Independent insurance agencies often describe a talent shortage as their biggest challenge. But according to industry expert Roger Sitkins, the real issue is a talent imbalance; too many employees focused on low-value work and too few dedicated to the high-value clients who drive growth.
The Profit Imbalance Hidden in Most Agencies
Sitkins’ research on agencies ranging from three million to one hundred million dollars in revenue reveals a clear pattern:
- The top 25% of clients generate 88% of total revenue
- The bottom 50% contribute just 4%, often at a loss
This imbalance creates what Sitkins calls hidden profit and valuation drains. Top producers and account teams unknowingly subsidize underperforming business, reducing profitability and limiting growth potential.
Redeploying Talent Instead of Hiring More
Most agencies do not need to hire their way out of the problem. The real opportunity lies in redeployment — aligning people with work that adds the most value.
Key steps include:
- Refocusing service teams and producers on higher-value activities
- Giving sales professionals more time in the green zone, where they sell and build relationships
- Providing top accounts with greater attention through stewardship reviews and referral strategies
This approach allows agencies to reclaim capacity and increase efficiency without increasing payroll.
Technology as a Force Multiplier
Technology can help, but only when used to its full potential. Many agencies invest in advanced management systems yet use less than half of their available features. The result is duplication of effort, unnecessary rework, and wasted dollars.
As Sitkins says, “If you get paid once, handle it once.”
When technology is optimized, workflows become faster, employees spend more time on value-generating work, and overall productivity improves.
The Financial Impact of Better Alignment
The financial results can be dramatic. One agency with $23M in annual revenue identified $1.7M in excess expenses caused by staffing misalignment — equal to more than $20M in lost valuation. By realigning people, processes, and technology, agencies can recover hidden profit and strengthen their long-term enterprise value.
The Takeaway for Agency Leaders
Independent agencies have more control over their talent challenges than they think. When they align people, processes, and technology around their most valuable clients, they can improve profitability, reduce inefficiency, and achieve sustainable growth.
Read the full article on The Insurance Lead
