By Andrea Wells
Today’s war for talent is not just a big broker dilemma. Almost any agency is at risk in today’s increasingly “free agent” world.
“It doesn’t matter if you’re a doctor or a lawyer or whatever profession you’re in, we’re just in more of a free market for talent, a free agency world than we’ve ever been before,” said Kevin Stipe, CEO and partner of Reagan Consulting.
“People are more willing to switch employers relatively quickly, and that’s a cultural phenomenon that agents and brokers have to be responsive to,” he said.
Being responsive goes far beyond salary and compensation plans. There’s a combination of tactics that agencies must respond to in today’s hiring world, Stipe said. “You cannot be a place that people hate to work,” he said. That means building an agency culture–a real culture–that makes people look forward to coming to work, he said. “Because otherwise you’re just swimming against a horrible current.”
Stipe advises agency owners to create an environment that people want to be a part of. “And then you can check off the other boxes, including being competitive from a pay and benefit standpoint,” he said. “If you’re not creating an environment where people really want to be, then you’re going to have all kinds of problems in a world where people are increasingly free agency minded.”
“The best firms that I’ve ever seen from a performance standpoint over an extended period of time are the firms that create a culture that people want to be a part of,” he said.
Focus on Growth
Stipe said as organic growth declines due to a stabilizing rate environment, profit margins are likely to get squeezed. That means independent agencies and brokerages should focus on driving new business growth while taking a closer look at their current sales talent and adding new sales talent when possible.
“Generally speaking, firms need to hire more salespeople than they’re hiring now,” Stipe told Insurance Journal last fall. “Every study we’ve ever done shows that agencies tend to under-hire salespeople because they don’t really account for how many they need to reach the goals that they want to reach.”
Reagan’s most recent quarterly update of the insurance distribution marketplace showed that independent brokers posted overall organic growth of 7.4% in Q3 2025, marking the third consecutive quarter of declining organic growth. Reagan reported that Q3 2025’s results were also the lowest third-quarter results since Q3 2020.
The report showed that public brokers fared slightly worse than their privately owned counterparts, posting organic growth at just 5.0%, consistent with the prior two quarters.
“When organic growth slows, profit margins get squeezed,” Stipe said. “So, then what happens is that firms start realizing, ‘OK, we have got to be tighter with expenses,’ and compensation is the number one expense for any agency.”
That doesn’t mean pay cuts are coming, he added. But that does put pressure on agencies to get more productivity out of the employees who are already there.
“Agencies start trying to figure out how they can reduce compensation as a percentage of revenue without causing pain for people,” Stipe said. One way to do that is by using technology, AI tools, to help push productivity to do more, or better, work with less people, he added.
Hiring Landscape
Mary Newgard, senior partner at Capstone Search Group, said that pressure to do more with less can often push employees to consider making a job change in today’s competitive talent landscape.
According to Capstone Search Group’s annual report on Insurance Agency Compensation Trends, which analyzed the firm’s independent insurance job placement data from 2017-2025, “dry promotions,” a term to define giving more job duties or responsibilities to a person without a pay increase, are the leading cause motivating an agency employee to start a new job search.
That trend is not surprising, Newgard said. “The added pressure bubbles to the surface in people who might be overwhelmed and feel that they are not being fairly compensated for their added work,” she explained. “You’re seeing folks doing the work of two people, sometimes more, and that wears on people over time.”
Newgard said “dry promotions” are not always purposeful. “Dry promotions sometimes become an innocent and natural evolution of agencies that are growing quickly,” she said.
But if agency leaders aren’t having conversations with their people about compensation satisfaction at all or only once a year during performance reviews, she said those conversations end up happening with job recruiters and other agencies looking to hire.
Art Betancourt, CEO and principal at AEBetancourt, another industry-focused recruitment firm, said the need for new talent in agencies across the nation hasn’t slowed down.
“Service roles still continue to have an extremely high demand, especially in the area of high net worth,” he said. While there’s always a need for great talent, Betancourt said that his firm alone has worked with close to 500 independent agencies on almost 900 job roles in the past three to four years alone.
“We’re still seeing a lot of the larger, national brokers, especially in select markets, paying significantly more than the independent, regional or local broker,” he added. “So, that has made things challenging for those independent firms to recruit talent, but it’s also made it challenging when they are potentially losing talent because of that as well.”
Betancourt also sees some hesitation with job candidates now about accepting roles with smaller brokers due to the heightened risk that they may get acquired by a larger, national broker. “They might see it as having less job stability,” he said.
Another challenge in hiring today is the unwillingness by some agency owners to offer flexibility for service roles, he added. “No flexibility for hybrid work, even if it’s just one day, makes a role difficult to fill,” he said.
Betancourt said the best job candidates today want more than the typical good benefit and PTO package. “They want clear outlines for performance bonuses, flexibility, and a modernized company, not outdated AMS systems that make somebody’s job harder than it has to be,” he said. “It’s not all just compensation, unless you’re pushing an eye-popping number.”
Betancourt advises agency owners to understand their employee value proposition (EVP). “That needs to be strong,” he said. Agencies need to ask what they are doing as an organization to invest in employees. That includes investing in technology and other tools that make employees’ jobs easier.
“Be able to answer the question of why a high performer would want to leave where they’re at currently and come work for you,” he said.
Building an EVP starts with asking current employees what truly keeps them there. Identify what is real, differentiating, and valuable, he said. And be able to explain those benefits to candidates and show how this will improve their employee experience.
Incentivize Employees to Improve the Business
Al Diamond, president of Agency Consulting Group, agrees that improving the employee experience is critical not only to the employee but also to the agency owners.
“In my estimation, half of your evaluation every year should be a development plan for making you more valuable to the agency and paying you more for that,” Diamond said. “A compensation program isn’t just about salary and benefits; it’s how you progress,” he said. Employees should be in control of their own compensation, at least to some extent, he added.
Agencies should motivate employees to earn more through incentive pay, Diamond advocates. “We’re seeing more than ever incentive compensation programs coming into agencies instead of the standard 4% raise per year,” he said. Incentive programs help judge the productivity of employees in terms of revenue per employee, and what percentage of that should go back to the employees in terms of compensation,” he added.
“This is a very simple, straightforward way of telling your employees it’s your productivity that defines your value to the agency. Not how many people we have sitting in the office but how productive they are,” he said. “The better they do for the agency, the more they get paid.”
Topics
Talent
Leadership
Training Development
