As the ‘baby boomer’ generation moves towards retirement, there is predicted to be a looming talent crisis across the insurance industry if firms continue to unsuccessfully attract and retain the top talent in the workplace. Data has suggested that between 25 and 40% of those employed in the insurance industry will retire over the next few years,[1] yet there is a concerning lack of younger talent to move into these management positions.
If the talent gap continues to grow, it is possible that younger talent will leave if they do not have a clear path to advancement and are not being adequately trained. As Deloitte has published, ‘more millennials than ever – 49% – would, if they had a choice, quit their current jobs in the next two years’,[2] and younger generations have a reputation for being more likely to job hop in comparison to their older counterparts. However, it is thought that this is because millennials want to be able to feel a sense of purpose in their workplace,[3] with the most frequently cited reason for leaving a job being a lack of opportunities for career advancement.[4] Due to this, it is now more important than ever for insurance firms to attract, and retain, the top talent in the market.
In addition to millennials feeling as though they are making a genuine impact, younger generations also value their work-life balance and desire more flexible working hours. As a result, companies that fail to offer attractive benefit packages to their employees will struggle to retain the top talent. Undoubtedly, promoting a flexible working environment is likely to not only attract young talent, but also result in being better able to retain women and middle managers in insurance. Reducing the so-called ‘middle management gap’ is essential in minimising the effect of current employees retiring over the next few years.
Diversity and inclusion at the forefront
Additionally, promoting diversity and inclusion within insurance is a key issue for millennials, with 47% prioritising D&I when actively searching for potential employers.[5] As a result, insurance companies must encourage more diverse candidates by promoting a more inclusive working culture. Statistics published by the ABI confirm that firms are losing female talent at the executive level, whilst 55% of those who enter insurance are female, only 21% of executive positions are held by women.[6] Encouraging flexibility, family-friendly work arrangements and a positive culture is significant in order to retain talent at the more senior level.
Technological advancements
Alongside creating a more attractive working environment, insurance firms need to demonstrate that they are embracing technological change and innovation. Currently, it is seen as a formal working environment, that doesn’t positively compare to other more modern and technologically driven workplaces.
As insurers begin to adopt modern technology into their businesses, it is possible that young talent may be more inclined to consider a career in insurance. As advancements in Blockchain and AI begin to rise, companies will need to appeal to individuals with skills in technology and data science. Those firms that can retain and develop these skills will enable them to stay ahead of the curve, and advertising for and voicing these skillsets will likely attract a younger and more digital-savvy workforce. In order to further engage the correct talent, roles must be more aligned to suit the interests of millennials, and firms must move towards requiring a more forward-thinking and innovative skillset from potential hires. Additionally, actively promoting and working towards a more modern working environment is essential in altering the current perceptions that are associated with the insurance industry.
Brand image
There are certainly preconceptions surrounding the working environment within the insurance industry that are thought to detract the top talent. For example, The Hartford’s Millennial Leadership Survey shows that only 4% of millennials are interested in having a career in insurance, in comparison to 36% of millennials having a desire to work in education.[7] Insurance is stereotyped as backwards, slow moving and lacking in innovation, and these perceptions must be addressed, and rejected, if the industry is to attract high calibre talent.
However, interestingly, three-quarters of millennials working in the insurance sector have expressed that they have no desire to change career. This is impressive, as not only are millennials engaged when working in the insurance industry, but they also discover that it meets many of their desires and requirements in a career. Certainly, as confirmed by the survey published by Vertafore,[8] the industry ticks many of these boxes, but the issue remains with the fact that these benefits are not being communicated effectively to the top talent outside the market. The view of millennials working inside insurance is certainly not reflected by the negative perceptions of those outside the industry. Consequently, the industry fails to successfully promote itself and its benefits adequately.[9]
Visibility
In order to challenge these misconceptions, insurance firms must also make themselves more visible to younger talent. There is a clear lack of understanding of the variety of opportunities and career paths the industry can offer, and as a result, young people aren’t applying for job vacancies due to a lack of awareness about the industry. Currently, in comparison to consultancy and banking companies, insurance firms do not advertise themselves very well. As a result, it doesn’t appear to be an option for younger talent, and most students do not leave school or university thinking they want to enter insurance. As an article published by Ecclesiastical mentioned, it would be beneficial to see insurance firms advertising more widely at universities and colleges in order to showcase the roles available in an exciting industry.[10]
Overall, the problem appears to lie both with retaining diverse talent at the executive level and attracting young and talented individuals into the industry. Consequently, in addition to becoming more effective at communicating the opportunities available to potential candidates, the industry must also rethink its brand image and create a more appealing working environment that will not only attract, but also retain, the top talent.
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[1] EY, ‘Talent Strategy: Designing a Workforce for the Future of Insurance’, 2017
[2] Deloitte, ‘The Deloitte Global Millennial Survey 2019’, 2019
[3] LinkedIn Talent Blog, ‘LinkedIn’s Head of HR on the One Thing Millennial Workers Care About Most’, 2015
[4] LinkedIn Talent Blog, ‘New Insights That May Make You Rethink How You Recruit Millennials’, 2016
[5] Eightfold.ai, ‘6 Strategies for the Insurance Industry to Attract and Retain Millennials’, 2019
[6] ABI, ‘4 in 5 Insurers Have Diversity Strategies but Only 1 in 5 Top Jobs are Held by Women’, 2018
[7] The Hartford, ‘2015 Millennial Leadership Survey’, 2015
[8] Vertafore, ‘Millennials in Insurance’, 2018
[9] Raconteur, ‘Insurance Needs a Major Rebrand to Attract New Talent’, 2019
[10] Ecclesiastical, ‘Attracting the next generation of brokers’, 2018