The past 18 months have brought on new challenges and evolving workplaces for virtually all industries. Now, in the midst of what many are calling “the Great Resignation” of the workforce, the insurance industry is experiencing more of a “Great Reshuffle.” Insurance professionals who were holding off on career moves due to economic uncertainty are exploring their options and pushing forward with their plans. As professional values and motivators shift, employees are reevaluating their goals and employer expectations. Savvy insurers are using this time to their advantage, working to better understand their competition as well as the current state of the labor market, and looking at how they can best meet employee needs in a continually changing environment.
According to the U.S. Bureau of Labor Statistics, the unemployment rate for insurance carriers and related activities has steadily risen since April 2021. In July 2021, industry unemployment reached 4.2%, its highest since September 2020, and the overall U.S. unemployment rate was 5.4%. The BLS also reported property and casualty carriers lost 14,000 roles from January 2021 to July 2021. However, these numbers may not tell the full story, and are likely to adjust as individuals settle into new roles and the activity brought on by “the Great Reshuffle” begins to slow. The results of the recent Semi-Annual Insurance Labor Outlook Study, conducted by The Jacobson Group and Aon plc, paint an optimistic picture for moving forward.
For the past 12 years, the study has surveyed carriers from across all industry verticals to provide insights into labor market trends and staffing expectations for the coming 12 months. The study’s 25th iteration took place in July 2021 and includes property and casualty insurers’ staffing outlooks for the next year, as well as what hiring managers can expect as they recruit and retain claims talent.
Current State of the Insurance Labor Market
In the Q3 2021 Insurance Labor Outlook Study, 35% of P&C carriers reported that they increased their staff size since July 2020, while 40% maintained their headcounts. In the next 12 months, 51% of P&C carriers plan to increase staff, 44% plan to maintain their current staff size, and just 5% plan to decrease staff. The percentage of P&C companies planning to increase staff is roughly the same as July 2020 and about six percentage points less than reported in January 2021. However, the percentage of companies planning to decrease staff has also dropped, by about 12 and four percentage points, respectively. Across all industry verticals, this decrease is led by large insurers, as just under 3% of small- and medium-sized insurers are planning staffing reductions.
P&C respondents also indicated that they plan to either increase or maintain revenue growth in the next year. More than 80% plan to increase revenue, while no P&C carriers reported plans to decrease revenue, even those that plan to reduce staff. In these cases, it’s likely carriers are encouraging early retirements or not backfilling roles left open due to standard attrition. Given the remote environment and investment in technology, many insurers are seeing productivity increases among current staff.
In regard to claims, P&C carriers shared that they are at least moderately likely to increase claims staff in the next 12 months and more likely to increase claims staff than they were in January 2021 and July 2020. In fact, claims was the second most in-demand function for P&C carriers, following only technology roles. For those P&C carriers planning to add headcount within claims, about one-third are most likely to add entry-level employees, and two-thirds are most likely to add experienced ones. None of the respondents indicated they are most likely to hire management or executive-level claims staff in the coming year.
However, these entry-level and experienced employees are proving challenging to find. Difficulty recruiting P&C claims professionals is reported as 5.8 on a 10-point scale, which is the highest for claims in the study’s history. From what we’re seeing, this is largely due to satisfied claims employees being unwilling to make lateral moves without significant incentives.
Building a Strong Team of Claims Professionals
While P&C carriers reported that they are likely to add claims staff, many are attempting to recruit individuals from one company to another for essentially the same roles. Lateral moves are challenging, as many claims professionals who are happy with their current employer are reluctant to take new positions unless there are substantial increases in compensation, titles, or flexibility. It’s important for claims leaders to focus on how they can best meet current employees’ needs, stay competitive within the marketplace, and build a bench of young talent to fill future claims positions from within.
Rethink location requirements. As individuals readjust their priorities within both their professional and personal lives, candidates are viewing flexibility as an expectation rather than a perk. Our study found that as offices reopen, 76% of P&C carriers are planning to offer occasional work-from-home opportunities and 44% are planning to offer full-time remote work. Nearly half of respondents will offer flexible hours, and just 4% are not planning to make adjustments to their pre-pandemic work arrangements.
For many claims professionals, not being able to work from home full-time has become a deal-breaker when considering new positions or deciding whether to stay with their current employers. During the pandemic, individuals proved that they can be effective and productive working from their homes. The idea of relocating for a role has become antiquated, and even requiring individuals to go to the office two days a week can drastically decrease your pool of interested candidates.
Instead, companies should determine if and why the role needs to physically be in the office and develop alternative solutions for creatively meeting those needs. Perhaps employees can commute to the office once a month or for occasional in-person meetings, rather than being expected in the office on a regular basis. Not only will this flexibility contribute to employee satisfaction, but also it will create a potential talent pool that transcends geographic boundaries.
Build a bench of young talent. As lateral moves become less desirable among today’s claims professionals, insurers should consider how they can create roles tailored to junior-level individuals looking to grow in their careers. Build position descriptions that highlight growth opportunities and prepare young professionals to step into more senior-level positions.
In our study, P&C carriers shared that they were most likely to hire experienced claims staff, followed by entry-level. However, by shifting that mentality and focusing on hiring and developing entry-level employees, organizations can invest in young talent as well as prepare for the future. According to the BLS, the median age of claims adjusters, appraisers, examiners, and investigators was 42.3 in 2015. This number rose to 44.5 in 2020. As the industry ages, it’s vital for organizations to bring in young talent who will eventually fill the positions left vacant from retirements.
Look to new high school and college grads to fill entry-level roles and share how claims can provide a springboard into the greater insurance industry. As demand for entry-level talent becomes tighter across all industries and hourly service jobs increase their pay, recognize you may be competing with industries you did not previously consider. Communicate how claims positions can grow into longer-term careers, with relatively high pay and advancement opportunities.
You may also need to rethink how you attract this young talent and adjust your strategy to reach them where they spend their time. It’s less common for new graduates to peruse job posting sites or navigate to an employers’ website. In addition to these traditional tactics, consider leveraging social media platforms. Describe open roles in less technical and more human terms, focusing on a role’s impact and the skills desired for success. Highlight your team members and share recruiting videos that showcase the personalities of your organization and its people. Leverage current young professionals within your organization as ambassadors to help share open positions on their social media feeds to reach additional untapped talent.
Retain current employees. There is a lot of movement within the industry, making well-defined retention strategies paramount. Recruiting new talent is difficult and costly; reframe your approach to ensure you are putting as much thought and effort into keeping current staff as you are into recruiting new team members.
First, take a fresh look at your overall compensation and total rewards packages. Are they competitive with the greater industry? In addition to re-evaluating compensation, take the time to understand what is most meaningful to your employees. This will likely vary by individual. Some may want more flexibility; others are focused strictly on salaries. Professional development and advancement opportunities could be the highest priorities for other team members. Be proactive in understanding how you can best meet employees’ needs while still achieving your team’s business goals.
Additionally, consider performance reviews a two-way street. Rather than focusing only on the employee’s performance, ask how you are doing as an employer. Are individuals happy at your company? Are they satisfied with their role and responsibilities? How could you do better? What will make them stay for the long-term? By understanding your employees’ motivators and how they currently feel in their positions, you can better prevent them from being hired by the competition. Keep in mind that even if they seek a counteroffer before accepting a new role, it’s too late. Place as much energy into your current employees’ job satisfaction and loyalty as you do your recruitment efforts.
The employment landscape is continuing to shift, so talent strategies must be reevaluated and refreshed to stay competitive in the current environment. By proactively building your bench strength, focusing on employee needs, and developing intentional retention plans, your team will be set up to come out ahead in “the Great Reshuffle.”