Ahva Sadeghi, co-founder and CEO of Symba.
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The war for talent in today’s job market has spared few industries. Insurance companies are arguably facing their most difficult recruitment phase, with nearly half saying they are currently experiencing greater recruitment difficulties. Despite progress, companies still lack diversity – according to Deloitte, less than a quarter of entry-level positions and only 8% of managerial and executive positions are filled with racially and ethnically diverse professionals. With the job market as thin as it is today, insurance companies need to rethink how they build their workforce, with Diversity, Equity and Inclusion (DEI) being a top priority.
Why is it so difficult to recruit staff in the insurance market?
“It’s no secret that the insurance industry is one of the oldest aging workforces in the industry,” said Brad Whatley, managing director of the Jacobson Group. This makes it difficult to attract young talent to the labor market and get them excited about insurance. In addition, the pandemic made it difficult for insurance companies to plan their hiring in advance. Applications dropped significantly in 2020 and early 2021, which meant fewer staffing needs, but activity has picked up since then, and many companies are suddenly scrambling to fill their vacancies. Naturally, this has made the job market even more competitive due to the lack of manpower to fill the required roles. Today, the insurance industry has an unemployment rate of 1.6% compared to 3.6% for all other industries.
Insurance job openings have skyrocketed and companies are unable to hire people fast enough to keep up with the departing workforce. In addition, voluntary exits have increased in recent years (a trend that is likely to continue). And as insurance companies look to hire a more diverse workforce, the diverse talent available in the market is rapidly being crowded out.
The future calls for better recruiting strategies.
Despite the temporary slump as the pandemic hit the US economy, the insurance industry is continuing on the growth path it has maintained over the past decade. According to a study published in August 2022, over two-thirds – 68% – of companies in the industry plan to increase their workforce in the following 12 months and they cited expected growth in activity as the main reason. This planned hiring comes despite the fact that the job market is so brutally competitive at the moment.
Additionally, the generational gap in the industry will underscore the need for a strong recruitment strategy once the estimated 400,000 insurance workers who will retire do so. It will also not be easy to replace these retiring workers; According to a survey by The Institutes, eight out of ten millennials have limited knowledge of insurance careers. For insurance companies that want to remain well positioned in terms of personnel, all signs point to a difficult path.
When insurance companies thoughtfully and strategically realign their approach to recruiting, they can better compete and find and retain the talent that will help them grow.
You can develop an effective recruitment strategy.
1. Implement education and training programs. Hiring to fill positions is significantly more expensive than promotion from within. Employees who have been with a company for several years, especially if they started early as an intern, are more likely to stay with that company. Internship and apprenticeship programs that help develop the next generation of leaders for a company will pay off in the form of a reliable talent pipeline full of people invested in the success of that organization. These programs can also help attract diverse talent, such as Zurich’s two-year apprenticeship, which covers training for apprentices to complete an associate’s or bachelor’s degree and guarantees post-program placement.
2. Demonstrate job security and growth trajectory. With the current uncertainty in the economy and the recent spate of layoffs in the tech space, there is a greater interest in people staying in their roles. It’s important for employers to speak to the career path and learn what drives the newest generation of workers and put that at the heart of their recruitment efforts. Insurance is all about risk mitigation, so it’s important to highlight the stability of the industry.
3. Invest in diversity initiatives. It is important that diversity be preserved and interwoven in all of these recruitment efforts. Internship and apprenticeship programs can also help here. According to Brookings, such programs have shown promise for fostering innovation, cutting costs, hiring hard-to-fill positions, and building a more diverse workforce. Just look at the amazing work Allstate is doing to increase diversity, break down barriers, and build a new pipeline of talent in the wealth management industry.
4. Collaborate with others in the industry to drive change. A rising tide lifts all boats, and insurance companies working together to encourage more people into the industry can only help everyone involved. Organizations like the Insurance Careers Movement do the work, host conferences and build bridges across the industry to make it easier for people to find a career in insurance.
5. Use data and technology to engage and measure recruiting effectiveness. It is imperative to employ the latest recruitment and management technologies to track the effectiveness of your strategic recruitment practices. You need a clear way to see the results to further optimize your efforts and earn executive approval for these important recruiting methods.
A more strategic approach to recruiting and training talent is appropriate for the growing insurance industry, valued at an estimated $1.4 trillion in the US alone. The good news is that insurance companies are well positioned to attract talent with a clear history of job stability, and they have the tools needed to overhaul their recruitment processes.
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Ahva Sadeghi, co-founder and CEO of Symba. Read Ahva Sadeghi’s full leadership profile here.
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