or are relying on an old-school one, it is well past time for an upgrade. Investing in cutting-edge CRM software will work wonders for team morale and help keep employee attrition from getting out of control.
Insurance Workers Need Support — Make Sure to Provide It
Resolving staffing shortages in insurance agencies requires a multifaceted approach. There are likely multiple factors that are contributing to the turnover rates within your insurance firm. That is why you must systematically address them using the best practices and strategies.
Reducing turnover among customer service representatives and other support staff will create a trickle-down effect that benefits your entire organization. When there is stability at the CSR level, revenue producers like insurance agents and brokers can focus more on selling policies and building customer relationships.
The question is, what is the best place to start addressing employee turnover in insurance agencies? The first step involves assessing turnover rates at your insurance agency.
You need to find out which team members are leaving and why. You can get to the heart of the issue by proactively gathering feedback from outbound employees during an exit interview.
From there, start implementing established best practices to improve the employee experience, reduce attrition rates, and retain top talent. Your turnover challenges took time to arise, which means remedying them will be a process. But it is one that you can successfully navigate by putting the right tools and resources in place.
