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2022 Financial Planning

Lacey EndresBy: Lacey Endres, CIC, PIAW Treasurer

As I head into my year as the treasurer of the PIAW, I am more mindful than ever of our need for fiscal responsibility. Not only am I focused on helping to maintain the PIAW’s strong financial position, but I am also thinking about this from the perspective of my agency as we plan for our 2022 budget.

Effectively managing costs is something we are all expected to do in our professional roles. We ask ourselves how we can effectively manage our operating expenses while still taking excellent care of our clients and employees. This is the age-old question that we face each year as we look to confirm where our money is best spent. One of our biggest focus areas is on creating an outstanding customer experience, so the last thing we want to do is something that will feel “cheap”. With this in mind, budget planning requires that we plug our brains in and are smart about decision-making.

For example, we strive to find technology options that improve both the client experience and the employee experience. This allows us to position ourselves as a forward-thinking agency that is innovative in how we partner with our clients. Even if there is an additional cost associated with the technology, it is likely still a huge win and worth the cost.

Another investment area we focus on is talent. Adding additional people in sales and service is critical to the success and growth of our agency. We spend time with each area of our company discussing workload concerns and geographic needs to confirm where additional resources and roles are necessary. Hiring additional people is something we don’t take lightly; we view it as a necessary and smart investment.

The past 18 months of working remotely has prompted some additional questions in terms of what we should continue to do that could lead to additional cost savings. As we look at travel, for example, we have started to question whether we actually need to be physically present for a specific meeting, or whether it makes more sense to meet virtually.

Should we be driving four hours each way to meet with one person in their office for an hour? Think about the cost associated with that! Eight hours away from the office, wear and tear on a vehicle, and mileage reimbursement. Could that meeting take place via a one-hour zoom call and still be as effective? The hard part is that it is not a straight black and white answer, as it likely depends on who the customer is and what the meeting is for. At the end of the day however, planning on more of a hybrid approach to meetings would undoubtedly provide some cost savings.

Another topic related to this is whether to invest in infrastructure. If you own or lease your building and you have outgrown your space, do you automatically look for something bigger, or do you encourage your team members to work remotely so you can stay in your current location for a bit longer? We have seen impact to the commercial building landscape as companies are getting out of leases early, or not renewing them, as they are encouraging their team members to work virtually. We all know the cost of having a building, so is it worth maintaining and growing your footprint, or not? This all depends on whether you want your team in the office all of the time, or if you are going to offer flexibility to help save cost on space.

One other area where we focus on cost at our agency is regarding employee education. Historically this has been a high spend from an operating expense perspective, but we often forget about opportunities to look outside our agency to help offset some of these education and training costs. For example, several of our carrier partners have sponsored scholarships for the CPIA designation in the past. We also have carriers offer to host newer employees for job shadowing or producer school curriculum, which is a great benefit to both the employee and the carrier, and a reduced cost to us from an education spend. Additionally, when we host strategic employee meetings and are looking for outside speakers, our carrier partners have helped identify subject matter experts who can lead sessions for us for minimal fees.

Whether it is spending money where it makes sense on things like people and technology, or saving money on travel and building costs, one thing is certain: Putting intentional time into planning and strategically thinking through where your money should go is a critical component to an agency’s financial success.