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The same holds true on response-side subrogation, where inbound demands are received from claimant carriers. In many cases, these may have a low priority and are often rubber stamped or ignored, resulting in increased arbitration. Even when processes for review are adopted, are the savings being realized? Consider a common practice of sending inbound demands to a review team who will find savings, but when it goes back to the adjuster the savings are often for naught.

The key to success is to utilize the right people in the right position. This begins with first notice of loss and is a requirement at every stage in the life of a claim. Not everyone can be an adjuster, which requires a certain personality and the ability to concurrently negotiate, investigate, evaluate, and resolve sometimes complex situations.

By understanding the importance of the people to the processes, it becomes easier to hire more effectively. This needs to begin at the top, with strong management who will hire the right people at all levels, creating organizational bench strength that will evolve into a cross-generational competitive advantage.

While there is no magic pill to ensure quality hiring, there are steps that can be taken that can increase the likelihood of success.

1) Stop equating tenure with success. Some of the best hires have no claims experience whatsoever. They also have no bad habits, are highly trainable, and can have a rabid enthusiasm for advancement.

2) Look for proven success. Just because someone has been in a certain role at a competitor doesn't mean they were successful. After all, why are they leaving? While there may be a perfectly plausible explanation for their departure, it is critical to ask the deep, probing questions.

3) Don't forget the 80/20 rule, which in claims organizations often means that 80 percent of your problems are coming from 20 percent of your staff. Effectively remediating or removing the poor performers will increase both results and morale as explained in the 20/60/20 rule.

4) The 20/60/20 rule means that 20 percent of a typical organization is comprised of leaders. These are the “A” performers—the people who truly want to improve the organization. There are also 20 percent who are “C” players—the chronic complainers, whiners, and blamers, along with those who carry the weight of the world on their shoulders. Then there are the rest, the remaining 60 percent of the organization who will drift either up or down, depending on the strength of management.

By following simple rules and designing an organization can maximize productivity through hiring, training, development, and retention of key contributors, both internal and external. It is this type of total quality management focus on people that will drive results, irrespective of processes and technology.