How One Agency Wins The Retention Battle

"We've picked up about 50-60% of those interns as associates," he says.

Maxwell notes that the screening for interns is just as selective. "In a 3-month period, I reviewed 126 resum?s, interviewed 67 candidates, and out of all those, there were 5 intern hires," she says.

Toland believes that retention levels can eventually go to 85-90%, because of that 12-week look at the candidate by the management team and other associates.

But a thorough screening process is only the first step in successful retention at Savage and Associates.

"As soon as a person comes here, they are given somebody to be their mentor–not somebody in management, but somebody who is a major producer," says Bob Savage.

"It gives them someone who will tuck them under their wing and meet with them on a regular basis," he says.

New associates work with their mentor developing a budget worksheet, a balance sheet, and a marketing plan–all of which they are held accountable to on a weekly basis by their mentor, says Toland.

"We think that's crucial to getting off to a good start and crucial to becoming financially independent, like they're trying to counsel their clients to do," says Toland.

Steinberg says that one of the differences at Savage and Associates is that there is a lot of attention placed on helping out new associates. "You hear about a lot of other bigger shops where it's more focused on the senior agents, and the junior agents try to help out–maybe they survive and become a senior agent," he says.

"That seems to be a different culture than what we do," he continues. "I think the way we nurture and coddle our young people is probably a big part of why they have a very good chance of succeeding over time."

This culture of helping the new associates has created a fairly uncommon practice at Savage and Associates. New associates do not split their commissions on joint business done with any senior producers during their first 2 years with the firm.

"Just by nature we thought we should help," says Savage. "Usually the senior person's income is far better than the neophyte, therefore we let them have the advantage of the income–that has just developed into our way of doing business," he says.

Toland explains that if you're in a mentor role, you should have your own business going on, you shouldn't be splitting hairs with a new associate. "These guys don't forget where they came from, they were helped on their way into the business," he says.

The first two years for a new agent at Savage and Associates is spent in the bullpen doing on-the-job training, says Toland. "That's training at its best, when you take somebody and make sales with them–you help put money in their pocket," he says.

"Our goal is that by their second full year they should grow out of the bullpen," says Toland.

Last year's average income for the bullpen was around $45,000, says Toland. But new associates in their first year should only expect to earn about $15,000.

"We tell a young person coming out of school if they make $15,000 their first year and they do the things that we tell them to do from an activity standpoint, that's excellent," says Steinberg.

"If they make $25,000 but they do it all on one case, then we're still going to be very worried about them," he says.

Asked how a college graduate can settle for such a low first-year income, when corporate America will likely pay more than twice that in their first year, Toland admits, "We did lose some good prospects to corporate America."

But Steinberg explains that candidates need to take a different perspective on this type of career. "For someone coming out of school we tell them that their first 2-5 years is their internship or apprenticeship–like going to medical school or law school, and you're going to be underpaid for a college graduate degree," he says. "But by the time you're 30 you're going to be making 2 or 3 times what your peers are making in the regular corporate world."

"We just want to be realistic," says Toland. "We don't put any ceiling on it, but 30 years of experience tells us that if you make $15,000 to $20,000 you're doing a good job. We try to shorten that curve as much as possible," he says.

Reflecting on his agency's formula, Bob Savage says, "We've been able to help big percentages of them make it, and that's from the collective environment here."

Reproduced from National Underwriter Life & Health/Financial Services Edition, March 18, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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