Finding the right balance for staffing within an agency can be a struggle. Whether an agency is overstaffed or understaffed will impact the organization, and both can cause stress for different reasons. The numbers need to make sense, but looking only at dollars and cents may lead to inaccurate assumptions that bypass the agency’s other needs.

Finding the right balance for staffing within an agency can be a struggle. Here are a few things to consider when deciding if it’s time to hire:

1. Remember Revenue Doesn’t Tell the Whole Story –

Depending on the organization’s set up, there can be a lot of administrative staff who don’t directly contribute to the generation of revenue or the service of those accounts. However, those employees are still critical to the function of the organization. 

Using revenue per employee is much more appropriate to benchmark against other similar organizations and ensure profitability remains within an acceptable range.

2. Consider the Impact on Morale –

There is an appeal from a profitability standpoint to run lean, but it will not always be most beneficial to the agency in the long run. If an agency is understaffed, employees are overworked, or leadership must take on additional tasks to keep workloads in check, morale will quickly deteriorate. When employees experience this type of stress, they are less energetic and productive, and these two things will inhibit the ability to service current clients and bring in new ones.

Continuing to push forward along this path for profitability will eventually lead to unhappy employees who are burned out and leave the organization.

3. Understand the Reality of Time –

The amount of work generated by a book of business will vary based on the type of accounts involved. It is essential to recognize that particular niches or specific accounts are more high maintenance than others. Accounts that require more touches and service will require more time from employees who take care of them.  Also, some tasks take longer than others. Without understanding how long a task should take and how many times that task happens per day is necessary to understand individual workloads. 

4. Consider Alternatives –

The reflex to hire may seem like the most obvious solution when an employee’s workload is rising significantly. However, filling a new position may not always be the right move. Once you can evaluate how an employee divides their time each day, consider these other options before hiring:

  • Shifting workloads – While one employee might be overworked, others may have more time left at the end of the day. Make sure to evaluate all employees who also serve in the same role and consider moving a few accounts to balance things out.
  • Outsourcing – If there is a significant number of accounts generating a high volume of non-client facing tasks, investigate outsourcing as an option. Outsourcing can provide a significant benefit to transfer many behind-the-scenes tasks so that those in the office can focus on work that is most critical to the client relationship.
  • Technology – Whether it is generating certificates of insurance, sending an email, or attaching documents to a client file, all of these tasks should happen with little disruption. If any of these tasks are lagging, the agency may have a technology issue. This problem could include storage issues, connection speed, or old software that can’t keep up. Ensure you understand where tasks might be getting stuck due to technology and look into upgrades to speed these things up.

  • Training – Understanding how quickly a task should happen and how fast an employee is completing it is critical information. Knowing this can help uncover struggles an employee may be experiencing. Identifying those areas where an employee is getting stuck will help identify the training needed to help staff become more efficient.

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Knowing when and if it’s time to hire can be a bit of a mystery. Using the information above, agencies can more clearly evaluate and identify when it’s time to hire!

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

About the Author

Justin Goodman has spent the past 20 years in insurance. He is the co-founder and CEO of Total CSR and co-founder and Managing Director of Project 55. By the age of 29, he was recognized as one of the top five construction insurance experts nationwide by Risk and Insurance Magazine. He also was named to Insurance Business Magazine’s Hot 100 and most recently the 2024 Insurance Journal Agent of the Year. Justin has trained over 50,000 CSR’s, account managers and producers through his work at Total CSR. He has a passion for developing the next generation of insurance professionals. When not with his family, he devotes his free time to speaking engagements and advising agency owners across the country.