Four Ways To Measure Employee Value
By, Tom Sukay
‘Valued Employee’ is a phrase that comes up all the time. I know I’ve said it and I’m sure you’ve said it too. A lot of the time, it’s used as a shorthand way of saying you’re happy with an employee’s work. When you break the phrase down though, we may need to rethink how we use it.
When you include the word ‘value’ in your description, whether you thought about it or not, you imply that the employee adds value to the agency. The question is, how do you measure employee value?
The most obvious way to measure the value of an employee is to look at revenue. How much business is the employee bringing in to the business? How much revenue is that business generating? It may be overly simplistic to assume that the highest revenue generators are your best employees. It is possible to generate a lot of revenue from a single account, which means it’s possible to get lucky and manage a big account that takes minimal effort to maintain. Meanwhile, another employee may have ten accounts that generate a slightly smaller amount of total revenue.
On that basis, it may be better to use time to measure employee value. The employee who’s first in and last out every day is naturally going to offer some value. That’s assuming their time is actually valuable. We’ve all known insurance salespeople who always seem to be busy but never seem to get any work done. Just being in the building doesn’t mean you’re generating revenue or being productive.
This brings us to another question. How do you separate the time-wasters from the valued employees? It may come down to the expertise that they provide to the agency. Expert knowledge of risk, insurance, industry or all three is a vital commodity for insurance agents. If your staff can walk into a potential client’s office and communicate their understanding of the prospect’s needs effectively, they have a great chance of getting that account. The more experts you have, the more value your agency can provide.
However, there are plenty of occasions when expertise isn’t enough. To be truly successful in selling insurance, you need to build an effective network of contacts. It should include insurance providers, industry experts and of course, prospective clients. In order to make effective use of their knowledge, your employees have to be able to build that network. It may be that the employee with the most contacts provides the most value. It’s also possible to have plenty of contacts, but have little or no expert knowledge.
In truth, none of these factors are effective measures of employee value. In order to be a truly ‘valued employee’, your people need to excel in each of these areas. If you have employees who fail in any or all of these areas, it may be time to reassess their value.
Value can be measured in all sorts of ways, the value of your agency itself can be affected by a number of factors.
As a firm, we believe answering the question “How much is my agency worth?” is part of our responsibility and the foundation of a great working relationship – even if that is further in the future. Because of this we, unlike most firms, offer free insurance agency valuations for those who qualify. Click below to apply.