The insurance industry is continuing to face a candidate-driven labor market. The overall U.S. unemployment rate reached a near half-century low this year, holding steady at around 3.7 percent. Unemployment in the insurance industry is virtually nonexistent, at 1.6 percent in July.
However, insurers continue to add jobs. According to data from the Bureau of Labor Statistics, finance and insurance has seen an average of nearly 284,000 job openings throughout the past 12 months. The recent “2019 Q3 U.S. Insurance Labor Outlook Study,” conducted by The Jacobson Group and Aon plc, also highlights continued employment growth.
According to the study, 62 percent of insurers and 57 percent of property and casualty insurers plan to increase their staff sizes in the next 12 months. This is comparable to the 63 percent of both total insurers and property and casualty insurers who indicated plans to increase staff in the July 2018 iteration of the study.
However, both groups saw greater growth than originally anticipated during the past year. The total industry grew by 1.31 percent, compared to an expected rate of 0.6 percent. Property and casualty grew by 0.93 percent, versus a planned 0.47 percent. If the industry follows through on the hiring plans depicted in the most recent study, we’ll see a 1.34 percent increase in total insurance employment and a 1.16 percent increase in property and casualty employment during the next 12 months. This growth will undoubtedly continue to fuel new jobs and increase demand for top talent.
Study participants indicated that their anticipated hiring growth is primarily due to projected increases in business volume, followed by business and new market expansion, and currently understaffed areas. Property and casualty insurers said technology positions are their greatest hiring need for the next 12 months, followed closely by claims roles. It should come as no surprise the industry is seeing a need for technology professionals, as many insurers are undergoing modernization efforts and automating both internal and customer-facing processes. However, while technology is impacting and transforming many aspects of the industry, the continued high demand for claims professionals demonstrates the function is evolving and continuing to play a vital role in today’s modernized environment.
The study also found that claims roles are only moderately difficult for insurers to fill. However, given the demand for claims talent and the industry’s tight labor market, talent strategies will need to evolve to stay competitive. As baby boomers retire and insurers compete with other industries for talent, it is vital for property and casualty insurers to fulfill talent needs and retain claims professionals. In today’s candidate-driven market, standard recruiting and hiring practices must be revamped. There are several ways insurers can connect with new claims talent, expand their candidate pools, and create work environments that retain key employees.
Attract Tomorrow’s Talent
Roughly 23 percent of claims professionals are 55 and older, which means they are nearing or have already reached retirement age. The median age for individuals working in claims is 43, slightly higher than the median age of the total workforce (42.2). As current leaders prepare to retire, the industry must focus on hiring young talent while concurrently grooming mid-level professionals to take over key positions. This can be accomplished by focusing on attracting and retaining millennials (who currently comprise more than a third of the workforce), while also considering Generation Z, whose oldest members have recently entered the job market.
These young professionals are often drawn to different aspects of jobs, and potentially different companies, than their predecessors. Millennials are generally collaborative and curious. They seek roles that provide flexibility and a sense of purpose. Claims careers fulfill many of these needs and insurers are responsible for sharing how positions within the field align with young professionals’ current and future goals. This may mean raising awareness of how claims professionals make an impact and how they help individuals in times of need.
When speaking with prospects, share that claims is much more than working in a call-center environment, and provide examples of potential career paths. Motivate younger employees to stay within the claims space by providing them with mentors and other role models, professional opportunities, and clear visions for the future. Even if individuals have different long-term career goals, positions within claims offer valuable industry insight and can set them up for successful careers in other facets of the insurance industry.
Provide a Path
Professional development opportunities and clear career paths are keys to retaining younger generations. Eighty-seven percent of millennials consider professional development to be very important. Of the millennials who plan to leave their organizations within the next two years, 28 percent say it is due to lack of learning and development opportunities. However, this is often an area employers neglect or deprioritize, especially during heavy workloads or when teams are short-staffed.
By focusing on development, insurers are able to engage and retain employees while helping fill mid-level skills gaps. Providing employees with established goals, development plans, and measurement tools increases efficiency and results in more knowledgeable and effective teams.
For the past several years, insurers were operating with lean departments and limited training programs. In today’s competitive market, insurers have the opportunity to revisit these programs and provide internal staff with the necessary training to step into roles that may be left vacant when more seasoned employees retire.
Focus on Essential Skills
Technology is touching all areas of the industry, but modernization is also making soft, or “human,” skills increasingly important. As automation and artificial intelligence (AI) streamline time-consuming tasks, claims professionals have more capacity for strategy, analysis, and customer-facing work.
Automated processes and enhanced capabilities mean claims professionals are in touch with customers more quickly than ever before. As a result, these professionals are talking to policyholders almost immediately after a loss has occurred. Empathy, communication, and other human skills are vital during these times, yet are innate traits that are often difficult to teach. Similarly, as data becomes more readily available, human talent is required to work alongside AI and analyze information to make it useful and applicable. By focusing on these and similar skills, employers are more likely to identify professionals who will be successful in the future of work, regardless of technological transformations.
Expand the Talent Pool
In a tight labor market, competition for qualified candidates is fierce. Employers are tasked with translating desired transferable skills into position descriptions and proactive recruiting. Insurers must get creative and look outside their standard sourcing parameters by placing less emphasis on candidates’ past titles and more focus on their skills and attributes.
By identifying which skills are necessary for success in a role, and which can be learned, hiring managers are able to focus on the qualifications that matter most for success. This may mean avoiding laundry lists of requirements when writing position descriptions and focusing on the core skills necessary. This will help expand the potential candidate pool and encourage individuals to apply who are capable and qualified, but who may not have checked every box in terms of required experience. For instance, when searching for claims adjusters, emphasize skills like communication, problem solving, and time management rather than a specific number of years working in claims or even insurance. These and other traits are often necessary for success and cannot be easily learned or replicated by machines. Someone who has specific skills may be better suited for a role than an individual who has spent a certain amount of time in the industry.
Along with skills-focused position descriptions, considering remote employees can also build broader candidate pools. This is especially true for smaller geographic markets, where top talent may not be willing to take on a long commute or uproot families. Telecommuting arrangements enable employers to reach professionals with specific skill sets regardless of geographical restraints. Being open and willing to look outside of traditional candidates can expose claims teams to a wealth of talent that may have been previously overlooked.
In today’s climate, job seekers—especially those who are highly qualified—often have multiple job offers. This means your first offer must be strong enough to stand up to competition. Remember that, while a role and company may be a perfect fit for a candidate, the compensation should be equally compelling. Monetary compensation will always be important, yet it is only one part of the overall package. Employers must be competitive with base salary, bonuses, and benefits. Additional perks such as flexible hours and work environments may help meet candidates’ needs and influence their decisions.
Continually reevaluate your compensation packages to ensure you are remaining competitive in an evolving marketplace. Seek input from employees by maintaining an open dialogue and asking what benefits are important to them or where they see holes. This can help with retention efforts and also ensure current and potential candidates look upon your organization and role favorably.
The candidate-driven market is showing few signs of letting up. As the insurance industry continues to expand, insurers must reevaluate their approaches to attracting and retaining high-performing claims talent. By understanding what is important to candidates, expanding the talent pool, and committing to ongoing development, insurers will be prepared to stay competitive in the future.