Canadian Underwriter

Commissions may not compensate brokers for rising workloads

June 21, 2022   by David Gambrill

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Commission structure doesn’t always compensate for the time brokers must spend preparing for prospective business, only to have a client reject the proposal, said a broker responding to Canadian Underwriter’s latest National Broker Survey.

“If I go to a dentist, a lawyer, a physiotherapist’s office…I have to pay for that first appointment,” one experienced respondent from a large brokerage wrote. “A broker can spend hours a year on first, and even subsequent visits or interviews, and gain zero in compensation.”

The bottom line is that if commissions focus solely on rewarding brokers for landing new business or keeping existing business, the broker has no incentive to work hard for clients that might not pan out.

Plus, client service representatives (CSRs) have taken on a whole new dimension of work in the new digital world, said another broker, and compensation needs to reflect that.

“If [the] market has moved to ‘order-takers from digital online hits,’ then CSRs are far more important than in the past,” a woman working in a mid-sized brokerage commented. “They no longer refer back to producers, they have to handle it all. We need to redefine and give them wages and support for the new emerging role.”

One broker is doing this through a commission on new business.

“We have a commission payment on new business for CSRs,” one senior female manager at a small brokerage commented. “We have great results and it’s a way to add to their compensation package.”

Generally, brokerage principals favour employee recognition programs as a method for compensating hard-working brokers. While touting workplace flexibility as a plus, one woman with 16-plus years in the business, applauded the move her mid-sized brokerage has made.

“Moving to a performance-based employer” has improved broker performance over the past two years, she said, rather than basing compensation on “intangibles.”

Overall, survey numbers found brokerage managers’ use of performance-based compensation as a tool for rewarding hard work is slowly dwindling — down to 68% in 2022, compared with 72% back in 2020.

This depends a great deal on the brokerage’s size, with 100% of the largest brokerages (firms with more than 100 employees) extolling performance-based compensation, but only 57% of smaller brokerages (under 20 employees) endorsing this form of compensation.

Smaller brokerages are also much more likely than larger counterparts to employ profit-sharing plans to encourage broker sales performance, our survey found.


This article is excerpted from one that appeared in the May issue of Canadian Underwriter. Feature image courtesy of