Question for agency owners/brokers re: agent pay

[KimFBQCareers]

Just curious, how are you choosing to structure pay for new agents? Do you go old school and do the whole draw against future commission thing, or are you paying a salary? I'm asking because we are looking at our own business model going forward and trying to decide if we want to change things up. Currently, we pay new agents a salary until they build a book and can survive, but as many of you know, that's not an inexpensive proposition. I am just interested in your thoughts.

 

[JeremySoper]

Hi Kim. If you are looking for ideas, I have successfully employed in several models. My most successful model is a base salary with commission. The commission is not at the same percentage that a commission only based model would be, but having the consistent base allows employees to have a sense of security. In the models that were only commission I felt more motivated to succeed, but of course the stress comes along with it. On the other hand, giving employees a base can cause some to not be as motivated to get sales, having strong goals in place under this model is a necessity.

 

[KimFBQCareers]

Thanks Jeremy. How does that affect the overall commission structure? Is it permanent, or only until they can self sustain?

 

[JeremySoper]

In my particular case I was under the call center model, we provided marketing at no cost so we keep the lower commission permanent. If they are responsible for marketing you may want to consider it as a temporary option to sustain motivation.

 

[KimFBQCareers]

Thanks for the input!

 

[BADTROUT]

We did a radical change about 4 years ago... We shifted to CSR selling model for referrals and inbound leads/calls. They get minimum wage + $1 then after we license them (within 60 days), we add .50 for each of the 4 licenses (mandatory) SO if the minimum is $10 we would start at $11, then after getting all 4 licenses they would move to $13. Then each year on their anniversary they get a $1 raise... even if its 5 or 10 or 20 years, it should remain relative. Keeps them engaged.

For a true producer we pay 75% new and renewal for year 1, then year two it goes to 70%, decreasing 5% each year until they are at 50/50 in perpetuity. For the record there is zero ownership in their book)