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Backlog Should Not Be Acceptable in Your Office

by Kel Plasket, CPCU, AAI
During most of my agency visits, there appears to be a common theme regarding backlog.  When I ask, “Do you have any backlog?”, the staff looks at me as though I have asked a really stupid question.  They answer something to the effect, “Of course we have backlog.  This is the insurance business, isn’t it?  If I were caught up, they’d only give me something else to do.”
Many agencies have been backlogged for so long, it has actually become acceptable not only to the service providers, but to management as well.  They no longer consider backlog a problem.  For those who accurately identify backlog as a problem, they either do not know how to fix it or lack the patience to solve it.  There are too many other things going on in the course of a day.  By not dealing with the problem, they are in effect saying, “…we don’t have time right now to concern ourselves with our employees’ well-being, our agency’s ability to provide superior customer service, the overall agency production and revenue, or the potential E&O minefield that awaits us.”
Backlog is a ticking time bomb.  It may be an individual that is behind, a service team or an entire department.  One person’s backlog may also create a bottleneck for other individuals or departments, depending on the process involved, which compounds the situation.  In extreme circumstances, the entire agency may be affected.
Backlog is normally quite obvious.  It defines itself as piles of paper.  This is the initial tip-off that there is a problem.  It can be one large pile or numerous smaller piles neatly arranged.  Some service providers will begin to create sub-piles from their big piles.  The work doesn’t get processed any quicker this way, but in some strange way the service providers feel more organized.  A major problem with all of this paper lying around is that the information has not yet been entered into the agency management system, and thus, the database has not been updated.  This results in the service providers having to look through all the papers to find a specific item before they can answer a client’s question.  Eventually, the service providers will find themselves going to the pile and the file for every transaction, whether they need to or not, because the integrity of the database is now in question.
There are a number of consequences to an agency as a result of a processing backlog.  The most costly in terms of an agency’s time, money and reputation is the increased probability of an errors and omissions claim.  Unprocessed paperwork could mean a missing or inadequate coverage.  It is also very difficult to provide excellent customer service when the client file in your system database does not provide current information.  In today’s competitive marketplace given the available technology, it is almost embarrassing for an agency to be unable to provide an immediate response to a client’s request.  Backlog forces the service provider to take down the client’s question or information with a promise to “…research the situation and get back to you when the policy has been located.”  This response certainly distinguishes your agency from the competition, but not in the way you had hoped.
Backlog has a direct effect on the staff’s morale, attitude and how they interact with the client.  A frustrated service provider representing your agency will have difficulty in projecting a smiling face and happy voice to your clients.  The agency’s failure to adequately address the backlog situation will ultimately result in turnover.  The sad part in this scenario is that many times your best workers are routinely given more work to do than their peers and their backlog never subsides, no matter how much extra time they put in.  The agency should consider the consequences of having one of its star employees leave the agency.
When an agency admits it has a backlog problem and commits to resolving the issue, it normally does one of four things:
  • Throw more people at the backlog from other parts of the agency
  • Hire additional employees
  • Pay overtime
  • Arrange quiet-time
All of the above solutions have inherent problems.  If you add more people to help eliminate the backlog, you have not solved the underlying issue that initially created the problem.  While the old piles may eventually disappear, the process has not changed to avoid the creation of new piles.  Overtime rarely works unless an on-site manager closely monitors it.  Most service providers will use this time to catch up on their routine work and never hit the backlog pile.  In essence, the agency pays extra for its employees to do their regular job.  In order for overtime to be successful, a specific action plan must be followed that has a standard against which to measure success. 
Quiet-time has mixed results depending on when it is scheduled, where the work is completed, what work is completed, the number of interruptions, and how the incoming phone calls are handled during this time.  If quiet-time is used, it should be scheduled for specific periods of time that coincide with the agency’s “slower” times.  Monday is not a good choice.  It is best if a specific pile of backlogged work is taken and completed by the service provider in a secluded office or conference room away from the normal workspace.  This will help to eliminate routine interruptions and the urge to work on other transactions besides the backlog.  Finally, incoming phone calls during quiet-time should be handled and completed by the other service providers.  The worst thing that can happen to an individual that has successfully completed a pile of backlog is to go back to her desk and find fifteen phone messages.  The feeling of accomplishment disappears immediately and the frustration reaches a higher level than it was before the quiet-time.  Negative attitudes can blossom quickly.
Before we can solve this spiraling, potentially endless problem of backlog, it is important to identify the reasons that created this predicament in the first place.  Most agencies have made the following comments: “We need more people to do the work…we don’t have the right people…we need more processors…we need more training…we have too many new people…we have too much work to do…we just can’t keep up…every time I think I’m catching up, I was mistaken…we’re fighting too many fires…I can’t get control over my desk…priorities are changing every hour…we were fine until we got this new system…if they actually worked instead of talking about it, more could be accomplished…I will never be caught up so I’m not going to worry about it anymore…”.
Sound familiar? The truth of the matter is, backlog is a curable disease, and it can be controlled so it never reappears.  One agency I worked with led the league in backlog.  They had unprocessed renewals that were six months old and unprocessed endorsements that were thirteen months old.  The paper took up an equivalent of four filing drawers (an entire filing cabinet!).  The agency staff were very creative in arranging their piles so that they could find the piece of paper easier.  They were in transaction type order by carrier by date and further split up depending upon whether the carrier had a service center.   There was so much paper they began to make notes in the system that the paper had been received and where it could be located, thinking that this work-around was actually saving them time and making things easier.  In fact, all it did was create more work later.
The main reason agencies develop backlog is because they do not have standardized workflows in place. The service providers handle similar transactions differently, a renewal timeline is not enforced, and “fighting fires” becomes routine.  The roles between the producers, CSR’s and processors overlap, creating uncertainty as to who is ultimately responsible for completing a transaction.  Service providers may also have limited authority for making decisions and delegating work when appropriate.
Remember the agency that had the backlog?  By creating standardized workflows, assigning responsibility and holding people accountable, this agency was able to process all of its incoming mail on a daily basis and keep the workload current going forward.  No new backlog was created.  As time became available during normal work hours and with limited overtime, the agency worked to eliminate the existing backlog in a controlled, coordinated effort.  In less than twelve weeks, the entire backlog of almost 4,000 transactions had been caught up.  Talk about a miracle comeback!  This agency went from last to first in less than three months.  The good news is that this agency has remained current over the last six months without increasing staff.  As a matter of fact, two individuals have left the agency for various reasons over the last six months, and it has not been necessary to replace them.  The implementation of standardized workflows, assigning responsibility for job functions, and continuous monitoring have made all the difference. 
So what is the moral of the story?  Any agency can eliminate its backlog as long as it is willing to implement standard workflows and embrace the changes associated with this worthwhile commitment.  Those agencies that step up to the plate will experience positive results and never look back!
Kel Plasket is a consultant in insurance operations. He works with agencies to increase their growth, productivity and profit through analysis, solutions and implementation.  He can be contacted at 256-765-9953 or . The author produced this article for the Agents Council for Technology which is affiliated with the Independent Insurance Agents & Brokers of America.  This article reflects the views of the author and should not be construed as an official statement of ACT.
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