From an employment perspective, the anemic economic recovery has been a double-edged sword: bad for the millions of U.S. workers who, nearly three years after the 2007-2009 recession, still find themselves without a job; a boon for employers who can now skim more of the cream from the proverbial crop.
The expanded labor pool, sources tell National Underwriter, has been especially welcomed by major life insurers that recruit producers to work in their career agency systems. The greater availability of quality candidates is helping carriers in their efforts to diversify their sales forces, expand into new markets, boost productivity and increase low agent retention rates—for decades the industry’s Achilles Heel.
Recruiting to the Plan
MetLife offers a window into the changes the carriers are implementing to better support customers and producers, and to hire more strategically. MetLife changed its recruiting strategy 18 months ago. In contrast to prior years and recruiting models used by many carriers, the New York-based company now ties recruiting goals to agency sales growth objectives, as measured by premium dollars. If the insurer aims to achieve, say, a 10% gain in sales over the next 12 months, then the company will recruit to a benchmark number based on an expected amount in sales per agent.
“We don’t want to be in the recruitment treadmill business,” says Mike Vietri, executive vice president of individual distribution, at MetLife. “We back into a recruitment objective based on our business goals. This method forces our agencies to focus their efforts on recruiting and retaining higher-quality agents.”
Because the individual MetLife agencies determine their growth objectives, recruitment efforts, and funds available to invest in new hires, results vary widely nationwide. Mature markets may receive funding for fewer agents, whereas markets that offer greater growth potential may benefit from considerably more in funding for agent selection.
This year, says Vietri, MetLife is on target to recruit 1,700 new agents (including 500 for MetLife’s New England Financial channel), about 15% fewer agents, Vietri estimates, than the carrier would have hired under its’ pre-2010 recruitment strategy. Yet MetLife remains on target to achieve sales goals because the company has enjoyed a 30% rise in productivity per advisor over the past two years.
Vietri attributes the gain to not only MetLife’s heightened focus on top-quality candidates, but also beefed up resources for new agent training and development. The company avails producers, for example, of business coaches, training directors, advanced marketing, public relations and product specialists to help hone their sales skills, expertise and go-to-market strategies.
The training isn’t just academic. New MetLife producers, says Vietri, can secure sales leads and do joint field work with veteran producers via the company’s team-selling initiative.
Casting a Wider Net
While enhancing the caliber of its career agents, MetLife is also seeking a more diverse workforce. The company targets promising candidates who are culturally attuned to America’s varied ethnic groups: African-Americans, Asian-Americans and a fast growing Latino population, the last of which the 2010 U.S. Census pegged at 50.5 million or 16% of the total population.
(Between 2000 and 2010, the Hispanic population grew by 43%, rising from 35.3 million in 2000, when this group made up 13% of the population. By contrast, the non-Hispanic population grew by about 5%, according to the U.S. Census.)
To reach the various ethnic groups, MetLife employs advisory councils composed of elite producers who can offer, among other things, guidance on culturally attuned sales practices and recruiting methods. The company also supports agents serving these markets with resources the agents depend on to close the sale, including product literature, underwriters and call center support people who speak the languages of client prospects.
“We can recruit agents to work in the Latino market, says Vietri. “But unless we have the culturally sensitive infrastructure in place to support them, they won’t stay long.”
Chris Mendoza couldn’t agree more. An assistant vice president of multicultural market development of the Life Company Marketing Division at MassMutual, Springfield, Mass., Mendoza is spearheading an effort to diversify the insurer’s sales force: and the initiative is showing marked results: since 2007, says Mendoza, MassMutual has doubled the number of ethnic producers who are career agents. In all, MassMutual boasts 5,000-plus producers across more than 80 general agencies nationwide.
Aiding MassMutual in its multicultural recruitment drive are “affinity groups” via which the company connects with candidates in the African-American, Hispanic/Latino, Chinese, Korean, and Asian-Indian communities. Among the groups: the Association of Latino Professionals in Finance and Accounting, the National Society of Hispanic MBAs, the National Black MBA Association and the National Association of Korean CPAs.
To be sure, MassMutual isn’t only targeting people with backgrounds in finance, business or sales. Many of the company’s new hires—and most successful producers and managers—hail from a range of other fields, including (notably within the Chinese community) the medical profession.
As one example, Mendoza cites Emily Dong, a cancer pathologist who received her medical training first in China, then at the University of Illinois/Urbana Medical Center. Dong then transitioned to a career in financial services and is now a leading sales manager who oversees MassMutual’s Chinese-American market in Chicago.
Dong’s background has served her extremely well, exposing her to thousands of people in the Chinese and medical communities in Chicago, says Mendoza.
“What attracted her to the insurance and financial services field is her passion for helping others,” Mendoza adds. “This is a story we often hear from people who come to us from other professions.”
Like other managers and producers who serve America’s myriad ethnic communities, Dong also has insight into rapport-building practices that are unique to these groups. This understanding, says Mendoza, may require adapting a boiler-plate sales technique to cultural norms. The result is often a longer than usual sales cycle, as producers seek to establish trusting relationships with not only the client prospect, but also family members and even extended family.
Assessing Candidates and the Career
Also taking more time than in bygone years is the courtship of agent candidates; and, for the candidates themselves, low-risk opportunities to evaluate the viability of a career in financial services. The carriers with career agencies interviewed by National Underwriter all offer programs that allow new recruits to get trained and work part-time for a fixed period before making a full-time commitment. One among them, Newark, N.J.-based Prudential Financial of Newark, now is spearheading an ambitious effort to recruit all new agents through a part-time work initiative. (See the Producer’s Corner column on p. 40.)
Typical of the endeavors is a Preliminary Employment Program offered by AXA Advisors, an affiliate of AXA Equitable Life Insurance Company, New York. Recruits first obtain a FINRA Series 7 registration and life, accident and health insurance licenses to become authorized to sell products and investments. Thereafter they move into phase one of the “onboarding” program, which provides a training salary while new agents learn about products, operations, technology, compliance and prospecting, plus topics needed to pass the FINRA Series 63 exam.
New hires then shift into a second phase, in which they work with a dedicated manager to develop sales prospects using mentoring, role-playing and hands-on experience. They also build their practices through marketing and sales visits with clients and prospects.
Only after they complete these training and selling phases are recruits eligible to become a financial professional with AXA Advisors and elect a three-year financing program, including full-commission plus bonus opportunities or a base salary and reduced commission.
“We spend a lot of time in our pre-contract phase and that is by design,” says Kelly Esposito, an AXA manager of recruiting operations. “It has given both the company and the candidates more time and information to decide whether or not we are a fit for one another.”
New York Life offers a similar “pre-contract orientation” program in which the company expects to enroll some 3,500 new hires this year. The program content, which typically lasts two to three months and encompasses prospecting, fact-finding, selling, marketing, other facets of practice management, plus products—represents but a portion of the company’s large investment in new producers during their first three years on the job.
Rich Simonetti, a vice president who oversees recruiting and retention at New York Life, pegs the total cost per agent at $350,000, which includes a comprehensive training program and extensive marketing and sales support. Hence, the high priority the company places on attracting and retaining top-tier candidates.
“The ideal agent candidates have a great work ethic and people skills,” says Simonetti. “They also have the analytical skills necessary to simplify and communicate complex ideas. And they’re comfortable being in business for themselves.”
To identify individuals with the right qualities, New York Life uses a range of tools, including the Internet, to acquaint prospects with a career opportunity. But Simonetti observes that while New York Life continues to use web portals like CareerBuilder.com and Monster.com to supply candidates, the insurer is increasingly connecting with prospective new hires via social media sites like Facebook, LinkedIn and Twitter. These portals, he says, are used to “warm up” or prepare prospects—many of them of college age, but also career-switchers—for lengthier discussions about the professional opportunities offline.
Mining the Universities
For Northwestern Mutual Life Insurance Company, college campuses are a primary source of producer candidates for its internship program. Now four decades old, the program lets college students (mainly juniors and seniors) work as agents while pursuing their studies. After graduating, they can continue to work part-time for up to 120 days before committing (assuming there is mutual interest) to a full-time contract.
Cynthia Criss, a director of field recruitment at Northwestern Mutual, Milwaukee, says the program is not limited to the summer, as students work year-round. She adds that Northwestern Mutual is aiming to recruit 2,500 interns this year. Among the targeted prospects: referrals from current Northwestern Mutual reps who have recently graduated; and college athletes.
“We’ve established strong partnership with student athletes nationwide,” says Criss. “They possess many of the same characteristics as our most successful financial reps—an aptitude for sales, discipline, resilience, a strong desire to succeed, and a team spirit.”
(To aid in measuring these qualities, Northwestern Mutual—among other carriers surveyed for this article—employ Career Profile+. A software tool developed by Limra International, Windsor, Conn., the tool collects information about candidates’ work and life experiences, personality, goals, attitudes, and career expectations. The product then, according to Limra, “predicts the likelihood they will be under contract with the company for a full year, with an above average production level.”)
Based on past experience, says Criss, about 25% of the 2,000 open positions for full-time reps will be filled by graduating interns; the balance of positions are taken by career-switchers and recent college grads. In all, about one in three graduating seniors in the internship program convert to full-time work.
Criss, says that students who join Northwestern Mutual through the program stay longer than do other recruits: the four-year agent retention rate among graduating interns is double that of producers hired through traditional channels because the students have been given an opportunity to “test the career.”
Given the disparity in retention rates and the success of the program, why not hire only interns and eliminate the other recruitment channels? Criss says the company has been tempted by the thought, but notes that it still needs to have a diverse balance of age groups who cater to different natural markets.
“We want to have a mix of demographics within our career agency system, in part to help increase sales,” says Criss. “Because the prospects in interns’ natural markets are young like themselves, the [policy] case sizes tend to be smaller. Also, we don’t now have enough field leaders to manage an intern-only recruitment program.”