Prudential's secret for hiring self-starters: Try before you buySeptember 12, 2012: 10:08 AM ET
By training job candidates before hiring them, the financial services giant has slashed turnover — and aspiring agents get the chance to test-drive a new career while still in their old jobs.
FORTUNE -- As an account executive at risk management and reinsurance firm Aon, Darryl Thompson made a time-consuming daily trek between Manhattan and his home in suburban White Plains, N.Y. "I was unhappy about not spending enough time with my eight-year-old son," Thompson says. "I wanted more control over my own schedule."
Then, in 2010, a friend who worked for Prudential told him about an unusual recruiting method the company had launched the year before. Called the CDP, for Career Development Program, it allows people to stay in their current jobs throughout six months of training -- mostly online, and at the candidates' own pace -- to earn the professional designations required to become a certified life insurance agent and financial advisor.
Thompson decided to give it a try, and ended up quitting Aon (AON) to join Prudential (PRU) full-time in April 2011. As a seasoned property-and-casualty broker with an MBA in finance, Thompson might seem to have an edge over most who take Prudential's training, but he says not. "Many of my colleagues in the program were liberal-arts types like teachers and musicians," he says. Has the career change worked out the way he hoped? "Absolutely. I work even longer hours now, but I have much more flexibility," he says. "I wish I could have done this years ago."
Prudential launched the CDP in 2009 as a small-scale experiment, but it's worked so well that it's now the only way the company hires new financial professionals, some 3,400 of whom have done the training so far. "The way we used to hire people was much more the traditional method of interviewing them, hiring them, and then training them," says Caroline Feeney, Prudential's newly appointed president of agency distribution.
"Our managers like this approach a lot better, because it shows them clearly how committed and conscientious each candidate is before that person is hired," she adds. "As candidates go through the training, you can see very clearly who's committed and motivated, who really 'gets' the sales aspect of the business, who's enthusiastic and who isn't. It tells you volumes more than any job interview can."
The dropout rate is high. Roughly 60% of candidates don't make it through the demanding combination of course work, exams, assessments, and exercises Prudential requires (and pays for). "Either they decide somewhere along the way, or we do, that it just isn't going to work out," Feeney says. "But this way, we find out early, before we bring them on board and they end up quitting or being fired." By letting the company test-drive candidates, and vice versa, before they're added to the payroll, Feeney says the CDP costs much less than the company's old hiring method -- largely because it has chopped turnover by about 40%.
What advice can Feeney offer any other employer who might want to try a similar approach? "One thing we've learned since we started this is that it's important not to skip any steps," she says. "We've put together a detailed checklist of things candidates have to do, and we urge the managers who run the program in our branch offices not to compromise on any of them, because each step matters."
For those who make the cut, Prudential provides coaching, marketing expertise, and other resources to help newbies get their agencies up and running. Former restaurateur Mike Pan sees that as the best of two worlds. "You're running your own business, but with a lot more support than just being out there on your own," says Pan, who started up a Prudential office in a diverse neighborhood in Brooklyn's Chinatown after completing the CDP two years ago.
"It's not a 9-to-5 job. You control your own hours, and also your own income potential," he adds. "If you want to make more money, you just work harder."