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Wayne Hooper Reports … Continued from page 32 Spencer Hostetter, a CPA with Spencer Hostetter, LLC. (http://www.shostetterllc.com) was asked by Eddie to tell the audience "Who does the IRS considers an employee and who is an independent contractor?”. Spencer went into the details as to who to consider for a form 1099 or a W-2 form. He discussed overtime pay and the penalties by the IRS for calling an employee an independent contractor. Many questions flowed out of that discussion but the one that got the most attention was "How to avoid triggering an IRS audit when distributing dividends (profits) to the owner." It was a complex answer but the short answer is if a dividend exceeds the owner's salary, it might trigger an IRS audit. If you have a specific question on your situation as to how to distribute profits you should contact Spencer Hostetter for a professional answer. Eddie mentioned the title Customer Service Rep. (CSR) is not a recognized job description by the Georgia Insurance department. You can have a limited subagent, a Subagent, an Agent and a clerical position. A clerical person cannot quote or discuss coverage with a customer, but can take payments. The next big question was "How do I determine agent or producer compensation?" One agent from New York said he had great success with a three tier compensation level. A base salary is paid for the baseline minimum production goal. A bonus or profit sharing incentive was for exceeding that goal to the next level in production, then a third bonus level for a truly outstanding production level. It was important that the bonus incentive be paid immediately to reinforce positive production, especially when trying to multi-line an existing customer. The number of bonus or incentive plans is only limited by your imagination. In a routine paperwork processing job, I once used a production goal to get “flex time" or free lunch for the clerical staff at the local Mexican Restaurant. I found that the public recognition of a job well done was a great motivator. The ability to clock out when the job was finished was a tremendous incentive on what was a boring processing function. Paying extra Money is also a great incentive when tied to production, but the reward should come within weeks of the extra effort or it loses its motivation. It can help solve the employees’ problems on the home front from unexpected bills when they get a nice lump sum. To do an incentive plan, the agency or company must have a job description as a base line. It was considered by everyone in the discussion that the time spent in actually writing down the job description and doing it yourself is time well spent.
FYI EXPRESS
I know from my own experience in management that if you can't do the job yourself in a certain amount of time, you cannot teach an inexperienced person how to do it in the time allowed. Every little detail and function needs to be listed and given a priority. An example: If you are working face to face with a customer and the phone rings, do you stop dealing with the customer to answer the phone or let it go to voice mail? What's the priority? (I worked as a consultant with a small Florida insurance company that allowed the coder/mail clerk to decide when to date stamp and open the company mail. She would let the mail sit for days before opening the mail, date stamping it and depositing the checks because no one ever told her it had the highest priority or required it. While the checks were sitting in the unopened mail, the customer's policies were being cancelled for non-payment by the computer. Her primary job was a coder, she had been forced to be the mail clerk when the clerk quit. She was indirectly controlling her work flow by not opening the mail!) After this round table meeting was over the group moved out to the lobby for refreshments and continued the discussions. I joined a group with Steve Watts, Watts Insurance Agency, who had attended a few seminars on the AFFORDABLE HEALTH CARE ACT. Steve has some great insights in how he thinks the uninsured public will react when they finally realize the cost. This subject will be covered in future meetings as the insurance department comes to grips with how to handle it. Wayne Hooper Wayne@FYIEXPRESS.com
Cell # 678-296-6345
Wayne Hooper is a retired Insurance executive and agent with 43 years’ experience in the P&C industry. A Georgia native, born in Tifton, Ga., Wayne graduated from Georgia State University with a degree in Psychology. He was commissioned into the Army on graduation and served in Germany. Wayne has been an underwriter, supervisor, manager, Product Manager, Reinsurance coordinator, agent, and Sales Manager with various carriers and MGA’s in his career. He recently retired from Kemper Specialty Insurance Co. after 13.5 years of service to join the staff of the FYI Express as a contributing editor. Wayne enjoys good humor, good food, good stories, history, sailing, antique cars, and hiking in the North Georgia Mountains. Not always in that order, depending on the weather.
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August, 2013