(Forbes) - The war for talent in today’s job market has spared few industries. Insurance companies are arguably facing their most challenging recruiting period, with almost half citing greater difficulty in hiring now.
Despite progress being made, diversity is still lacking at firms—less than a quarter of entry-level roles and only 8% of senior and executive positions are filled with racially and ethnically diverse professionals, according to Deloitte. With the labor market stretched as thin as it is today, insurance companies need to rethink how they go about building their workforce with diversity, equity and inclusion (DEI) top of mind.
Why is it such a struggle to recruit in the insurance market?
“Insurance, it is no secret, is one of the most aged workforces in the industry,” says Brad Whatley, managing director of The Jacobson Group. This makes it difficult to attract young talent to the workforce and get them excited about insurance. Furthermore, the pandemic complicated the ability of insurance companies to plan their hiring ahead of time. Claims were down significantly in 2020 and early 2021, which meant less need for staff, but since then activity has increased and many firms are scrambling all at once to fill their empty positions. Naturally, this has made the labor market even more competitive, with a lack of workers to fill the needed roles. Today, the insurance industry has a 1.6% unemployment rate compared to 3.6% for all other industries.
The number of open jobs in the insurance industry has skyrocketed, and companies aren’t able to hire people fast enough to keep up with the outgoing employees. On top of that, voluntary exits have increased in recent years (a trend that looks likely to continue). And as insurance companies look to hire more diverse workforces, the available diverse talent on the market gets snapped up quickly.
The future calls for better recruitment strategies.
Despite the temporary blip as the pandemic impacted the U.S. economy, the insurance industry is still continuing along a path of growth that has lasted for the past decade. According to a study published in August 2022, over two-thirds—68%—of companies in the industry plan to increase their staff in the following 12 months, and the main reason they cited is expected growth in activity. This planned hiring is despite the fact that the labor market is so brutally competitive right now.
In addition, the generational gap in the industry will underline the need for a strong recruitment strategy soon when the estimated 400,000 insurance employees who are set to retire do so. It won’t be easy to replace those outgoing workers, either; eight in 10 Millennials, per a survey by The Institutes, have limited knowledge of career opportunities in the insurance field. All signs point to a difficult road ahead for insurance companies looking to stay well-staffed.
If insurance companies thoughtfully and strategically retool their recruitment approach, they can better compete and both find and retain the talent that will help them grow.
You can build out an effective recruitment strategy.
1. Implement apprenticeship and training programs. Hiring to fill roles is considerably more expensive than promoting from within. Employees who have been with a company for a number of years, especially if they started early as an intern, are more likely to stay with that company. Internship and apprenticeship programs helping train the next generation of leaders for a company will pay dividends in the form of a reliable talent pipeline full of individuals invested in that organization’s success. These programs can also help bring in diverse talent, like Zurich’s two-year apprenticeship, which covers tuition for apprentices to complete an associate's or bachelor's degree and guarantees job placement after the program.
2. Demonstrate job security and growth trajectory. With the current uncertainty in the economy and the recent wave of tech layoffs, there’s a stronger interest for people to stay within their roles. It’s important for employers to speak to career trajectory and learn what is driving the latest generation of workers and make that front and center in recruiting efforts. Insurance is all about mitigating risk so it’s important to spotlight the stability of the industry.
3. Invest in diversity initiatives. It’s important that diversity is upheld and woven throughout all of these recruiting efforts. Again, internship and apprenticeship programs can help here. According to Brookings, such programs have shown promise in fostering innovation, saving costs, hiring for hard-to-fill roles and building a more diverse workforce. Just look at the fantastic work Allstate is doing to increase diversity, remove barriers and establish a new pipeline of talent in the asset management industry.
4. Partner with others in the industry to advance change. A rising tide lifts all boats, and insurance companies working together to encourage more people to enter the industry can only help everyone involved. Organizations like the Insurance Careers Movement are doing the work, putting on conferences and building bridges throughout the industry, making it easier for people to find a career in insurance.
5. Utilize data and technology to engage and measure recruitment effectiveness. Bringing in the latest in recruitment and management technology to track the effectiveness of your strategic recruiting practices is essential. You’ll need a clear way to see the results in order to continue to optimize your efforts and earn executive buy-in for these important recruitment methods.
A more strategic approach to recruiting and training talent is in order for the growing insurance industry, worth an estimated $1.4 trillion in the U.S. alone. The good news is that insurance companies are well-positioned to attract talent with a clear story of job stability, and they have the necessary tools to revamp their recruiting processes.
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By Ahva Sadeghi - Forbes Councils Member
Forbes Human Resources Council
February 24, 2023
Ahva Sadeghi, Co-founder and CEO of Symba.