Give Me Stability

There was one time when a low base salary coupled with the opportunity for generous commissions was an appealing option for someone just starting out in the work force. Those days, for the most part, are over. The American psyche has changed. Now, stability is valued over opportunity. Students set to graduate this spring will have spent their entire college career in the shadow of the financial crisis that began in 2008. They have seen parents, older siblings and friends laid off, they have watched what appeared to them at one point to be venerable institutions crumble, and they have seen things progress and regress all while recovery happens in fits and starts.

The sputtering economy seems to them to be perpetually infirm; the old car that you drive everyday never knowing when it will break down. They see their families tightening the belt. Some may have even had to take out student loans to help their families adjust. Members of the class of ‘12 that I have talked to all view a career with a low base pay and high commissions dubiously. If their livelihood depends on them selling life insurance to a marketplace where people are cutting back on basics, even if they are the all-time greatest salesman, they are going to have a very hard time.

I recently spoke to one current student slated to graduate this spring from a private university in Philadelphia about why he turned down an opportunity with a major life insurer that offers different compensation programs in order to accommodate the different needs on individuals entering into their three year financing program. Unfortunately I was not able to get any numbers from this insurer in order to compare with the figure I was given from the student. He told me that all three options—traditional full commission + bonus opportunities, traditional base pay + reduced commission and retirement benefit group salary with bonus opportunities—were not viable options for him. He was looking into the traditional base pay with reduced commission option and said that when taking into account paying for fees to take the required exams as well the necessary study materials on his own it was not going to work. He is living in New Jersey; if he elected to take the position, the figure quoted to him would only be $320 a month over what would qualify him for welfare.

I am sure that for other big life insurance firms across the country the numbers are similar. When the paradigm shifts in America, the ones who adapt are the ones who survive. Austerity, for all intents and purposes, is the new black and companies spanning myriad industries have taken notice. The life insurance industry should devote resources to studying what this new generation values, what they consider enticing when they are looking for employment and what type of incentives would not only get them to sign with company but also to sell. The old model may not work anymore in these new times and an industry that desperately needs an injection of youth may be left in the dust if it does not re-examine the it compensates its work force of tomorrow.