Dave Eddleman: Welcome everybody and thank you for listening. My name is Dave Eddleman with the Alexander Group, and I’m here today with Ron Arigo, chief human resources officer for AAA Northeast based out of Providence, Rhode Island. So, Ron, thank you for joining. I appreciate your time. And I guess we could just start off with telling us a little bit about AAA Northeast and all the various businesses that you’re involved in.
Ron Arigo: Absolutely, Dave, it’s a pleasure to be here with the Alexander Group this morning. Thank you for the time. So yes, I’m the chief HR officer for AAA Northeast, as you mentioned, headquartered in Providence, Rhode Island. So, we’re nearly 4000 employees. We’re one of the largest AAA organizations in North America. And of course, we are what most people associate with AAA, we are emergency roadside assistance. And nearly half of our 4000 employees are associated with automotive services. However, we are also an insurance company mainly focused on personal lines, homeowners, auto and umbrella and we are a travel services organization. We are a bank non-depository doing home loans, auto loans and student loans. And then my last mention would be we are a retail organization with nearly 70 branch locations across a six-state footprint. New York, New Jersey, Connecticut, Rhode Island, Massachusetts and southern New Hampshire. So that comprises AAA northeast. We are a membership organization, so a bit unique. We are not with owners. We are mission driven help and serve our membership population.
Dave Eddleman: Excellent. Well, we certainly enjoyed our engagement together recently. And a lot of the issues that came up were around talent and recruiting and retention. And one of the things I wanted to ask you about first is this issue of career pathing. And we’re seeing a lot of that in our engagements with clients, that it’s not just enough to achieve your quota or even exceed and earn outstanding pay, but rather what’s next for me in my career. What are the metrics? What is the career path to get me to the next level? I wonder if you could just speak to that a bit.
Ron Arigo: Yeah, absolutely. So I think for all of us, you know, you and I, everyone who is taking time to listen to our conversation, we experience Covid and Covid was something we all experienced together as such. Our workforce is one in which, it’s requiring to be, viewed as a whole person. Right? So, an employee is asking its employer to come to the table and help to take care of the whole self. And in taking care of the whole self, we have a wellness approach. I can speak about that a little bit later, but part of the wellness is specific around, having opportunities, opportunities to earn more pay and to do more for the organization for which they’re associated. And for us, we’re 80% nonexempt. So, it’s mainly a workforce that is earning a living wage. We pride ourselves on paying a living wage, not minimum wage. So therefore we have a large entry level workforce, and we have a world class training organization truly recognized for the work that we do. And we adopt the mindset that we can teach you anything you need to know in order to do your job well. And that includes, once you earn your reputation for doing your current job well, you can leverage that to do more for the organization. So that’s the premise of career pathing. First, do your first job, your current job well, and when doing so when interested and we, we, hope for aspirations to do more, we’re going to help you. And, our workforce is showing up with aspirations to do more. And when they do more, they can earn more, and they can be increasingly autonomous. So that’s the premise of career pathing, and I’m happy to get into some examples.
Dave Eddleman: No. That’s great and I think still, I mean, especially with the nonexempt workforce, you have a larger proportion typically of pay at risk. So we can talk about career pathing and all the virtues of that, but also making sure that those metrics are aligned with corporate metrics. Make sure they’re easy and they’re simple to understand. And I know how I’m doing in terms of earning variable pay, and we talked a lot about that and during our, our project. But I wonder if you could just speak to a few elements of that.
Ron Arigo: Yeah, absolutely. So, from an entry level workforce perspective, a lot of our entry level jobs are customer service or member service related. So we train our coworkers to deliver, on the value proposition of being a member for AAA, satisfying our membership needs. And there’s a component of that that is sales, you know, asking the right questions about, their understanding of the services, the discounts and the rewards that are available to them as members when they take advantage of our services. Are our services delivered to their level of expectation? So we we’re able to teach well that interaction for the mentions of our various businesses, insurance, travel and our bank, many of the rules associated in those businesses are sales roles. So we are, for instance, an insurance, an insurer. We’ve been transitioning from agency to insurer, and sales acumen is a necessary competency. Our learning and development team is expert at teaching sales skills. If interested, anyone can learn the basics of sales skills, and we have a workforce that has shown up with interest because it’s an opportunity to earn more and be more autonomous in their day-to-day work experience, specifically with AAA northeast. So a little bit more specific on insurance. We have implemented what we call the insurance academy. And we are looking to hire hundreds of sales agents as we continue to build out our insurance business, and we use the predictive index, which helps us to make a more informed hiring decision internally and externally. But we don’t base our decision solely on a behavioral assessment. We talk a lot about the opportunities, we talk about the training, and we talk about aspiration. And I’m pleased to say that we’ve had hundreds of employees show interest, get hired into our insurance business, get licensed as insurance agents. We have 100% pass rate with our internal workforce. And, they are able to earn a very, substantial living wage, hourly wage, plus the opportunity for incentive pay. And we’ve been at this for about a year now, and we’ve shown great return on investment, for the incentive pay opportunities and selling homeowners and auto and umbrella insurance to our members.
Dave Eddleman: Yeah, that’s a great point. And we see a lot of that. I mean, obviously we were focused on incentive pay for, the insurance side as well as other parts of the businesses. However, to your point, the enablement piece, many times, maybe most of the time is more important than the actual mechanics and metrics of the variable pay. And I know we didn’t talk about this, Rob, but I just wanted to ask it as one of the last questions, because I still think we’re seeing a lot of it. And that is that, in this non-exempt world, there are some and I know some of your employees are in an office in a branch, for example, and some employees are virtual, working out of their home office. And I just wanted to ask about some of the enablement challenges of having those two environments and, what you all are doing about that, if anything.
Ron Arigo: Yeah, absolutely. So again, circling back to the early mention of Covid. So, we had many starts and stops with our workforce. But first and foremost, making sure that our employees were safe while they were able to be productive, maintaining their employment and their benefits and their pay. So today we find ourselves with three working relationships across our company, fully remote, which is mainly our call center population, fully in person, which is mostly our drivers and our retail branch associates. And the balance about 25% of our organization, working in a hybrid role. To your mention about branch, and specific to insurance, we have an inside sales team, which is mainly remote. And then we also have sales associates that are physically located in our, nearly 70 locations. And, you know, it is when you speak of enablement, first and foremost, I think of engagement, making sure that our employees feel connected and a part of something important. And that takes on different challenges when you’re fully remote versus seeing some people in a branch from a day to day basis. But we connect regardless on the members needs, and the members needs are served well in informing them about our products and services, such as insurance and personal lines insurance. So a big part is communicating to our employees about the benefits that our members have access to and ensuring that from a sales and customer service perspective, that they’re well informed.
Dave Eddleman: Yeah. No, I noticed that a lot. The member experience is paramount with you all and you do a great job with that. Well, Ron, I just wanted to thank you for your time today. These are great, great insights and I appreciate that. And, any parting words, and then we’ll we’l sign off here.
Ron Arigo: Yeah. Dave. Well, again, I appreciate the opportunity to spend a few minutes with you today. Our experience with the Alexander Group has been excellent. We’ve talked in the past about the fact that what brought us together is a couple of things. One, it was my recognition early on as I became the chief human resource officer, that one of the things that kept me up at night was, our incentive plans and, and specifically that there were, there were many and they were difficult for me to understand as I took time to read through them and I learned through time and attention that it was also very difficult for our employees to understand their opportunities. And even my recruiting team to be able to explain it to prospective employees. So I appreciate that. Our engagement has helped to simplify our plans so that they’re easily understood, explained that they serve the intended purpose, which includes incenting the right behavior that serves our customers, in our case, members, very well, and that we’re providing products and services and articulating, the benefits. And in the end, it is increasing the revenue to the business, and the opportunity for pay to our employees, bettering their socioeconomic status.
Dave Eddleman: Well thank you. It was great working with you and the team. And, again, thanks for your time. And if anyone has any more questions, you can go to Alexander Group.com. We have some some great content around insurance incentive plans. Thank you again. And so long.
