Why Compensation and Company Culture Are Crucial in Today’s Landscape
By Andrea Wells
In today’s competitive landscape, the war for talent extends beyond just large brokers; it poses a challenge for nearly every agency. The shift towards a “free agent” mentality among professionals is reshaping how agencies attract and retain talent.
“It doesn’t matter if you’re a doctor or a lawyer or whatever profession you’re in; we’re in a free market for talent like never before,” explains Kevin Stipe, CEO and partner of Reagan Consulting. “People are more willing to switch employers quickly, and that’s a cultural phenomenon that agents and brokers must adapt to.”
Being responsive to this shift involves more than just competitive salaries. Stipe emphasizes the importance of cultivating a positive agency culture. “You cannot be a place that people hate to work,” he states. Building a genuine culture that employees look forward to being part of is essential. “Otherwise, you’re just swimming against a horrible current.”
Stipe advises agency owners to create an inviting environment. “Once you establish that, you can check off other boxes, including competitive pay and benefits,” he notes. “If you’re not fostering an environment where people want to be, you’ll face numerous challenges in a world where free agency is becoming the norm.”
Focus on Growth
As organic growth slows due to a stabilizing rate environment, profit margins are likely to tighten. Stipe suggests that independent agencies should prioritize driving new business while evaluating their current sales talent and hiring new salespeople as needed. “Generally speaking, firms need to hire more salespeople than they currently are,” he asserts. “Every study shows that agencies tend to under-hire sales talent, not accounting for how many are needed to meet their goals.”
Reagan’s latest quarterly update on the insurance distribution marketplace revealed that independent brokers experienced an overall organic growth of 7.4% in Q3 2025, marking a decline for the third consecutive quarter. Public brokers fared slightly worse, posting organic growth of just 5.0%.
“When organic growth slows, profit margins get squeezed,” Stipe explains. “Firms then realize they need to tighten expenses, with compensation being the largest expense for any agency.” However, this doesn’t necessarily mean pay cuts are imminent. Instead, agencies are pressured to enhance productivity from existing employees.
“Agencies start exploring how to reduce compensation as a percentage of revenue without causing discomfort,” Stipe adds. Utilizing technology and AI tools can help increase productivity, allowing agencies to do more with fewer resources.
Hiring Landscape
Mary Newgard, senior partner at Capstone Search Group, notes that the pressure to achieve more with less often leads employees to consider job changes. According to their annual report on Insurance Agency Compensation Trends, “dry promotions”—where employees receive additional responsibilities without a pay increase—are a primary motivator for job searches.
“This trend is not surprising,” Newgard says. “The added pressure can overwhelm employees who feel undercompensated for their increased workload.”
Newgard points out that “dry promotions” can occur unintentionally as agencies grow rapidly. However, if agency leaders fail to engage in regular conversations about compensation satisfaction, employees may seek those discussions with recruiters instead.
Art Betancourt, CEO at AEBetancourt, highlights the ongoing demand for talent in agencies nationwide. “Service roles, especially in high net worth areas, remain in high demand,” he states. His firm has collaborated with nearly 500 independent agencies on around 900 job roles in the past few years.
Betancourt notes that larger national brokers often offer higher salaries than independent firms, complicating recruitment efforts. Additionally, candidates are increasingly hesitant to accept roles with smaller brokers due to perceived job instability from potential acquisitions.
Another hiring challenge is the reluctance of some agency owners to provide flexibility for service roles. “Without even minimal hybrid work options, filling these roles becomes difficult,” he explains.
Today’s top candidates seek more than just standard benefits and PTO packages. “They desire clear performance bonus structures, flexibility, and modernized workplaces,” Betancourt emphasizes. “It’s not solely about compensation unless it’s a staggering figure.”
Agency owners must understand their employee value proposition (EVP). “That needs to be strong,” he advises. Agencies should assess what they are doing to invest in their employees, including technology that simplifies their work.
“Be prepared to answer why a high performer would want to leave their current position to work for you,” he adds. Building an EVP starts with understanding what keeps current employees engaged and identifying unique, valuable benefits to communicate to potential candidates.
Incentivize Employees to Improve the Business
Al Diamond, president of Agency Consulting Group, agrees that enhancing the employee experience is crucial for both employees and agency owners. “Half of your evaluation each year should focus on a development plan that increases your value to the agency,” he suggests. “Compensation isn’t just about salary; it’s about progression.”
Agencies should motivate employees to earn more through incentive pay. “We’re seeing a rise in incentive compensation programs instead of the standard 4% annual raise,” Diamond notes. These programs help assess employee productivity in terms of revenue and determine appropriate compensation percentages.
“This straightforward approach communicates to employees that their productivity defines their value to the agency,” he concludes. “The better they perform, the more they earn.”
Topics
Talent
Leadership
Training Development
By Andrea Wells
In today’s competitive landscape, the war for talent extends beyond just large brokers; it poses a challenge for nearly every agency. The shift towards a “free agent” mentality among professionals is reshaping how agencies attract and retain talent.
“It doesn’t matter if you’re a doctor or a lawyer or whatever profession you’re in; we’re in a free market for talent like never before,” explains Kevin Stipe, CEO and partner of Reagan Consulting. “People are more willing to switch employers quickly, and that’s a cultural phenomenon that agents and brokers must adapt to.”
Being responsive to this shift involves more than just competitive salaries. Stipe emphasizes the importance of cultivating a positive agency culture. “You cannot be a place that people hate to work,” he states. Building a genuine culture that employees look forward to being part of is essential. “Otherwise, you’re just swimming against a horrible current.”
Stipe advises agency owners to create an inviting environment. “Once you establish that, you can check off other boxes, including competitive pay and benefits,” he notes. “If you’re not fostering an environment where people want to be, you’ll face numerous challenges in a world where free agency is becoming the norm.”
Focus on Growth
As organic growth slows due to a stabilizing rate environment, profit margins are likely to tighten. Stipe suggests that independent agencies should prioritize driving new business while evaluating their current sales talent and hiring new salespeople as needed. “Generally speaking, firms need to hire more salespeople than they currently are,” he asserts. “Every study shows that agencies tend to under-hire sales talent, not accounting for how many are needed to meet their goals.”
Reagan’s latest quarterly update on the insurance distribution marketplace revealed that independent brokers experienced an overall organic growth of 7.4% in Q3 2025, marking a decline for the third consecutive quarter. Public brokers fared slightly worse, posting organic growth of just 5.0%.
“When organic growth slows, profit margins get squeezed,” Stipe explains. “Firms then realize they need to tighten expenses, with compensation being the largest expense for any agency.” However, this doesn’t necessarily mean pay cuts are imminent. Instead, agencies are pressured to enhance productivity from existing employees.
“Agencies start exploring how to reduce compensation as a percentage of revenue without causing discomfort,” Stipe adds. Utilizing technology and AI tools can help increase productivity, allowing agencies to do more with fewer resources.
Hiring Landscape
Mary Newgard, senior partner at Capstone Search Group, notes that the pressure to achieve more with less often leads employees to consider job changes. According to their annual report on Insurance Agency Compensation Trends, “dry promotions”—where employees receive additional responsibilities without a pay increase—are a primary motivator for job searches.
“This trend is not surprising,” Newgard says. “The added pressure can overwhelm employees who feel undercompensated for their increased workload.”
Newgard points out that “dry promotions” can occur unintentionally as agencies grow rapidly. However, if agency leaders fail to engage in regular conversations about compensation satisfaction, employees may seek those discussions with recruiters instead.
Art Betancourt, CEO at AEBetancourt, highlights the ongoing demand for talent in agencies nationwide. “Service roles, especially in high net worth areas, remain in high demand,” he states. His firm has collaborated with nearly 500 independent agencies on around 900 job roles in the past few years.
Betancourt notes that larger national brokers often offer higher salaries than independent firms, complicating recruitment efforts. Additionally, candidates are increasingly hesitant to accept roles with smaller brokers due to perceived job instability from potential acquisitions.
Another hiring challenge is the reluctance of some agency owners to provide flexibility for service roles. “Without even minimal hybrid work options, filling these roles becomes difficult,” he explains.
Today’s top candidates seek more than just standard benefits and PTO packages. “They desire clear performance bonus structures, flexibility, and modernized workplaces,” Betancourt emphasizes. “It’s not solely about compensation unless it’s a staggering figure.”
Agency owners must understand their employee value proposition (EVP). “That needs to be strong,” he advises. Agencies should assess what they are doing to invest in their employees, including technology that simplifies their work.
“Be prepared to answer why a high performer would want to leave their current position to work for you,” he adds. Building an EVP starts with understanding what keeps current employees engaged and identifying unique, valuable benefits to communicate to potential candidates.
Incentivize Employees to Improve the Business
Al Diamond, president of Agency Consulting Group, agrees that enhancing the employee experience is crucial for both employees and agency owners. “Half of your evaluation each year should focus on a development plan that increases your value to the agency,” he suggests. “Compensation isn’t just about salary; it’s about progression.”
Agencies should motivate employees to earn more through incentive pay. “We’re seeing a rise in incentive compensation programs instead of the standard 4% annual raise,” Diamond notes. These programs help assess employee productivity in terms of revenue and determine appropriate compensation percentages.
“This straightforward approach communicates to employees that their productivity defines their value to the agency,” he concludes. “The better they perform, the more they earn.”
Topics
Talent
Leadership
Training Development
