Insurance industry turnover is happening. We have many team members approaching retirement and/or retiring early. In addition, due to a staffing shortage, insurance agency team members are being solicited by recruiters. Most insurance agency team members don’t actually want to change positions; they do so to better their situation or because someone sells them a bigger and better dream. Leaders need to manage insurance stress to prevent team members from being lured away to a different agency.
Employee turnover can have significant financial implications for insurance agencies. Recent data indicates that turnover rates in the insurance industry have risen from historical averages of 8–9% to approximately 12–15% in recent years.
The costs associated with replacing an employee can be substantial. Studies suggest that the expense of replacing an employee can range from 50% to 150% of the individual’s annual salary, depending on the role and industry. For insurance agencies, this means that losing an employee with an annual salary of $50,000 could result in replacement costs of between $25,000 and $75,000.
These costs encompass various factors, including recruitment expenses, training, lost productivity, and potential impacts on client relationships. For instance, contact centers within the insurance sector experience turnover rates between 30-45%, which is more than double the average for other occupations. Such high turnover not only incurs direct financial costs but also affects service quality and customer satisfaction.
Given these significant costs, it is crucial for insurance agencies to implement effective employee retention strategies. Focusing on employee engagement, providing opportunities for professional development, and fostering a positive work environment can help reduce turnover rates and associated expenses.
Want to reduce your team’s stress? Check out our new series: Cool, Calm, Covered: Mastering Insurance Job Stress
How To Manage Workplace Stress
Let’s walk you through some strategies on how to best manage workplace stress to reduce turnover in the insurance industry.
Hazard Pay
The first thing I want to share is that when you lose someone, especially a great team member, it causes more stress. The work must still be done. When you’re short-staffed, consider a temporary boost in pay and/or overtime (depending on the role). Your team will be picking up the slack—their perception is more work coming at them with no reward. Implement a temporary pay increase to help the team get compensated for their extra efforts.
Fire the Worst Customers
I love donating your vampire worst clients to the competition. These are the clients that drive your team nuts. If a handful of clients are driving your great team bonkers, you may need to request that they find another agent. Go back and look at the stats earlier in this blog. If a few customers leaving decreases your team’s stress, make it happen.
Don’t Be Part of the Problem
Do you know what can stress your team out? An unavailable leader. Instead of going about your business, be part of the team’s business. Be present, take on escalated matters, and help solve problems. We see a lot of leaders who delay responses to the team, aren’t clear, or never follow up on solutions. When you lead a team, they need to be the most important part of your day.
Watch Your Own Attitude
Your attitude is contagious. If you are upset, angry, or stressed, your team will be too. If you are kind, cool, strategic, and on track, they will model that behavior. Don’t discredit how much your personal attitude and approach matter. Your team is watching what you do as their leader.
1:1 Coaching Meetings
When I bring this up, leaders always roll their eyes. A monthly 1:1 once or twice a month—how will the leader ever fit it in? Well, with all the interruptions, stress, and problems, you are a firefighter, not a fire preventer. The 1:1s will catch disengagement and create an open, safe space for the team member to communicate with you. Open communication reduces stress.
Unbloat Your Processes
Recently, I have been to a slew of agencies where their processes are completely overdone. They have built processes for a single hiccup that occurred 10 years ago, or their entire processes are designed to serve their worst customer—thus bloating the processes for the ideal customer. Many agencies over-serve their worst customers while ignoring their best ones. If your agency keeps spreadsheets because you don’t trust the data in your management system, take the time to fix the system permanently instead of maintaining data in two places.
For more strategies on reducing stress, check out our new series: Cool, Calm, Covered: Mastering Insurance Job Stress
The Cost of Workplace Stress Other Than Turn Over
Stress among team members in an insurance agency can lead to significant costs and negative impacts beyond employee turnover. Key areas affected include:
1. Decreased Productivity
Stressed employees often experience diminished focus and efficiency, leading to lower overall productivity. This decline can result in missed deadlines, errors, and reduced client satisfaction, directly affecting the agency’s performance. It is estimated that job stress costs American companies over $300 billion annually in health costs, absenteeism, and poor performance. Citeturn0search0
2. Increased Absenteeism and Presenteeism
High stress levels contribute to both absenteeism (employees missing work) and presenteeism (employees attending work while unwell). Both scenarios can disrupt workflow and increase the burden on other team members. For instance, depression—often linked to chronic stress—costs employers an estimated $44 billion annually in lost productivity due to absenteeism and presenteeism. citeturn0search5
3. Elevated Healthcare Costs
Chronic stress is associated with various health issues, including cardiovascular diseases and mental health disorders, leading to increased healthcare utilization. Employees reporting high stress levels have nearly 50% higher healthcare expenditures. citeturn0search0
Addressing workplace stress through comprehensive wellness programs and supportive policies can mitigate these costs, leading to a healthier, more productive workforce.
Conclusion on How Managing Workplace Stress Can Stop Insurance Industry Turnover
Reducing workplace stress isn’t just about creating a better work environment—it’s a crucial strategy for preventing costly turnover and maintaining a high-performing insurance agency. By implementing proactive measures like temporary hazard pay, removing toxic clients, being a present and supportive leader, and streamlining outdated processes, agencies can foster a culture of engagement and stability.
Stress not only impacts productivity and morale but also contributes to absenteeism, presenteeism, and increased healthcare costs. Investing in stress management strategies ensures that team members feel valued, supported, and motivated to stay. If insurance agencies want to combat industry turnover, it starts with prioritizing a workplace where employees can thrive.
Want a less stressed team? Check out our new series: Cool, Calm, Covered: Mastering Insurance Job Stress
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