You’ve heard all the talk about outsourcing in the media, and perhaps even seen other insurance agencies take advantage of the benefits of using contractors rather than hiring staff, but will it really work out for you? It depends.
Many companies choose outsourcing because of the cost savings that come from not having to pay employee benefits, but another benefit is freeing your remaining staffers from administrative work, enabling them to spend more time doing what they do best. A number of companies have reported greater employee satisfaction and job performance as back-office tasks are turned over to an outside contractor, as well as a sense of enhanced job security and employee value.
Several outsourcing companies deal specifically with the insurance industry. If you need help with back-office processing or analytical tasks, ReSourcePro of New York can farm out the work to overseas facilities, where an English speaking college-degreed professional will be specifically assigned to work directly with you. Users have reported fast turnaround times on work that could have taken their regular employees many weeks to complete. Another option that’s closer to home is WAHVE, LLC, an agency that matches over-55 retired insurance professionals with insurance agencies needing help with customer service, claims, or processing. WHAVE workers can help reduce overhead and other costs via connection to a client agency’s system, while keeping jobs here in the US.
The Downside: A Cautionary Tale
Some companies have been less than happy with their outsourcing experience. Training and supervision of workers may not meet your standards. There can also be time and communication conflicts due to time zone differences, as well as language barriers and security issues – all of which can create extra problems due to contractor mistakes and unforeseen delays. Once functions are turned over to a contractor, you lose direct control over training, risking accountability and customer satisfaction. You have to keep an eye on the cost, too: in the end, for some companies there are no real savings. Be cautious before letting go of employees in favor of unproven contractors: you may wish later that you had them back!
The Last Word
• The trend among many insurance agencies is to hire mainly ‘core’ employees (sales and upper administrative) and outsource support personnel or those temporary positions
that don’t directly generate revenue. As companies continue to slash costs to remain competitive, outsourcing non-core work is fast becoming the norm.
• If considering outsourcing, ask questions designed to cover as many contingencies and hidden costs as possible, including the status of the contractor’s financial health.
• Get everything in writing about what you will get and what services will cost extra.
• Ask for references and be sure to follow up.
• Outsource only some of your tasks initially, to evaluate the servicer’s performance over a period of time, before risking your company’s reputation and goodwill.