In the past two years, the industry has seen what I'll call the "great shuffling." Agencies have closed, merged, been bought out and changed business models -- and the same has been true for travel advisors themselves.
A number have made, or are contemplating making, the switch from employee to independent contractor (IC).
It's a big jump. Working as an agency employee often offers something of a safety net, often with a guaranteed income and various benefits. But working as an IC has its own draws. ICs are their own bosses. They set their schedule and work the way they want to work (and with whom they want to work).
Both scenarios have advantages and disadvantages for travel advisors.
That came up on the most recent episode of the Trade Secrets podcast that I co-host. The episode was all about making the switch from an employee to an IC, and Amanda Klimak, president and co-owner of Largay Travel in Waterbury, Conn., lent her expertise as a guest.
Recently, Largay transitioned its employee agents to ICs, so Klimak is very familiar with the process. Largay was fortunate because its employees had seen the success of IC partners over the years and were open to the concept of owning their own businesses.
"However, it was scary, because they had a fixed compensation plan, they had health insurance, they were on our 401k," she said. "These are people who had been with us for many, many years, and we knew we wanted to retain them as independent contractors."
While noting it was a "huge transition" for the employees, Klimak said they all found solutions to problems and kept all employees on, albeit as ICs.
Among the drawbacks of being an IC is the fact that the industry can be a volatile one, and ICs don't necessarily have paychecks waiting every week, Klimak said. Those who transitioned and didn't have a spouse's health insurance to depend upon had to find an alternative plan.
But becoming an IC has its perks, as well. Largay helped its newly minted ICs figure out their business models and how to make them work for their lives.
"Because we also encourage our independent contractors to use a fee-based model, our people were able to still generate revenue during a time when the revenue wasn't coming from our supplier partners," Klimak said. "And that's really key. So, knowing your business, getting your clients prepared so that they know that you need to be compensated in order to sustain and support yourself."
For more on making the transition from an employee to an IC, listen to the latest episode of Trade Secrets, out first thing Monday, May 16.
You can find Trade Secrets here or wherever you listen to podcasts. And if you have a question for us to tackle in a future episode, call in to our hotline, 201-902-2098.