Expanding Your Team as a Freight Agent Owner
New years are opportunities for reflection and growth, especially for independent freight agents. Many consider the significant step of evolving from a solo venture to a multi-person business. This pivotal transition, while challenging, opens doors to expanded capabilities and opportunities.
In this blog post, we'll dive into the various aspects of team expansion. Whether you're considering hiring subagents, employing hourly assistants, onboarding full-time W2 employees, or outsourcing tasks to specialized staffing solutions, we'll guide you through each option. Additionally, we'll explore practical strategies for recruitment, retention, compensation, and managing team dynamics, particularly in customer interactions.
Exploring Team Expansion Options
As your freight agency grows, expanding your team becomes essential to manage increased sales and operational demands effectively. However, deciding on the right structure for this expansion is crucial.
- Role and Specialization: 1099 subagents, working as independent contractors, are crucial for both sales and operations. They are responsible for acquiring new customers, managing freight, and assisting in booking loads for the agency’s existing business.
- Commission-Based Flexibility: These subagents operate on a commission-only basis, offering flexibility and specialized skills without the overhead of full-time salaries.
- Control and Oversight: Although independent, subagents require oversight to align with the agency’s standards and customer service expectations.
- Training and Support: Providing them with essential training in sales, freight management, and customer service is key to their and the agency’s success.
Onboarding W2 Employees:
- Long-term Investment: Hiring W2 employees is a long-term investment in your agency's growth. These employees can develop deep knowledge of your business and form lasting relationships with customers.
- Training and Development: Invest in their training and professional development. This enhances their skills while also fostering loyalty and job satisfaction.
- Benefits and Compliance: Be prepared to manage aspects like payroll, benefits, and compliance with employment laws.
Utilizing Hourly Assistants:
- Support for Routine Tasks: Hourly assistants can handle routine administrative tasks, customer service, and basic operational duties. This allows your core team to focus on more strategic aspects of the business.
- Scalability: This option offers scalability, as you can adjust the hours based on current business needs.
- Cost Consideration: Keep in mind the cost implications, including potential overtime pay, especially during peak operational periods.
Outsourcing to Lean Staffing Solutions:
- Expertise on Demand: Outsourcing certain functions to specialized staffing solutions can provide expertise on demand.
- Cost Efficiency: This option can be more cost-efficient than hiring full-time employees for specialized roles, especially if the need is not constant.
- Focus on Core Business: By outsourcing, you can focus on your core business activities while experts handle specific operational aspects.
Expanding your team as a freight agent owner involves careful consideration of your business needs, growth objectives, and financial capacity. Whether through subagents, hourly assistants, W2 employees, or outsourcing to lean staffing solutions, each option offers unique benefits and challenges. Evaluate these options in the context of your agency's specific situation to make informed decisions that best support your growth trajectory.
Finding and Maintaining Talent
The strength of your agency is as robust as the talent you have on board. Finding and maintaining top talent isn't just about filling seats; it's about building a team that shares your business objectives and drives your agency forward.
Your journey to finding the right talent begins with a strategic approach to recruitment.
- Identify the Skills and Qualities You Need: Start by defining the roles clearly, focusing on the specific qualities crucial for success in those positions. Consider both technical and soft skills like communication, problem-solving, and adaptability.
- Leverage Multiple Recruitment Channels: Utilize online job portals, social media platforms (e.g., LinkedIn), industry networking events, and employee referrals to cast a wide net. Each channel has its strengths, and a combination can help you reach a diverse pool of candidates.
- Create an Appealing Job Description: Your job listings should be clear, concise, and attractive. Highlight the benefits of working with your agency, such as career growth opportunities, supportive work culture, and unique perks.
- Consider Non-Competes and Non-Solicits: When bringing on new team members, decide whether to enforce contractual agreements like non-compete and non-solicit clauses. These agreements can protect your business interests, but they also have implications for the employee's future career opportunities. It's important to understand the differences between these agreements and their legal enforceability.
Retention and Development:
Hiring the right talent is just the beginning. Retaining them requires an ongoing effort.
- Offer Competitive Compensation and Benefits: Ensure your compensation packages are competitive. This includes not only salaries but also benefits like health insurance, retirement plans, and performance bonuses.
- Foster a Positive Work Environment: A supportive and inclusive work culture can significantly improve employee satisfaction and retention. Encourage open communication, recognize achievements, and promote a healthy work-life balance.
- Invest in Professional Development: Provide opportunities for your team to grow and advance in their careers. This could be through training programs like LinkedIn Learning, attending industry conferences, or providing pathways for internal promotions.
For deeper insights into retention strategies, refer to our blog post on "How Leading Freight Brokers Retain Top-Performing Talent."
The success of your freight agency hinges on the people behind it. By employing thoughtful recruitment strategies and prioritizing employee retention and development, you can build a team that meets your business's current needs and drives its future growth.
Financing and Compensation Strategies
Bootstrapping refers to the practice of self-funding your business, a method especially relevant for start-ups or agencies looking to expand without external financial aid. This approach often involves minimizing initial expenses and reinvesting profits back into the business. While it demands careful financial planning and management, bootstrapping allows you to retain full control over your operations and avoid the pressures of external investors.
- Evaluate initial costs such as office equipment and technology investments.
- Develop a budget that prioritizes essential expenses.
- Reinvest profits strategically to support growth areas.
Paying Your Team:
Determining how to compensate your team is a crucial decision affecting your financial health and employee satisfaction. Let's look at the options:
- Full Commission: Employees are paid solely based on their performance in a full commission structure. This model can drive high productivity and aligns employee rewards directly with company success. However, it may not provide the income stability that some employees need.
- Hourly + Commission: A hybrid model that includes both an hourly rate and commission incentives offers a balance. Employees have a stable income base supplemented by performance-based earnings. This approach can be particularly effective in aligning individual goals with company targets.
- Salary: Offering a fixed salary is a traditional approach that appeals to employees seeking income stability. While it may not directly incentivize high performance like a commission-based model, it provides predictability and can be complemented with other forms of performance-based bonuses or benefits.
Considerations for each model:
- Assess the nature of your operations and the preferences of your potential hires.
- Consider the market standards and competitive compensation packages.
- Align compensation models with your business goals and financial capacity.
Engaging with Payroll:
An efficient payroll system is essential if you pay salaries or hourly wages. A good payroll system ensures timely and accurate salary disbursement, adherence to tax regulations, and streamlined financial management.
Tips for effective payroll management:
- Choose a payroll system that is user-friendly and compliant with tax laws.
- Keep updated on regulatory changes that impact payroll processing.
- Ensure transparency and clarity in payroll for employee trust and satisfaction.
Deciding how to finance your business and what compensation model to adopt are decisions that should align with your agency's goals, market conditions, and the needs of your team.
Managing Employee Involvement in Customer Interactions
Managing the extent of your employees' access to customer information is a crucial decision that can significantly impact your agency's success.
Pros and Cons of Full Customer Access vs. Individual Customer Access:
Deciding between allowing employees full access to all customers' information or limiting them to information about only their individual customers is a strategic choice.
- Full Customer Access:
- Provides a comprehensive understanding of the agency's overall customer base
- Encourages broader market insights and collaborative problem-solving
- Can lead to more unified and cohesive customer service strategies
- Risk of sensitive information being broadly accessible
- Potential challenges in managing customer confidentiality and privacy
- Possible internal competition or conflicts of interest
- Individual Customer Access:
- Limits the scope of information, focusing employees on their direct responsibilities
- Reduces risks associated with broader data exposure
- Encourages depth over breadth in customer relationships and service
- Can create silos within the agency, limiting knowledge-sharing and collaboration
- Employees may lack awareness of broader business strategies and objectives
Balancing Risks and Rewards:
Finding the right balance requires a nuanced approach:
- Assess Business Model and Customer Dynamics: The nature of your agency's services and the expectations of your customers play a crucial role in this decision. A full customer view might be more beneficial in a collaborative, cross-functional agency setup.
- Evaluate Team Structure and Employee Capabilities: Consider your team's structure and your employees' capabilities. Less experienced staff might benefit from a more focused, individual customer approach.
- Implement Robust Data Management and Training Systems: Regardless of your choice, ensure robust data management policies are in place and provide comprehensive training to your employees. This includes training in customer relationship management, data privacy, and company protocols.
Carefully managing employee access to customer information is essential for maintaining high standards of service and operational efficiency in your freight agency. By thoughtfully aligning your approach with your business model, customer needs, and team capabilities, you can optimize both employee performance and customer satisfaction.
Steer Your Freight Agency to New Heights in 2024
The key to unlocking the full potential of your freight agency lies in personalized, strategic planning. At Armstrong, we don't just talk about growth; we make it a reality. We understand your business is unique, so we prioritize one-on-one meetings with independent business owners like you.
During these dedicated sessions, our experts dive deep into the core of your business. We assess where you stand today, understand your specific goals for the future, and explore the strategies you've considered to reach these objectives. This isn't just a conversation; it's a comprehensive evaluation tailored to your business's unique needs and aspirations.
By choosing Armstrong, you're not just choosing a new brokerage; you're gaining a partner invested in your growth and success.
Don't let another year pass by without maximizing your business's potential. Visit our website now to discover how Armstrong's superior back-office support can help transform your growth trajectory and set you on a path to remarkable profitability.
About Thomas Deas
Thomas has been with Armstrong since 2015, working in agent relations and recruiting. Prior, he served as Armstrong's Collections and Credit Manager. Thomas recruits and assists agents with day-to-day questions or challenges and provides training on Armstrong's proprietary transportation management system.