The insurance industry stands at the cusp of a growing talent crisis. With an increasingly “greying” workforce, an impending wave of retirements and a startling lack of incumbent talent, the need for an industry solution is real and immediate. Unfortunately, many insurers are unprepared to face a fiercely competitive recruitment climate. To ensure the continued success of organizations within the insurance industry, this call to action must be addressed.
Understanding the Reality of the Insurance Labor Market
According to the U.S. Bureau of Labor Statistics (BLS), nearly 50 percent of the insurance industry workforce is aged 45 and older. In addition, the past ten years have seen the number of insurance employees aged 55 and older increases by 74 percent.1 As a result, the current total of insurance professionals aged 55 and older is nearly 30 percent higher than the rest of the economy. With the general economy expected to see more than one million employee retirements within the next ten years, it is evident that this mass exodus of tenured and skilled professionals will be felt acutely within the insurance industry. In fact, current predictions show that nearly half of all insurance professionals will be retired or on the verge of retirement within 15 years.
Perhaps even more shocking than the rapidly aging insurance workforce is the dramatic shortage of less-tenured talent. Currently, only 27 percent of insurance employees fall under the age of 35. Faced with an impending exodus of institutional knowledge and skills, companies are finding that their current bench of employees is unable to fill the growing gap. This realization is highlighting an acute industry need for a major influx of talented young professionals to help offset the skills gap and fill the roles of near-term retirees.
Fortunately, the Millennial generation is poised to help fill the void. Already 77 million strong and accounting for 25 percent of the U.S. workforce, Millennials are redefining the workplace of the future.2 According to PwC, “the Millennial generation […] will shape the world of work for years to come. Their career aspirations, attitudes about work, and knowledge of new technologies will define the culture of the 21st century workplace.” This emerging talent pool is the logical source for qualified, bright professionals to fill the growing insurance industry demand.
However, a career in insurance is not one that most young people actively seek. According to a survey by The Griffith Insurance Education Foundation and The Institutes, less than one in ten young professionals are interested in working in the insurance industry. They feel that insurance is “boring” and “uninteresting;” and they do not want a career selling insurance. Insurers are now faced with the challenging mandate of engaging and recruiting young professionals and recent graduates who have a negative perception of the industry or are unaware of insurance as a career option. What can the insurance industry do to successfully compete for emerging talent?
Rebranding Insurance as a Force for Good
The Millennial generation is driven by a desire to be socially relevant, empowered and impactful. They want to know that their work is helping to make a difference in the world and in the lives of others. Having a positive image is a key factor in their career decisions. In fact, nearly 60 percent of Millennials would avoid working in a particular sector or industry if they feel that it has a negative reputation.
This is problematic for the insurance industry. In terms of positive public image, insurance is tied for second to last with the defense industry. As a result of its negative standing, 12 percent of participants in a recent PwC survey responded that they would avoid working within the insurance sector.3 With more than two-thirds of young professionals polled by Insurity/Microsoft indicating that “the insurance industry has a poor public image,” it becomes evident that negative industry perception and reputation may be one of the main obstacles in recruiting young talent to work in insurance.
Fortunately for insurance organizations, the industry has a “goodness factor” that can be shared and promoted in order to attract these socially-conscious professionals and combat their negative perceptions. Historically, insurance is a noble profession that serves as an anchor toward economic growth. It is an industry that does good and attracts high caliber individuals who strive to add value to the industry, the policyholders and their communities.
A number of industry organizations are heavily involved in charitable and volunteer programs throughout their communities. Organizations looking to increase their outreach to the Millennial generation should consider following suit and implementing a corporate citizenship program. This will not only help to create a sense of purpose and provide meaning to their work but will help to combat the negative stereotypes of the industry.
Increasing Industry Awareness and Education
Education is key to increasing Millennial awareness of the wide range of job opportunities available in the insurance industry. Recent graduates and young professionals are unsure of the ways in which their current educational backgrounds and job experiences can be applied to positions in an insurance organization. They are not well-informed of the wide-range of opportunities that the industry offers that their degrees in computer science, marketing or mathematics are transferable to exciting roles industry wide.
Many Millennials mistakenly view an insurance career as limited to working as an agent or in claims, as they have not been exposed to the wealth of other jobs. Just two percent of students surveyed in a study conducted by The Griffith Insurance Education Foundation and The Institutes say they are familiar with the insurance industry.5 More than 60 percent of Millennials report that they personally would like a job that includes analyzing risk and recommending solutions—a main component of many industry roles. However, the majority are not interested in working in insurance.
Insurance offers great opportunities to work in corporate communications, marketing, finance, data analytics, information technology and more. If the industry truly wishes to attract this young genera- tion of talent, there must be an increased focus on educating young professionals, recent graduates and prospective students on the many opportunities a career in the insurance industry offers.
Offering Competitive Perks and Benefits
Today’s young professionals are tech savvy, curious, intelligent and want to make an impact on the society around them. They want guidance, mentoring and a quick climb up the company ladder. To attract these young professionals, the industry must focus on creating a culture that fulfills these workplace wish lists. Or, more importantly, offers great jobs.
Fortunately, catering to these desired benefits does not require sweeping cultural changes. In fact, organizations may be sur- prised to learn that professionals across all generations seek many of the same benefits and perks. With flexible work options, up- to-date technology and competitive compensation packages listed as “must haves” among the Millennial workforce, insurers need to highlight and celebrate the perks they offer. Organizations must focus on emphasizing the benefits they currently offer and how they align with what young professionals are searching for.
For the full article, refer to page 14 in the Fall 2015 issue. https://www.airroc.org/assets/docs/matters/airroc%20matters%20fall%202015%20vol%2011%20no.%203.pdf