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Spurred by Hiring Binge, Geico Makes Training a Priority

May 14, 2009
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Related Topics: Career Development, Basic Skills Training, Employee Career Development, Retention
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Dan Schechter has a message for job seekers: 15 minutes with Geico could save your career. That’s about how long it takes to apply for a job with the car insurance giant, which has been hiring hundreds of people across the country as its business surges.

Schechter, Geico’s vice president of staff development, is plenty busy these days. Even as U.S. companies across many sectors aggressively slashed jobs, Geico rolled out plans during the first quarter to add nearly 1,000 employees in 19 states, boosting its ranks of sales, customer support and claims professionals. Most have been entry-level positions that require one-on-one interaction with consumers.

That means Geico, known for its quirky TV ads featuring jilted cavemen and talking geckos, will continue to invest in employee skills development in 2009. The newcomers, having gone through up to two months of training, should be in position to help Geico sustain the momentum of a solid 2008.

“Whenever you’re in our niche and the economy gets tough, people still expect low prices and great service. We’re still growing, and the bottom line is we want to make sure we’re staffed to provide the service we promised,” Schechter says.

Geico burnished its bottom line last year with record premium revenue of $12.47 billion, up from $11.8 billion in 2007. That’s according to the annual financial report of Berkshire Hathaway Associates, run by investment tycoon Warren Buffett. Geico has been a wholly owned subsidiary of Berkshire Hathaway since 1996.

The hiring spree is a departure from the horrid unemployment news of recent months, but it’s not out of the ordinary for Geico. The insurer, based in Chevy Chase, Maryland, has hired more than 1,900 people since 2006, and employs 23,000 people in the U.S.

Geico likely isn’t through recruiting for the year, either. Its workforce management process generates weekly, monthly and quarterly forecasts of staffing needs. The routine enables Geico to stay on top of its talent needs, and plan for training accordingly.

“We’re pretty good at [predicting] what we’ll need,” Schechter says. “That helps us avoid getting overstaffed and having to stop hiring or even make cuts.”

Schechter says the majority of new employees are novices in the insurance industry. They spend part of one week taking orientation classes before moving into more targeted learning that pertains to their specific jobs. Geico looks for “hardworking, high-character people” and puts them through four to eight weeks of structured training, he says.

The learning varies, depending on the job, but includes a mix of classroom work and practical exercises that familiarize people with the tasks, business processes and systems they’ll need to know.

“The vast majority will come in not knowing much, if anything, about the insurance industry,” Schechter says. “Our training process is designed to give them several weeks of training, and then a follow-up period of high support from managers to pick up anything that might have been missed” during the formal learning.

Although it has structured and mature training processes, Schechter says 90 percent of learning occurs beyond the initial classroom instruction. Geico managers are expected to serve as coaches, providing continual feedback and working with frontline employees to target learning needs, set goals and chart their progress.

“The goal is to enable folks to get promoted so that they’re at the level that best fits them,” Schechter says.

The cloudy jobs picture for candidates becomes a silver lining for services and support employers: They have an easier time finding good job candidates. The Society for Human Resource Management says in an April report that employment projections have hit a four-year low in manufacturing and services, the two largest segments of the U.S. private sector.

In March 2008, 16 percent of services companies surveyed by SHRM said recruitment of top-tier candidates was getting more difficult, with roughly 8 percent saying it was getting easier. Just one year later, those numbers have been completely reversed. Just 1.7 percent report continuing difficulty in recruiting, while 25 percent say there are skilled candidates aplenty.

“It’s a domino effect: As employment goes down, it becomes easier to find people,” says Jennifer Schramm, SHRM’s manager of workplace trends and forecasting.

The services sector showed promise of increased hiring during January and February, but Schramm says April was a different story. Although nearly 22 percent of services companies expect to add jobs, more than 27 percent are poised to make cuts—a net loss of 5.5 percent.

More and more companies view training as a way to cope with a smaller workforce. In a separate SHRM survey of nearly 470 HR professionals, 34 percent say their companies are retraining staff for new positions, up from 10 percent that were doing so in October 2008

Training becomes of greater importance to customer support organizations during tough economic conditions, says John Ragsdale, vice president of research with the Sales and Service Professionals Association in San Diego.

“With customers pinching pennies, they are looking for any reason to cancel an account or shop for a cheaper option, so every support call becomes even more critical,” Ragsdale says.

Not all customer support people are created equal. Ragsdale says high-tech companies are struggling to find technically skilled engineers to fill support jobs. The situation isn’t as dire for companies like Geico.

“It should definitely become easier to hire non-technical people for call center jobs, such as the Geico positions, as more workers from service sectors find themselves needing a job,” Ragsdale says.

With a labor market awash in candidates, Geico is going to be selective. Having more people to choose from also requires more careful sorting to identify the best candidates, according to Schechter. Skills aside, there is another characteristic Geico wants in prospective employees.

“We’re not looking for people who’d like to give this a shot for a year and then move on. We want people who want to join the Geico family and be here a long time,” Schechter says.

Advancement is expected, with new employees averaging two to three promotions within their first three years. That mirrors Geico’s preference to promote from within, Schechter says.

It’s hard to know for certain how the promotion track is viewed by employees. Geico officials declined to make employees available for interviews, saying that only top executives are authorized to speak to the media.

A reading of comments on Glassdoor.com, a company that lets people anonymously post opinions of their employers, provides some insights into Geico’s culture. The company generally gets high marks for its pay, benefits and ethical reputation, but some workers clearly find career opportunities lacking.

Notes a Geico claims services representative in Virginia Beach, Virginia: “Unless you are one of the chosen few who are picked by [supervisors] to be promoted, you will spend your years toiling away in an entry-level position without the opportunity to advance.”

Employees who meet performance standards have job security even in a difficult economy, writes a Geico claims adjuster in San Diego. But the same person writes that Geico employees enjoy “little job satisfaction. The management style is very authoritarian and top down. Lots of whip cracking and little real leadership.”

Those aren’t exactly the kind of employee endorsements that woo top recruits. Yet Schechter points out that Geico employs “a ton of people” who have been with the company for multiple decades, including some who advanced from entry-level jobs to greater responsibilities. That includes CEO Tony Nicely, who started as a clerk with Geico in 1961.

Although most of its hiring centers on core customer support jobs, Geico also is recruiting for a small number of corporate positions, Schechter said. That includes jobs for information technology professionals, accountants, actuaries and financial analysts.

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