Paying my Agents

[sharon1900]

Hi,
I have a new agency that I started and I currently have 4 W2 employees who are now coming back asking for a raise.
I pay between $18-20/hour give a complete benefits package and 35% in commission.
Can you please share the common structure in P&C in Los Angeles area?
One of my employees do not get a commission. Instead he gets $700/week and $15 per policy and working only part time (8-2).
I think that I am over paying and would love to hear your input. TIA

 

[BADTROUT]

I overpay, and yours makes me look cheap. Mine is simple...

YEAR 1: The higher of 75% New and renewal... OR Minimum Wage
YEAR 2: The higher of 70% New and renewal... OR Minimum Wage +$1.00
YEAR 3: The higher of 65% New and renewal... OR Minimum Wage +$2.00
YEAR 4: The higher of 60% New and renewal... OR Minimum Wage +$3.00
YEAR 5: The higher of 55% New and renewal... OR Minimum Wage +$4.00
YEAR 6: The higher of 50% New and renewal... OR Minimum Wage +$5.00
YEAR 7: The higher of 45% New and renewal... OR Minimum Wage +$6.00

The rest remains at 45% or Min +$6 (they never get paid hourly, its almost always the commission that pays.

With what you are giving them, I would at least do a higher of the two numbers similar to my structure... But seriously, Give one two weeks off, nice vacation... see how much business you are missing out on because they were not there.

If you notice... Bring em back...

If you do not notice a dip... make that vacation permanent.

I will say you HAVE to treat your producers well, they are building YOUR dream... But let me be very clear as I am with MY producers... They are paid well, yet I take about 99% of the risk in overhead, expenses, E&O etc etc as an agency owner.

Long story short... IMO you are paying too much.

*******UPDATE*******
For the record I am in Colorado, and I am unfamiliar with LA Wages and Expenses. (Please excuse what may be an ignorant answer geographically)

 

[Josh]

Give one two weeks off, nice vacation... see how much business you are missing out on because they were not there.

If you notice... Bring em back...

If you do not notice a dip... make that vacation permanent.

That's a brilliant strategy.

 

[adjusterjack]

Hi,
I have a new agency that I started and I currently have 4 W2 employees who are now coming back asking for a raise.
I pay between $18-20/hour give a complete benefits package and 35% in commission.
Can you please share the common structure in P&C in Los Angeles area?
One of my employees do not get a commission. Instead he gets $700/week and $15 per policy and working only part time (8-2).
I think that I am over paying and would love to hear your input. TIA

Offer to put them on straight commission and then they can make as much money as they want.

 

[cruhm1971]

Definitely think you're over paying. My last gig in the P&C world, I got 40 new and 30 renewal in Scottsdale.

I now have partnered with an agency that pays me 50/50 Personal Lines and 30/30 for commercial. I simply refer and they quote, sell and service. They write in 42 states, so it works well for me.

They better have some hefty goals to get what you're paying, like $50,000 - $100,000 a month.

 

[BADTROUT]

At that commission I think 1 mil written in a nearly limitless city like LA would be minimum expectation.

 

[rbadoux]

Commission only. Hourly pay is not enough motivation to exceed expectations.

 

[BADTROUT]

Pay some hourly so that you can direct them... Read the DOL rules on the Federal Minimum wage laws, and you'll see that commission only means that your ability to direct them properly could be diminished. Cure that with a little base pay (at least min wage).

 

[blue_wynd]

I think you are over paying them, but I don't know LA job market rate. I would recommend doing some research on the current market rates for a CSR or sales rep. See how much the competition is paying. Indeed.com might be a resource by checking the job posts.

 

[todd02]

Your not paying renewals? I would pay renewals to the better sales people or you won’t retain them. Then they get a raise every year from them growing “their book” in your book.