Let’s face it. Today’s society is always on the move, looking for the next best thing, easily bored by the same-old-same-old.
So it stands to reason that people in their 20s and 30s would want to flock to the insurance industry in search of a career.
Few other vocations offer the challenges posed by the ever-shifting landscapes, the steady stream of change and the vast learning opportunities that are intrinsic to the insurance sector. From emerging products and services, natural catastrophe and terrorism risk, often surprising regulatory and legislative actions, and the fast-paced environment of the financial markets, a career in insurance seems like it should be on the top-10 list of every college student.
Unfortunately, such does not appear to be the case.
Indeed, insurance company executives are becoming acutely aware of statistics that show that there’s a talent crisis ahead. They see the slow drift of baby boomers entering retirement. They see the best and the brightest young recruits gravitate toward other sectors of the financial services industry. They realize the loss of institutional memory and experience as staff supporting critical business functions retire.
All is not lost, however, as forward-thinking insurers are combating the generational talent issue by working to retain a skilled work force at all levels and by customizing the working environment to best attract the interests of younger workers.
Boomer Retirements
Consider that in the current climate, the average life insurance agent is 47 years old and nearly 60 percent of all agents are over the age of 45. Further, according to the Life Insurance and Market Research Association, the sector has recently seen four-year retention rates drop to a 30-year low. And the number of new producers hired at agency-building companies has fallen to a disheartening 20 percent since 2001.
The first wave of baby boomers is set to begin retiring this year. But the greatest number of retirees will be seen between 2012 and 2025.
While the drop-off of baby boomers may be disheartening to insurance employers, there is a vast talent pool from which to draw. Approximately 39 million adults make up for Generation X, born between 1965 and 1982, while Generation Y, born between 1983 and 1997, is comprised of about 70 million adults.
The first step toward success in recruiting members of these two groups is to understand the expectations that they bring to the table. While each generation has unique characteristics, the two groups share similarities. These include the wish to strike a comfortable work-life balance, be challenged and engaged in their work, be assured of their earning potential and to have the freedom to be creative and work “outside the box.”
Memory keepers
So, the question is whether the insurance industry can rise to the challenge of filling the talent gap. And if so, how.
One answer: Don’t let them leave. Most people remain active and vibrant many years past the average retirement age. They just want a bit of a break. Give them one, by opening up consulting opportunities and allowing for flexible work schedules and leadership roles in mentoring their younger counterparts.
Insurers might also employ more aggressive recruiting measures, such as internships and outreach to high schools. Internally, companies should have succession plans and training programs that bring less experienced staff up to speed. They might also recruit from outside the industry.
Leading insurers are making talent management a top priority that involves all sectors of the organization. They are sizing-to-fit themselves to the younger talent pool rather than the other way around. And they are releasing tradition in favor of flexible work arrangements, enhanced career options and incentives to retain older workers.
With forward-looking management practices in place, insurance companies can position themselves to make the hard sell, which, given the myriad and exciting challenges the industry offers, shouldn’t be all that difficult to sell.
Howard Mills, director and chief advisor of the Insurance Industry Group at Deloitte LLP, is a former superintendent of Insurance for New York State.