Suppose you walked into a store to look for a new television. If the store only carried one brand, would you shop there? Of course not, but that’s just what today’s insurance behemoths want you to do when you buy insurance.

With an abundance of information just a few key strokes away, today’s consumers demand choice. From automobiles to zucchini, consumers do research online before they make a purchase. Today’s policyholders no longer accept a single company quote. It’s hard to satisfy this consumer demand if you’re an agent who can only offer one product. It’s why the era of the captive agent is coming to an end. Only independent agencies that “meet” their customers online by leveraging their customers’ desire for information and choice will succeed.

The rise of digital media—the web, social media, the smartphone and other mobile devices—has leveled the playing field and even tilted it toward independents. Independent agents can now compete against the industry’s brand behemoths by making their brand even more powerful in their area. They can become local brand behemoths.

Digital tools enable you to provide a better experience to existing clients. Online lead generation allows you to more efficiently find new clients.

Improving customer experience

In a commoditized industry like insurance, the only way you can differentiate yourself is to provide excellent customer service. In the digital age, that means providing your customers with the opportunity to interact with your agency whenever and however they want. From policy changes to evidence of insurance, customers today would rather do things themselves online than have to wait to call your office when it’s open.

One of the most surprising things is how much people love self-service. Surveys show that companies of all types, including insurers, consistently get better service scores when they let consumers manage their account themselves.

Does your website allow customers to make policy changes, track their claim, get a quote or review their policy limits? Consumer tastes also require that your website be mobile-compatible. The smartphone has replaced the computer as the device of choice for consumers. A mobile-compatible site must be clean, because smartphone screens are small. Users must be able to navigate and read your site quickly on a smartphone. Is your company’s website easy to use on a smartphone?

Your website can’t be static and one-dimensional. People don’t want to read gobs of copy online. Your site should give visitors interactive experiences. For instance, display the icons of the companies you represent instead of listing them.

Attracting new customers

Use online resources to expand the reach of your marketing efforts.

LinkedIn provides a great example. Start by identifying people on LinkedIn whom you are connected to indirectly (i.e. through an existing contact but not directly) or are members of the same business group as you. These are your LinkedIn prospects. Next, go through your existing business network and identify a service provider like an accountant, photographer or other small-business owner. Ask if they would be willing to provide a discount to customers you refer to them. If they agree, send an email to your prospects identified from LinkedIn letting them know they can receive a discount. This creates a win-win for both of you.

Here’s a real-life example: I received an email from an executive coach introducing herself and offering me a 75% discount on professional executive photographs. All I had to do was contact the photographer, mention the promotion and schedule a time for my photo shoot. At the end of the email, the executive coach asked me to add her to my network on LinkedIn. While I didn’t need a professional photo taken, I was intrigued by this online joint venture.

It turns out that one of the executive coach’s referral sources is a professional photographer, and they created a photo day for the executive coach’s clients and prospects. The photographer could give a deep discount because he only had to set up once for all of the photos that day.

Thirty people set up appointments. Existing customers of the executive coach were impressed with the value she brought in addition to her coaching. Prospects were introduced to the executive coach in a positive way – you just saved me a lot of money and introduced me to a quality photographer. The executive coach attended the whole day and used the time in between photo shoots to introduce herself or reacquaint herself with past clients. It was a win-win situation for both the coach and the photographer.

Digital giveaways

No one gets excited about a birthday card from his agent. Instead, how about giving away a mobile app so your business can stay top of mind? An app that gets your name on a client's phone is a great way to stay in touch—and provide something of real value.

Facebook, Twitter, Tumblr and more….

You need to be on social media. Although engaging with social media takes time, what you learn online provides you with valuable customer insights. It’s like getting the questions to a test in advance. You have a real advantage.

Social media isn’t just about following people. Post or tweet information about how to prepare for catastrophes unique to your area so people can prepare for them. The more you engage digitally, the more relevant you become online.

You’re probably thinking: “I don’t have time for this!” You’re right! Find someone who uses these tools everyday – a student or a young person in your office and put that person in charge.

All the pieces have fallen in place for independent agents. Seize the digital moment now and prosper!

Personal auto carriers are rapidly approaching a moment of truth when it comes to usage-based insurance (UBI) programs, in which a driver’s behavior is monitored via a telematics device. That goes both for insurers that have already launched such products, as well as those that have remained on the sidelines for a variety of reasons.

Early adopters of UBI are gaining a wealth of first-hand experience and insights that stand to provide a long-lasting competitive edge against insurers that until now have been undecided about whether or when to follow suit, as well as those either unwilling or unable to do so. The trailblazers are rapidly collecting a critical mass of data that can be analyzed to reveal driver behaviors that provide a basis for greater precision in underwriting and pricing.

For example, current rating methods would likely rate two drivers identically if they had the same credit scores, automobiles and demographics and lived in areas with similar geographic profiles. However, what if we knew through telematics observation that one of the insured persons drives her car one-tenth as much as the other, or at less risky times of the day? In that case, an insurer would be in a position to potentially leverage this new experiential information and underwrite the respective risks posed by the two drivers differently, as well as price coverage more accurately.

Having such first-hand driving data at their underwriters’ disposal could give existing UBI carriers a considerable leg up over those not using telematics, should the nonusers remain on the sidelines for long. For example, standard carriers could lose profitable policyholders who are cherry-picked by UBI-capable insurers that have acquired the capability to discern driver risk more granularly. Trying to catch up with the frontrunners in the UBI race is also likely to be costly—even more so as time goes on and the early birds get a bigger head start.

Of course, early adopters still face many challenges in executing a viable telematics program. For one, widespread consumer acceptance is no certainty, given privacy concerns for some and skepticism among others as to whether having their driving so closely scrutinized will benefit them in the end, or perhaps even be used against them in a number of ways—and not just by their auto insurer. Indeed, a January 2014 survey by the Deloitte Center for Financial Services exploring consumer use of mobile devices in financial services reveals that about half of the overall driving population is not open to the idea of UBI—at least for the moment.

In addition, while regulators have been supportive in the early stages of telematics development, down the road their acceptance may depend on a number of factors, including the eventual impact on rates for those who fail to meet whatever standards are attributed to “less risky” drivers. There may also be regulatory resistance if drivers face higher prices just because they choose not to be monitored, for whatever reason.

Wherever a carrier stands on the subject, we may have already reached the point of no return when it comes to telematics and UBI. The genie is out of the bottle. The industry as a whole is not likely to go back to relying only on its traditional methods of assessing auto risks. A growing number of carriers will likely adopt behavioral-based telematics as a way to at least supplement traditional underwriting factors.

Indeed, before too long the use of sensory technologies that permit behavioral underwriting by insurers is likely to be expanded beyond auto insurance into homeowners, life and health coverages, and perhaps even non-auto commercial lines as well, such as workers’ compensation. Smart homes, biometric monitoring, wearable technologies and the Internet of Things are all developing trends that could support and accelerate such initiatives.

But even if UBI is merely part of the natural evolution of auto insurance underwriting in an increasingly data-driven age, carriers of all stripes will likely need a strategy to respond to those that embrace telematics. Some will decide to go along for the ride, while the rest will have to figure out alternative routes to survive and prosper.

How big is the market for UBI products?

For a variety of reasons, UBI programs based on telematics data-gathering will probably not be for every driver. Indeed, our general hypothesis that only certain segments will permit their driving to be monitored by insurers was validated by Deloitte’s recent survey, which examined mobile technology experience, perceptions and expectations among financial services consumers. The survey, conducted in January 2014, drew 2,193 respondents representing a wide variety of demographic groups, broken down by age and income, split evenly in terms of gender.

Respondents were asked about their willingness to be monitored by auto insurers through an app on their smartphone, as opposed to having to install an additional piece of equipment into their vehicle, or having a car in which such equipment was already included by the manufacturer.

While most drivers who have signed up for telematics programs are currently monitored by a special device that’s part of their vehicle, going forward it’s likely that such technology could be largely displaced by a mobile app. Not only would the use of smartphones for telematics monitoring lower insurer costs for device distribution and retrieval as well as data transmission, the technology would also enable consumers to get more immediate feedback.

The survey identified three distinct groups among respondents when asked whether they would agree to allow an insurer to track their driving experience through their mobile device if it meant they would be eligible for premium discounts based on their performance. They were:

Eager beavers: More than one in four said they would allow such monitoring, without stipulating any specific minimum discount in return.

Fence sitters: The same percentage of respondents were a bit more cautious, noting they might get on board with UBI if the price was right, given a high enough discount to make it worth their while.

Naysayers: A little less than half said they would not be interested in having their driving monitored under any circumstances.

Among those who were open to the idea of telematics monitoring, about one in five expect a discount of 10% or less, with the vast majority anticipating 6% to 10%. About half expect between 11% and 20% (with 27% anticipating between 11% and 15%), while nearly one-third think they would be entitled to discounts greater than 20%.

When broken down by various demographic factors, age was the biggest differentiator. Nearly two-thirds of respondents aged 21–29 were willing to give UBI a go, compared with only 44% of those 60 or older. More than twice as many in the 21–29 age category than in the 60-or-older group (35% vs. 15%) said yes to telematics without stipulating a particular discount. This trend was somewhat less pronounced but still significant when comparing respondents under 30 with those in the 46–59 segment, among whom only 24% would allow monitoring with no stipulated discount.

Younger respondents were also less likely to expect a discount of greater than 20%—26% of the under-30 crowd compared with 38% of those aged 46–59. This could be because fewer older consumers are open to the idea of monitoring in the first place (perhaps out of “Big Brother” concerns, or the fact that they did not grow up in a fully Web-connected environment), and therefore would demand a bigger financial incentive before allowing an insurer to monitor their driving. Or it could be that the older segment, making more money on average than the youngest segment, is less likely to be won over by a relatively small discount—at least in dollar terms.

Income was not a differentiating factor, which was surprising considering that one might expect those with less discretionary funds to place more emphasis on how much they would save on their auto insurance premiums by signing on to a UBI program. Yet, only about 30% of both the highest (above $100,000) and lowest (below $50,000) income groups surveyed said the size of the discount would determine whether they would allow their driving to be monitored. Expectations about the size of the discount in return for signing on were also similar across income segments.

However, given the fact that higher-income consumers are generally considered potentially more valuable to insurers, seeing a significant segment of that coveted group open to the idea of UBI without worrying about the size of the discount could be a positive factor for telematics marketers.

While gender did not make a major difference in whether a respondent would allow insurers to monitor their driving, women did generally expect a higher discount for doing so, with 59% anticipating a rate break of 16% or higher (including 34% who expect more than 20%) compared with 48% among men (with 28% looking for a discount of 20% or higher).

What are the implications?

Looking at the big picture, with nearly half of the respondents in this survey indicating that UBI is not for them, a bifurcated market may eventually develop, with those who choose to be monitored representing a separate class of drivers who are underwritten in a different way, supplementing at first and perhaps later supplanting traditional pricing factors. In the end, serving the “naysayers” may become a specialty market niche for some carriers.

Still, this research, along with our interviews with insurer executives and media reports of UBI programs being tested or rolled out across the country appears to indicate that there is indeed a significant consumer segment ready, willing and able to at least test-drive telematics-based auto insurance programs. But that doesn’t mean the road to achieving growth and profitability through telematics is without speed bumps, potholes and other potential hazards.

Kevin Bingham is sharing this excerpt on behalf of the authors, Sam Friedman and Michelle Canaan, who can be reached through him. The full report, Overcoming Speed Bumps on the Way to Telematics, can be found here.

The world, the world of risk and risk in the world will be as different in 2020 as the original 13 colonies were from the U.S. as it is today.

The bad news is that Paul Revere won’t ride through your town alerting you.

So you'll have to settle for me -- and I am, in fact, giving you enough warning to design your future, and not just manage toward it.

Understand: When one thing is different, it is change. When everything is different, it is chaos.

Change works for dinosaurs. Chaos doesn’t.

But chaos brings opportunity for those who are prepared, and, if you’ve survived in this industry for any length of time, you are able to adapt. Your only issue is one of willingness.

What follows are the 10 environmental factors that, in combination, are triggers of the coming Risk Revolution. These cultural changes are fissures in the foundation of the “good old days” and render vulnerable all traditional institutions and structures that have done so well for so long.

1. Loss of innocence: When President Nixon said during the Watergate scandal, “I am not a crook,” he acknowledged the end of command and control. Raw power could no longer sustain the most powerful man in the world. As citizens, we confronted the “feet of clay” of our leaders. What Nixon did to weaken our trust in our political leaders, terrorists in airplanes on 9/11 did to our confidence. We won two world wars and are insulated and isolated from the “evil” out there by oceans on our coasts, but it is not enough. We have to accept we are vulnerable.
2. Katrina was a “girl” but she was no lady: When Hurricane Katrina hit the Gulf Coast in 2005, it breached levees and created a Mad Max world that none were ready to face. Our institutions – federal, state and local government, the Red Cross, etc. – were supposedly built for catastrophes but failed us. Our confidence in our system of order was lost. We must rethink the world.
3. “Hell no, we won’t go”:  war protests, burned bras, tie-dyed T-shirts, Elvis and the Beatles, hippies who protested everything except the right to protest. This was the marketplace speaking for the first time. Tomorrow, the market won't be quieted.
4. ________ - Americans:  African-Americans, Asian-Americans, you-name-it-Americans. We're no longer a homogeneous nation. One size does not fit all. The change will accentuate the world of niches, affinity groups and “verticals” and so fragment the market that mass customization will be required, down to a niche of one. We want it “our way,” and not just in fast food.
5. The front porch and the back fence are gone: Time and place now have little value, and “pace” is as fast as the buyer wants it to be. The question is: If Gen Y is known for a lack of empathy, how do you sell in a nonverbal world?
6. Tennis balls and Patty Hearst: Sgt. Gill, an intelligence officer, told me in 1972 about satellites that could read the label on your tennis ball while you were playing. In 1973, Jim, another military intelligence guy discovered that, while his data mining model couldn’t help the FBI find Patty Hearst, he could find everyone in America who was just like her. In an era of satellites/drones/etc. and big data, what happens to privacy?
7. Miss Hathaway: In the finance department of LSU, Joan always reminded me of Miss Hathaway from "The Beverly Hillbillies." She told me decades ago, “Mike, this LexisNexis thing is going to be big.” She was talking about the Internet. She was right.
8. From Ozzie and Harriet to Archie Bunker to the Huxtables to the Simpsons to the Modern Family and maybe to the Jetsons: The world keeps changing, and lots of people don't like that. They want to hold on to the past. Political correctness, shouts of racism and sexism, a bipolar political process, extremes, etc. all limit our willingness to hold hands and sing “Kumbaya.” We are changed forever, and so is our society and its most basic building block – the family. Deal with it.
9. “If you have all your eggs in one basket, make sure it’s a strong basket.”: That line, from a Volvo ad, circa 1980, applies today because we are betting the economy and our world on technology . What happens if a natural disaster, a terrorist, an enemy or sun spots disables our technology for a week, a month, a year?
10. Addictions: Addiction to the status quo is the worst. In this most serious form of dependency, we sacrifice everything to do nothing but protect our comfort zone. The insurance industry once owned the world of risk. Now we have done more than “let the camel’s nose under the tent.” We are now sleeping with the camel. When the market demanded innovation, we too often failed to provide it. Instead we gave up our responsibility and let government and others do what we didn’t want to do. Captives, alternative risk funding, HMOs, the ACA, self-insurance and the National Flood Insurance Program are all examples of decisions being made without us. That is the nature of markets. We were too slow, and something else filled the void. We still face two fundamental challenges: Our products are priced beyond the ability of many consumers to pay, and some embrace a “nanny state.”

The trends identified are not all right and they are not all wrong. They just are. What will 2020 bring your world? What will you do to prepare?

Remember the admonition from Peter Drucker, “Whom the gods wish to destroy, they send 40 years of prosperity.” The last decades have been good to us. The next decades can be, too, but only with the right amount of awareness, preparation, discipline and commitment.

George C. Scott, playing Gen. George Patton in the movie "Patton," said: “In times of war, all other forms of human endeavor shrink to insignificance.” 

Are you ready, willing and able to fight and prevail in the coming Risk Revolution?

Insurance is an important product, and its purchase should never be considered as a commodity. The value of having the right insurance coverage (by means of policy, endorsement or extension) and limits cannot be overstated. There are direct, indirect and opportunity costs, all of which can affect your bottom line. The intelligent buyer knows there is a difference between price and value.

Insurance is also an important service. The existing trends and emerging opportunities in the construction industry are driving specialized and customized insurance, surety and risk management solutions. The discipline of strategic risk management is one such development. It is recommended that your company partner with your insurance adviser to conduct a strategic risk analysis and to evaluate your company’sresilience and risk accountability culture.

It is important to embed a risk management mindset into strategic business planning processes. As a strategic discipline, risk management serves several important purposes, including decision making, risk and cost allocation and business-process improvement.

Contractors need to be mindful of two important concurrent developments:

Most of us don't think much about insurance. That's by design, of course. Insurance is supposed to be a safety net that affords us the leisure of not thinking about it. Unless of course, we have to. That generally happens about once a year when we're reacquainted with our premium. Ouch. According to statisticians, most of us will also have to think about our insurance about once every seven to eight years when we'll encounter a loss of some sort. Another ouch.

My insurance is pretty confusing. I pay for coverage of my house – a fairly precise calculation based on its quality, size, age, materials, etc. I get a guarantee that, if I keep paying my premium, my home will be covered for its replacement costs. That's pretty reassuring. But then it gets a little weird. I get a "blanket" (insurance-speak is very comforting), which is really a formula that assumes that all the stuff I own is worth, um, somewhere around 50% to 70% of the value of my home. Huh? Maybe there's a bit of science to this, but surely there's a lot of guess…and, according to research, about 39% of the time the formula is just wrong. (As one insurance CEO recently confessed to me, most folks are probably 50% underinsured). The complications go on: If I own something really valuable, some bauble or collectible, well, that has to go on a list of things that are really valuable, and those things get their own coverage. Then, so my stuff continues to be well-protected, I have to re-estimate the value of those things from time to time, or employ an appraiser. What's more, if I buy something or donate something I own, or if any of my things goes down or up in value for whatever reason, my insurance doesn't change -- because my provider doesn't know about these changes. And, if you've ever had a claim to file, the process starts with the assumption of fraud, with the burden of proof borne by the policyholder, because most people don't have an accurate accounting of their possessions and their value. Still another ouch.

So while I'm not supposed to be thinking about insurance, maybe I should be paying closer attention.  

Change is coming like a freight train, and its impact has the potential to shake one of the world's largest industries to its core. For a little perspective: The property and casualty insurance industry collected some $1.2 trillion (!) in premiums in 2012, (or about twice the annual GDP of Switzerland). 

At the core of the P/C insurance enterprise is (and I know I am simplifying here) the insurance-to-value ratio, which estimates whether there's enough capital reserved to insure the value of items insured --  if values go up, there'd better be enough money around in case of a loss. All good, right? Except that for as long as actuaries have been actuarying, the value side of that ratio has been a guess -- especially for personal property (the stuff I own other than my home). So, if I forget to tell my insurer about something I bought, or if I no longer own that painting, watch, collectible, antique; or if the precious metal in my jewelry has increased...then what? Am I paying too much, or am I underinsured for the current value of the things I own? Of course, these massive companies make calculated allowances for the opacity...but these allowances also cost us policyholders indirectly in increased premiums, and the inefficiency costs the insurer in potential returns on capital. 

The coming changes can be summarized in terms of three trends. First is the expectation of the connected generations, now entering their most acquisitive years and set to inherit $30 trillion of personal wealth. Second is the connected availability of current data about the value of things. Third is the emergence of the personal digital locker for things.

Data, data! I want my data! -- the expectation of the connected generations.

If they're anything, the connected generations are data-savvy and mobile. If you’ve shopped for just about anything with a Millennial recently, you’re familiar with their reliance on real-time data about products, local deals, on-line values and even local inventories. (I was with one of Google's brains, and he showed me how retailers are now sending Google local inventory data so now it can post availability and price of a searched-for item at a local store). Smartphone usage is nearly 90% for Gen Xers and Millennials, and data is mother's milk to the children of the connected generations who are being weaned on a diet rich with direct (disintermediated) access to comparisons, descriptions, opinions, crowd-sourced knowledge and even current values. The emerging generations rarely rely on the intermediation of experts (unless validated on a popular blog with a mass following) and are not likely to be satisfied with an indirect relationship with those affecting their financial health. Smartphones in hand, depending on data in the cloud, they will demand and receive visibility into the data shaping all their risk decisions.    

And here's where the insurance revolution will begin: A connected generation that is apt to disintermediate and has access to real-time info on just about any thing will demand that they insure only what they own (bye bye, blanket); that their insurance should track to real values, not formulaic guesses; and that they have the ability to reprice more frequently than once a year. 

The time is coming for variable-rate insurance that reflects changes in the values of items insured and is offered on a real-time basis for any item that the owner deems valuable. 

The price is wrong -- the real-time valuation of everything.

Over the past few years, several data services have sprung up whose charters are similar: something like developing the world's largest collection of data about products -- their descriptions, suggested retail price, current resale value, user manuals, photos and the like. No one has yet dominated, but it's early yet, and someone (or probably a few) will conquer the objective. Similarly, there are a few excellent companies that are collecting and indexing for speedy retrieval the information about every collectible that has been sold at auction for the past 15 years. I know something of these endeavors because our core product relies on the availability and accuracy of these data providers to collect the values (and other attributes) of the items people are putting into their Trovs (our moniker for the personal cloud for things). It is only a matter of time before we will be able to accurately assign a fair market value to most every thing -- in real-time and without human intervention. This real-time value transparency will transform the way that insurance is priced, and how financial institutions view total wealth.

My stuff in the clouds -- the automated collection and secure storage for the information about my things.

Within 12 to 24 months, connected consumers will embrace applications that will automatically (as much as possible) collect the information about all they own and store it in a secure, personal cloud-hosted locker. These "personal data lockers" will proliferate because of their convenience, because of real financial incentives from insurers and other service providers and because data-equipped consumers will have powerful new tools with which to drive bargains based on the data about everything they own. These new tools will pour fuel on the re-invention of insurance because all the information needed to provide new types of insurance products will be in the personal cloud-hosted data locker.

Progressively (pun noted, not intended) engineered insurance products that account for the connected generations' expectation of access to data, the abundance of data about products and collectibles and the active collection and accurate valuation of the things people own may turn the 300-year-old insurance industry on its head. Doubtless, the disruption will leave some carriers grappling for handholds and wondering how they could have insured against a different outcome.

This article first appeared in JetSet magazine.

In many workers’ compensation claims’ situations, we learn that the employer has made a bad hiring decision and not matched the right employee to the right job. Of course, once the injury occurs, it is too late to change the decision. Strictly from a monetary prospective, once you take on an employee you are presenting him a debit card that has an unlimited credit line.

Many prospective employees have mastered the interview process and can paint themselves as being ready, willing and able to do whatever the employer wants. How can employers get past the facade and make sure they have the right person for the right job?

The place to begin is with one of the many tools that provide what is known as an employee assessment process. The tool should, first, help determine the unique needs of the business and what the job position entails. This includes necessary skills, the attitudes the employee needs to possess and the personality characteristics that are most suited for the job. 

For example, an operating engineer needs not only the experience and skills to properly operate the equipment, but also:   

-- The ability to make good judgments for the safety of the equipment, as well as, himself and those around him.
-- A personality that allows little tolerance for risk. 

With the full list of requirements developed, employers can use the process to probe the personality of the prospective hire and see whether it is a match both for the job and for the personalities of those who will supervise him -- let’s face it, having personalities that can get along and communicate well are key to success, but that need is often overlooked by those doing the hiring.

Depending on what industry you're in and what type of job you wish to fill, we recommend that you obtain an opinion from a human resources professional. You should also use the other, more common verification approaches, such as reference checks, background and drug checks and post-offer medical examinations.

When you don't go through an employee assessment process, you can wind up with the sort of problem I saw an employer have recently when it hired a well-paid technician who had a good work history and positive references from prior employers. He interviewed well; seemed to have excellent knowledge of the employer’s industry; seemed smart; and seemed to understand how the relationships within the industry made a business successful. But, early in his tenure, problems surfaced because of: 

-- Poor communication with fellow technicians and a lack of a sense of the need to be a team player; projects took longer than necessary.
-- Constant complaints about the tasks he was assigned and about the employer’s process.
-- Difficulty consistently following his supervisor’s instructions.
-- A tendency to cut corners that endangered others and led him to injure himself.

The last injury he had at work started at his wrist and "grew" to other body parts. He decided he could no longer work. A sub rosa investigation found that “the growth" of the injury was exaggerated. The investigation found that he could carry and play with his children and perform other physical tasks at his home. By the time all the issues were sorted out, the direct and indirect costs for the employer exceeded $100,000.

Had an assessment process been in place, it is my view that this engineer could have been identified as a bad fit before he was hired, and the problems avoided. 

Why are many employers not taking advantage of an assessment process to help them improve their hiring batting average? After probing, we find that most employers do not have a realistic idea of the real costs of hiring and replacing employees. If they really knew how costly the hiring process could be, they would stop using their gut feelings.

HR consultants who work in a variety of industries tell us that hiring the wrong person can cost employers tens of thousands of dollars. Depending on the skill level and how high up the position is in an organization, the costs of turnover can be more than twice an employee’s annual salary, according to the Center for American Progress. And this does not include the costs of any work-related injuries.

An employee can be a valuable asset or can be a big liability. So let’s use the best approaches available to make sure your employee selection process is as good as it can be.

What are you waiting for?  Let’s get started!

Early in my sales career, I had the privilege of being under the leadership of Tom Vanyo, a master salesman, motivator, mentor and friend, who said to me one day in the spring of 1984, "If you don't make a major change today, you will be doing the same thing next week, next month and next year."

Tom had underscored on several occasions the importance of keeping track of my numbers. I typically responded, "What does it matter? I'm already one of your top producers." I made all the excuses: "I'm too busy. It's more paperwork. I don't have time."

Here was the bottom line: Did I really want to know? It was too easy to go home at the end of the day, pat myself on the back and say I had a busy day. But busy doing what?

There was something in Tom's tone that day in 1984 that really got my attention. It was a day I will never forget.

I went back into my office and started making some major changes to my sales process. I kept track of every dial, contact, appointment, sale and how many times each day I would ask for a referral. The numbers revealed how little I was actually doing each day. I thought I was really productive, but I wasn't. I got faked out by being busy. My paycheck revealed I was one of Tom's top producers, but my daily numbers told the whole truth.

Over the next year, I made several significant changes, and those changes showed in my results. I doubled my income that year and -- what I found interesting -- didn't work more hours. I was simply more productive.

You will never know what's working and what's not unless you keep track.

Are the fundamentals of sales the same today as they were in 1984 or even 100 years ago? My answer is yes! I love what Jim Rohn, the great business philosopher, said many years ago, "There are no new basics and fundamentals." It's so true. The basics of sales have not changed in thousands of years of recorded history.

What has changed is how we connect, educate and engage with our prospects and customers. Years ago, we connected by foot or horseback. Then along came the railroad, then the telegraph and telephone, then the Internet, websites, Twitter, Facebook, LinkedIn and so on.

Selling is a contact sport. In other words, you have to be in the presence of the prospect or customer, but certain principles always apply, whether the connection is by phone, voicemail, email, face-to-face or even through social media.

Do you have a sales process? If you do, and it is documented and honed, it will serve you as you grow.

Here are the five most important steps in a sales process:

Step 1: What is the purpose of this phone call, email, voicemail or meeting? This step establishes the "why." Sticking to the purpose of a call, meeting or voicemail will keep you on track throughout your presentation.

Step 2: Who is the right person I need to talk with to get the right results? This step identifies the "who" -- it will point you to the decision maker. It is important that you are speaking with the right people.

• How much time do you waste talking with the wrong people?
• Who is your target audience?
• Where are they located?

Step 3: What is the game plan for this call or meeting? This step establishes the "how" -- preparing for each call or meeting is how you project knowledge, confidence and a professional tone.

• How often have you found yourself in the middle of a meeting or phone call not prepared?
• What happens to your confidence?
• What communication tools are you going to use to connect with your prospect or customer?
• What days and times during the week are the best times to contact your prospect or customer?
• What skills have you developed to work though their objections?

Remember this, if you are confident, others will be confident in you.

Step 4: What is the solution for this prospect or customer? This step defines the "what" -- key questions will help you identify their problems, which will allow you to recommend the right products and services. So often a customer is not even aware of his problems or is not sure what he wants. It's important to help prospective customers become aware of the problems they may experience without your product or service. 

Step 5: Have I clearly communicated the next step? This step directs the "where" -- communicating the next step helps guide the prospect or client to make decisions that serve her well.

• Is the prospect or customer clear about the next steps that will help her solve her problems?
• How are you going to ask for her business?

Following these five steps will help you develop a simple, repeatable sales methodology that will take the guesswork out of each call you make or meeting you conduct. You'll be prepared for anything you face, even the tough ones.

What does your list look like?

A federal district court ruled in April 2014 that obesity itself may be a disability, amounting to the first shot in a war of lawsuits on grounds of obesity discrimination and opening up additional liability for workers' compensation claims across the country.

The case is Joseph Whittaker v. America’s Car-Mart, in the federal district court for the Eastern District of Missouri. Although the case is pending in Missouri, the implications apply nationwide because the court is applying provisions of the ubiquitous Americans with Disabilities Act (ADA).

The plaintiff claims the company, a car dealership chain, fired him from his job as a general manager after seven years of employment even though he was able to perform all essential functions of his job, with or without accommodations. He alleges that “severe obesity … is a physical impairment within the meaning of the ADA,” and that the company regarded him as being substantially limited in the major life activity of walking.

Attorneys for the company had moved to dismiss the case, arguing that obesity was not a disability under the Americans with Disabilities Act, and citing language from the Equal Employment Opportunity Commission that, “except in rare circumstances, obesity is not considered a disabling impairment.”

The judge rejected the company’s position, noting: “Plaintiff has sufficiently pled a claim that he is disabled within the meaning of the ADA.”

The plaintiff’s argument could be seen as a legal extension of the medical policy change made by the American Medical Association in June 2013, when the AMA adopted a policy that recognizes obesity as a disease.

Application to workers' compensation

One of the main issues in many workers' compensation claims is whether the employee is able to return to work in the open labor market. If the employee can’t, there is a focus on whether the inability to return to work was caused by the work accident alone, or is caused by pre-existing conditions, or a combination of the pre-existing disabilities and the work-related injuries. Claims are then adjudicated based on the primary cause of the inability to return to work.

Although most states have statutes that limit an award for permanent total disability benefits to those situations where the work injury alone is the cause, the practice is must different. For example, if a claimant has pre-existing disabilities and is then injured at work and cannot return to the workforce, judges are often reluctant to award minimal benefits, knowing that the claimant cannot ever return to work. It is much easier for the judge to find that the work injury alone is the primary cause and to award permanent total disability benefits even if the work injuries are only part of the equation.

Once obesity is accepted as a valid disability, injured workers could more easily argue that their obesity is a permanent condition that impedes their ability to return to work, as opposed to a temporary life-choice that can be reversed.

Injured workers could more easily qualify for Social Security disability benefits and for permanent total disability benefits, as the work injury is usually the last event in a chain of events (including, now, a history of obesity).

Once again, employers are being asked to shoulder not only the responsibilities of a work injury but also the responsibility of dealing with issues that have little, if any, relationship to the work environment.

After the ADA became law in 1993, I remember hearing the Americans with Disabilities Act referred to as “The Lawyers Full Employment Act.” Unfortunately, that moniker is now coming closer to reality.