Insurance Industry

Talent Crisis Remains a Challenge

Insurance industry eyes millennials as the answer to turnover and coming retirements.
By: | July 11, 2016 • 4 min read

For at least the past decade, many experts have been warning that the insurance industry is facing a growing talent crisis.

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An increasing turnover rate combined with a wave of retirements and fewer young people coming into the business is putting more pressure on insurers to maintain a qualified workforce.

Some in the industry say the millennial generation offers untapped available talent for insurers who are willing to train new employees.

And while limited growth opportunities at many companies may contribute to turnover, fostering a culture of flexibility and stability can go a long way in encouraging employees to stick around.

Greg Jacobson, co-CEO, The Jacobson Group

Greg Jacobson, co-CEO, The Jacobson Group

According to the 2015 CompData Survey, the total turnover rate for the insurance industry is 12.2 percent. While that’s below the 16.7 percent average for all sectors, the insurance industry’s rate of turnover has been on the rise.

Greg Jacobson, co-CEO at The Jacobson Group in Chicago, said that while the insurance industry’s rate of turnover has been lower than that of the general economy, it is concerning because insurers are having difficulty replacing workers that leave.

McKinsey & Co. reports that by 2018, more than a quarter of the insurance workforce will be nearing retirement while according to the Bureau of Labor Statistics, less than a third of insurance employees are under the age of 35.

“There is a significant number of retirements and people leaving the industry that is having an impact.” — Greg Jacobson, co-CEO at The Jacobson Group

“There is a significant number of retirements and people leaving the industry that is having an impact. There’s [difficulty] in replacing people who have significant amounts of knowledge, particularly in the ranks of middle and upper management,” Jacobson said.

These changes are happening at a time when advances in technology are changing the nature of jobs in the industry.

John Belyea, chief operating officer, Moore McLean Insurance Group

John Belyea, chief operating officer, Moore McLean Insurance Group

John Belyea, chief operating officer at Moore McLean Insurance Group in Toronto, said the elimination of low level clerical jobs has reduced some opportunities that were suitable for recruiting and training new talent.

“Entry level” employees in the industry now need a higher skill set with a bigger premium on experience than there used to be, he said.

“Those jobs were a wonderful entry for people in the business. We always used them to bring someone in, watch them perform there, and then [move them up],” Belyea said.

Loretta Worters, vice president of communications for the Insurance Information Institute (III), said the industry is “unprepared for the tremendous talent drain.”

It is estimated that more than half of the industry workforce is age 45 or older with a quarter of them expected to retire by 2018. The III projects there will be at least 400,000 open positions in insurance by the year 2020.

“Unfortunately, young graduates and millennial employees have this view of the insurance industry that is boring. It’s rare that a young person who [earns] a business degree considers insurance.” — Loretta Worters, vice president of communications for the Insurance Information Institute

Insurance companies need to do a better job of promoting the opportunities in the industry, Worters said, especially to the millennial generation, which has the numbers to fill the void.

Loretta Worters, vice president of communications, Insurance Information Institute

Loretta Worters, vice president of communications, Insurance Information Institute

“Unfortunately, young graduates and millennial employees have this view of the insurance industry that is boring. It’s rare that a young person who [earns] a business degree considers insurance,” she said.

Belyea said his organization’s focused effort to recruit millennials has been paying off because it is willing to hire individuals that lack insurance experience as long as they bring a strong work ethic and fresh attitude into the firm.

Another issue fueling turnover is that the industry is not “high growth” or “sexy,” he said.

Because insurers have relatively stable businesses, limited growth means they can’t always produce new opportunities for employees that want to climb the ladder. For many professionals, the only way to rise in the ranks is to leave the company.

Yet some companies see little turnover.

Denise Hempe, vice president and manager of human resources at FM Global, said the company hires roughly 375 people per year and has a robust succession planning process to replace retirees.

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Hempe said the company has been recruiting college grads, many of which she said are very interested in companies that can offer a long career. Millennials are also especially interested in flexibility, she said.

“Offering a flexible work environment is critical and the insurance industry is well positioned to offer that kind of workplace,” she said.

Belyea said they are trying to combat the loss of employees by creating an environment where the firm not only encourages professional development but creates opportunities and promotes from within.

He said that insurers that provide superior benefits and work culture may make employees “more patient” and willing to wait on advancement opportunities even when they’re currently not available.

“The little things you do can have an enormous impact on turnover because if they’re happy, they may be more willing to wait for that opportunity to come around,” Belyea said.

Craig Guillot is a writer and photographer, based in New Orleans. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]