What Every Agency Should Do to Prepare for Employee Retirements

September 9, 2020

It is common knowledge that insurance agencies and the whole industry face a massive wave of retirements. Many of these employees are leaving after 30 or more years serving an agency and building relationships with clients. Not only does this mean that a significant amount of knowledge is retiring out of the industry, but it can also leave client relationships in jeopardy when this person was a key contact for the insured.   

And while there is no way to replace long-term experience, service, and friendships that an employee built, there are ways for agencies to prepare for their departure.

Be Proactive

While it may seem easier in the moment to bury your head in the sand and pretend one of the agency’s most prized employees is not going anywhere, this type of mindset will not help anyone. Once an employee expresses a desire to start working towards retirement, it is time for the agency to start planning to accommodate this.  

  • Ensure that you are clear on the employee’s plans, including the final day of work. This information will tell you how much time you have to start searching for and hiring their replacement.
  • Get a full understanding of the particulars of an employee’s book. Whether they are in a sales or service role, a long-term employee of the agency has a valuable relationship with clients. They may even be the reason clients have stayed. Understanding the full scope of the relationships within the book they work with is critical to knowing client expectations in the future.
  • Hire the replacement employee with plenty of lead time. Bringing in a new employee in advance allows overlap between when the current employee retires, and the new employee steps into the role, which will be a significant factor from onboarding, training, and transition standpoint. The new employee may need time to learn insurance in general if they are new to the industry. 
  • If they have insurance experience, they will still need time to learn workflows, the nuances of specific accounts, and a chance to get to know clients. Providing time for the current and new employee to co-manage accounts will provide clients the necessary reassurance and make the transition much smoother.

Be Transparent 

Employee retirements are not specific to the insurance industry, and businesses of all kinds are experiencing the same loss each day, just like your agency. Attempting to avoid the subject with clients does a disservice to them, the retiring employee and the agency. Chances are if the employee has a long-term working relationship with the client, the question of eventual retirement may have already come up in conversation. Just as insurance agents want a heads up when a client is transitioning from one key person to another, you now owe that same courtesy in return.   

Be honest and communicate with the client about the timeline, the transition plan, and introduce the new service person. Open communication will allow everyone a chance to work collectively and get familiar with one another and avoid disruptions down the road.   

It is understandably difficult to watch a good employee leave the industry for the next phase of life. However, using these steps will help position the new employee and the agency to pick up where they left off and continue building on their predecessor’s successes.

For more on this topic, check out the full episode of The Independent Agent below.