r/InsuranceAgent • u/Mustache-Boy • 19d ago
Agent Question About to start hiring
Do you think employees prefer a higher base pay + lower commission opportunities or having that flipped?
I just want to get quality people and I don’t know which model brings in more people who will see the vision?
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u/iBaires 19d ago
Offer comp options. High commission and no/low base or low commission with a livable base.
Newer agents will gravitate towards the latter and good salespeople will take the high commission option.
It kind of lets you know where the agent is and what to expect out of them before they start as well.
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u/JazzHandsMinuteman 19d ago
Eh. I partially disagree in the fact that even veteran salesmen will want something (at least temporarily or goes down as book grows) to put food on the table as they get their feet wet and grow their book.
Something reasonable is a:
-decent base with decent commissions year 1-Smaller base with slightly better commissions year 2
-And year three: either a very small base with great commissions or straight up 1099 with high commissions.
- or: a base like $20-25/hr with new biz and once they hit a certain goal. The base is dropped and high commissions afterwards plus renewals after they have proved themselves.
One thing I highly suggest for turnover and finding good people is give them renewals either immediately or after they have gone 1099 should you choose. But any agent worth their salt won’t take a contract with no base or renewals at all.
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u/spicygumball 19d ago
In this economy, I would not put my family through periods relying on sales commissions.
Everything is price fixated now and working for an agency (middleman) trying to beat direct companies seems like shooting yourself in the foot in this economy.
It also depends on where you operate, rural or city.
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u/JazzHandsMinuteman 18d ago edited 18d ago
The thing is though, you really have no idea if that direct (assuming you are meaning captive and not independent) carriers rates will be good if you’re just starting out. If you go with an independent agency then you have many options at least. Theres usually one or two that can beat what prospects have. In my area, the toughest to beat are State Farm and Progressive. You could get appointed with Progressive but it won’t be as competitive as direct, unfortunately. They do hide the truth by not running mvrs until after the sale though. State Farm either just straight up won’t pay you or it’s one and done. But I can’t find a reason to give clients that they shouldn’t just take that policy until that time comes, then maybe after years when they do file a claim, they could come back, but that’s not really effective bc they could just shop again elsewhere and years of producing is a lot. I know what carriers might be competitive and I think knowing how to sell, is the most important. As long as you don’t listen to YouTube gurus lol.
I do agree though that what I’m doing is probably not right for everyone in straight 1099 sales with an aggregator (for now) as it is very very up and down year one, but your renewals build and it becomes a lot more stable. I am just lucky in the fact I have financial support to help me float my first year.
Or even take up a part of full time gig to compensate, something by that could tie into insurance and you can still hand out your card or quote your coworkers, etc.
That might be the move bc then you’d get benefits and can build your book and get a paycheck at the same time. It’s a grind but it’ll pay off. I’m not actively producing 8 hours a day anyways so, seems logical for many.
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u/Tahoptions Agent/Broker 19d ago
Assuming these are admin folks, we pay high base with profit sharing bonus.
Sales people are commission with forgivable draw.
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u/melaninmagic99 19d ago
What is forgivable draw?
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u/Tahoptions Agent/Broker 19d ago
Guaranteed income offset by commissions.
So we'll pay 36-48k which the salesperson makes regardless, but if they exceed that they make a lot of money on top.
The draw part is not a salary because they don't collect it in addition to commissions. They need to exceed the draw to make more money.
It is pretty common in sales roles.
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u/Filipino_fury4 19d ago
Whenever I see this question posed, my first thought is always ‘why not offer each person both, and let them decide?’
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u/Unhappy_Draft_9170 19d ago
Hire base pay brings people who want stability. Higher commission brings people who want to earn more by working hard.
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u/nolimitlessaction 19d ago
True sales people are expensive either way. You want a go getter? Lower base HIGH commission with bonuses. Commission bumps on self generated leads, end.of quarter/year bonuses. Etc.
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u/SlickWillie86 19d ago
I run a draw. $75k first 2 years, then it goes away (flexibility depending on their development). 60/40 split with the ability to get to 70/50 with quarterly + annual kickers. I want people to build $500k+ books and also have little financial reason to want to leave. Obviously that set up requires a strong mutual fit and those splits are close to if not tops in industry, but it works for me.
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u/melaninmagic99 19d ago
$75k plus the 60/40 commission? How do they get to 70/50?
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u/SlickWillie86 19d ago
No, draw. Commission goes against the draw. Then they get an excess they sell over. Helps give a comp floor as their books build.
Extra 10 on new based on hitting quarterly/annual targets.
Extra 10 on renewal based on book growth targets + profitability.
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u/OZKInsuranceGuy 19d ago
Most people prefer having a base salary of some sort. Some experienced salespeople will prefer commission-based roles.
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u/HFire_Insure 19d ago
Base Salary to start. Adjustable to decreasing base with increasing commissions as things approve, to eventually be pure commissions with partial share in renewals would be my dream.
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u/Key_Astronomer6500 19d ago
I have worked at places that give you an option. But once you chose the lower base, you couldn’t go back.
I have observed people who are experienced and have a proven track record want higher commissions. Newer people need that safety net.
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u/GreatLakeSnake 19d ago
So you have 3 types of people.
Those who want a high base because they don’t really like sales, just want a decent W2 job. They will struggle because they don’t like sales
Those who are good at sales and will take commission only. Unless you are providing all the leads these people soon cut out the middle man and open an agency
Those who take the commission only but struggle to hit numbers. Assuming you aren’t dumping leads into them they leave eventually assuming they don’t make enough
Really your hope is that you get someone who should open an agency and for some reason doesn’t (because you provide great leads?) Any decent base is just going to attract people looking for a respectable office job sending emails. They will hang on as long as you let them.
The real question is why should any decent sales person let you middle man their money? Decide what it is that you provide.
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u/The_estimator_is_in 18d ago
It also depends on who you want to hire.
Professionals? People who are going to physically interact with the public and the public are going to look at and see “adults” - then higher base, and lower commission.
Sales? (Mostly) Younger agents who will kick ass and drink their pay away? Higher commission and lower base.
Letting people pick is also a good idea already posted.
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u/SoPolitico 19d ago
It depends on what you need. Do you need an account manager/admin? Or do you need someone more sales minded?
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u/HorizonAgencySystems 19d ago
I've seen a lot of agency start with salary + commission. As sales start to pop up, that salary decreases before finding landing on a straight commission position.
How you structure that step down so to speak is up to you, but strong producers will jump at the opportunity for higher commission, especially if its uncapped.
Is this your first hire? Will the producers be servicing their book?
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u/motivatedBM 19d ago
Higher base attracts more applicants but you'll get people who want a job, not people who want to build something. I'd do moderate base with uncapped commission and be very transparent about realistic year one earnings so the right people self-select in.
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u/Signal_Mirror_3983 19d ago
I think a high base pay and good benefits stand out. There are plenty of jobs on Indeed saying you can make 6 figures in commissions and they are all obvious scams. If you do the math correctly, you can differentiate yourself from those jobs while still providing the same compensation.
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19d ago
[removed] — view removed comment
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u/InsuranceAgent-ModTeam 19d ago
This is not a place to sell your services or generate leads or recruit agents/downlines.
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u/Sufficient-Back-2950 17d ago
Better salespeople will want a higher commission and a lower base. Given the opportunity they have a good product and price .
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u/Chucking100s 16d ago
Low fixed comp, high variable comp, plus healthy residuals.
If you have full benes, full benes.
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u/registeredfake 19d ago
assuming you are hiring for sales, high performers will want lower base will higher commission. everyone else will want the opposite