HELP. What to Pay Employee?

[Nj.agent]

Hello,
Have a start-up agency, what should I pay employee.
Business is slow due to being a start up, but employee will be answering phones, and selling personal auto, owner will sell commercial auto for now.
*What is the commission for new policies sold and renewal?
*What is reasonable pay for taking a customers info down, if its not busy enough for an hourly pay?

All feedback will be helpful,
Thank you.

Nikitas Kasiotis
Argos Insurance Group, LLC.
Tel: 1-888-612-9990

Personal and Commercial Auto

 

[AdvisorsIns]

Hello, Have a start-up agency, what should I pay employee. Business is slow due to being a start up, but employee will be answering phones, and selling personal auto, owner will sell commercial auto for now. *What is the commission for new policies sold and renewal? *What is reasonable pay for taking a customers info down, if its not busy enough for an hourly pay? All feedback will be helpful, Thank you. Nikitas Kasiotis Argos Insurance Group, LLC. Tel: 1-888-612-9990 Personal and Commercial Auto

I guess this depends on if you are providing a salary or hourly. If it is just straight commission I would say at least 60% on new and 40 renewal. They are still going to have a tough time making ends meet unless they are just killing it. Would you be providing leads or they would have to generate those as well.

 

[Nj.agent]

Thank you,
I would provide leads., cold calling will be done in the future.

Employee would get 60% of profit? More than me?

Thank you again.


Nikitas Kasiotis
President / CEO

Argos Insurance Group, LLC.
Tel: 1-888-612-9990
Personal and Commercial Auto Insurance
NJ & NY

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It would be straight commission, unless I were to pay her for deals we didn't sell and she collected the information than that would be a flat rate?

It's not busy enough yet for hourly.

 

[Igozoom]

You also need to be sure that you are in compliance with State & Federal laws regarding wages and how the employee is classified (hourly, salaried-exempt or salaried-non-exempt).

The only way you can legally pay on a strictly commission-basis is if the employee is a legitimate "outside salesperson". Anyone who answers phones or even has an assigned work space or required in-office hours doesn't qualify as "outside" sales. You would be required to at least minimum wage (which is $8 in NY) plus 1.5x for anything over 40 hours.

As for commission split for an outside salesperson, if you were providing the leads, I'd say 50% on New business. As for renewals, if the salesperson will be responsible for servicing the account during the policy period (instead of an in-office CSR), 40% (or slighlty more) is only fair. If you eventually hire someone to service the policies, then 25% for renewals would be adequate.

I would highly recommened paying a small draw against commission, at least for the first year, to a salesperson working on a 100% commission basis. Most agencies offer at least $200/week or so, then take it out of future commissions once they are paid. Otherwise, anyone you hire will quit after a month or two with no cash flow.

 

[Nj.agent]

Thank you, very helpful!