What Smaller Agencies Wish You Knew About Their Challenges and Advantages

Having worked in this industry for over 20 years, I have had the opportunity to be a part of agencies of all sizes, from a one-location, nine-employee agency to a couple-hundred-employee agency with multiple locations.

While my time with each of these has provided me with a wealth of knowledge and experience, there is something special about smaller organizations. Being a close-knit community and working together towards the common goal of overall success resonates on a different level. Knowing who you are sitting next to, learning about their families, their likes and dislikes and sharing stories and laughs makes the workday a little more enjoyable and brings comfort on the tough ones. Currently, I lead a team of eight (which is our entire agency), and I wouldn’t change it for the world! I absolutely love our culture and the personal level that we know each other. The sense of ownership each of us feels when we accomplish a goal is unmatched.

To shine a light on smaller agencies, ACN asked a few questions to get my insight on the world of smaller agencies. Read on for my answers below.

ACN: How do the perspectives of smaller agencies differ from those of larger agencies?

Kristin Thelen (KT): There is definitely strength in numbers, so larger agencies can spread the responsibilities among many, while staff in smaller agencies tend to take on a many different tasks to get things accomplished.

The goal remains the same no matter what size agency you are working for: to service the clients at the highest level and be as profitable as possible. Larger agencies tend to compartmentalize who does what, while staff at smaller organizations tend to have their hands in many different aspects of client service and production.

The hit when someone leaves is also more impactful at a smaller agency because the responsibility of each employee is more. Backlog becomes an issue and trying to find a replacement becomes the top priority. Larger agencies tend to continue business as usual and fill the position when the right candidate is found.  

ACN: What are unique challenges for smaller agencies?

KT: The biggest challenge in smaller agencies is the resources available to them. Technology and insurance carriers are the first things that come to mind. Technology is expensive and it is hard to justify the cost in a small agency. Most smaller agencies opt for a more basic agency management system knowing that it isn’t the best option, but it is the only option they can afford.

There are even some agencies still out there that don’t have an agency management system at all. They use paper files and write everything down to put in the client files. Insurance carriers, while they are plentiful, are selective when partnering with agencies. By nature, smaller agencies have smaller growth commitments. In a world of production and premium commitments, some carriers find it hard to justify partnering with a smaller agency because they know they won’t get the numbers they would from a larger one.

ACN: What are the unique advantages of smaller agencies?

KT: Knowing all your coworkers on a personal level is extremely unique in a small agency setting. When the culture promotes collaboration and teamwork, after some time together, you really become a work family. You learn about children, hear personal stories, become more than just work friends and share experiences on a much deeper level. The larger and multi-location agencies make it harder to establish this bond. You may not even know everyone you work with, other than their name.

Smaller agency settings make it easier to coordinate after-work events, team-building exercises for the whole agency and not just a department and the ability to celebrate successes as a whole. We are also able to arbitrarily reward employees without being held to a corporate bonus/raise structure or employee reward program. 

Another advantage of working at a small agency is the opportunity to be involved in operational decisions. When our agency makes a business decision, I include input from everyone before we move forward with any changes. Their buy-in is crucial for making any change a success. Larger agencies mostly rely on management or a few key employees for input when making a decision that affects many and everyone else finds out after the change has been decided.

The freedom to customize each employee’s experience and opportunities is something that I relish in. I love being able to play to the strength of my team members and allow them to flourish in their own setting. Everyone is different, and it’s a lot easier to make changes as needed on a case-by-case basis to help each person be their best.

 ACN: What’s one thing you wish the insurance community knew about smaller agencies?

KT: Smaller agencies are just as important to this industry as larger ones. It’s no secret that M&As are at an all-time high, but there is a certain dynamic that only a small agency can bring to the equation. The old saying is true: We may be small, but we are mighty! A small agency is just as capable as a larger one and shouldn’t be discredited for what they are doing.  

Employees from small agencies often have a deeper understanding of not only their role but other roles as well. When someone is out, employees need to step in to help. In order to do that, they need to know how to do that job which is outside their normal role. Larger agencies often have a number of people that do the same role, so when there is an absence, they don’t pull resources from other positions. They rely on counterparts to fill in. This really limits the opportunity for employees to learn other positions.

ACN: What have you found are good strategies for smaller agencies to adopt?

KT: Work together, get everyone’s buy-in and don’t limit employees’ potential. Being a small agency lends to a higher level of transparency because every decision impacts your team members on a deeper level. Your employees are on your team for a reason. Rely on them and value what they have to say. No matter your position, you are all in this together, and how they feel matters.  

Part of our agency culture is education, and it’s vital to ensure you are advocating educational opportunities. Insurance designations, Applied Net and state-level conventions are great ways to give back to your staff while providing them with unique opportunities to learn and network with industry peers.

ACN: What tips and advice do you have for smaller agencies?

KT: Being part of a small agency myself, the most important piece of advice I can give is to be proud of the organization you are a part of! You matter, and your voice is louder because there aren’t as many of you, so use it. Seek out ways to make your organization better. The resources that are available are there for everyone to use. Each of you can make a difference and have an impact on the direction of the agency more so than if you are a part of a larger organization.  

ACN: What are some ways ACN and the Applied community can help smaller agencies?

KT: Make sure the content applies to all sizes of agencies. It’s easy to contour the information to the biggest voices but remember that everyone can benefit from the opportunity to learn.  Smaller agencies aren’t going to find value in expensive third-party solutions. They find it hard to send staff to out of office class offerings. Make sure there is a mix of education and learning opportunities that everyone can take advantage of. It’s important to have representation from small agencies at Applied Net, because we can share a different perspective and often times a broader view of how one thing impacts another.

One of the greatest things about our industry is there is not a one-size-fits-all approach! Currently there are agencies of all sizes, and they offer different opportunities and work settings. You will absolutely find benefits and drawbacks to each, but the goal is to find what fits best with what you are looking for. I encourage you to be open to agencies of any size as you will find there are great things that come along with each.

If you enjoyed this article and want to find more on-demand content, be sure and check out ACN’s education resources and webinars. All webinars are free to ACN members — discover membership benefits today.

By Kristin A. Thelen, CISR, CIC, CAWC