3 key talent retention and management strategies to help insurance navigate the retirement crisis
- As a wave of retirements fuels an industry-wide talent crisis, insurance companies need to embrace new talent retention and management strategies to thrive.
- Insurance firms should appeal to talent by facilitating the transfer of institutional knowledge, creating a vibrant organizational culture and leveraging both new technologies and timeless tools like mentorship.
- To successfully implement a more effective talent strategy, lean on an outside advisor for support.
The insurance industry is facing a talent crisis as experienced workers near retirement age without enough rising professionals to fill their shoes. This can leave firms struggling to fill roles or pass on vital institutional knowledge.
However, taking a focused, strategic approach to talent retention and management inside your insurance business can help you navigate this challenging moment for the industry. Keep reading to learn more.
What’s fueling the insurance industry talent crisis?
The insurance industry is facing a worrying talent shortage, which has become a pressing issue for many organizations. A number of factors are at play in the current state of affairs, including:
- An aging U.S. workforce: A significant portion of the current workforce is nearing retirement. This includes a large percentage of the current insurance workforce. These retirements will leave a substantial gap in experience and knowledge.
- Continued effects of the “great resignation”: The pandemic prompted many professionals to reevaluate their careers, leading to a wave of resignations. This has left many positions unfilled, exacerbating the talent gap.
- An industry perception issue: Insurance is often viewed as less exciting than other industries, including fintech or other financial services. This perception makes it challenging to attract younger talent. Compounding the issue, many employees feel that traditional career paths in insurance are limited, leading to a lack of engagement and motivation. Younger workers seek diverse experiences and growth opportunities.
- Emerging skills mismatch: As the industry evolves with technology, there’s a growing need for skills in AI, data analysis and digital tools. However, many insurance providers are voicing concerns over potential candidates lacking these skills, making it difficult to fill roles.
- Cultural and diversity gaps: The industry continues to struggle with diversity and inclusion gaps, which can deter some high-potential candidates. Companies that fail to reflect the diversity of the communities they serve may find it harder to attract new talent.
In order to stay competitive in the industry, insurance companies need solid talent retention and management strategies in place to overcome these substantial obstacles. What do some key strategies look like?
1. Build a foundation for transferring knowledge
Whether your organization is facing turnover or succession issues, it is critical to put strategies in place to document job duties and enhance knowledge transfer. That helps you avoid losing essential institutional knowledge to retirement and also boosts newer employees’ job satisfaction, as employees who feel they have received training and support are more likely to stay.
Key steps here include:
Create standard operating procedures
Have clear, accessible documentation for team members that supports their job success. AIG maintains a comprehensive digital library of their standard operating procedures that is regularly updated, ensuring all employees have access to the latest procedures and job expectations.
Leverage technology
Use video, blogs and other technologies that allow users multiple ways to document. If available, seek to implement tools like knowledge management systems to store and update job descriptions and processes.
Host regular knowledge-sharing sessions
Organize workshops or lunch-and-learns where employees can share insights and best practices. Communicate to employees that these are important scheduling matters and ensure that leadership is actively participating.
Liberty Mutual hosts monthly “knowledge exchange” meetings where employees present case studies or innovative solutions, promoting a culture of continuous learning.
Implement feedback mechanisms
Establish channels for employees to provide input on documentation, ensuring it remains relevant and useful. Progressive Insurance uses employee surveys to gather feedback on documentation processes, allowing for real-time updates and improvements based on employee experiences.
2. Create a people plan to appeal to rising talent
How can you make your organization a magnet for rising talent? Consider that skilled professionals don’t just value financial compensation, but growth opportunities, flexibility and culture when choosing where to work.
To stand out, your organization needs to appeal to both current and potential employees by taking action to:
Highlight career growth
Emphasize opportunities for advancement and skill development within the company. Lay out an employee journey map that is available to all team members.
Geico showcases success stories of employees who have advanced from entry-level positions to management roles, emphasizing clear career paths.
Understand flexible work environments
For many organizations, local talent may not be available. Can remote work options or flexible hours appeal to different generations and demographics?
MetLife offers hybrid work options, allowing employees to choose their work environment, which is particularly appealing to younger generations seeking work-life balance.
Foster an engaging company culture
Foster a culture that values diversity, inclusion and innovation. These concepts are necessary for attracting the widest range of talent to fill roles.
Chubb promotes a diverse and inclusive workplace, hosting events that celebrate various cultures and perspectives, making it attractive to a broader talent pool.
Embrace social responsibility
For some segments of the workforce, showcasing the organization’s commitment to social causes or giving back to stakeholders may be important.
Travelers actively participates in community service projects and sustainability initiatives, appealing to younger employees who value corporate social responsibility.
3. Lean on both technology and people when training the new generation of insurance professionals
From a talent retention and management perspective, forward-thinking insurance companies will typically benefit by embracing both technology and human relationships as training tools. Consider an approach that relies on both:
New tools like AI
Highlight the importance of integrating AI and data analysis tools into training programs. You can use simulations and AI-driven platforms to provide hands-on experience and encourage a culture of ongoing education through online courses and workshops.
A company like Allstate uses AI-driven platforms for training, allowing new employees to engage in virtual simulations that mimic real-world scenarios, enhancing their decision-making skills.
Timeless mentorship programs
Pair seasoned employees with new hires to facilitate knowledge sharing and practical insights. State Farm has implemented a mentorship initiative where experienced agents guide new hires through the complexities of insurance products and customer interactions, fostering a supportive learning environment.
Next steps: How should insurance firms implement a smarter talent retention and management strategy?
By following some of these best-in-class examples and applying these lessons to your own talent retention and workforce development efforts, you can foster an environment that is primed for growth. Remember, your employees are one of your most valuable resources — the harder you work for them, the stronger your business will be.
Here’s how to get started:
1. Consult an advisor: Lean on a third-party advisory firm that understands both human capital management and the insurance industry to help you implement a smarter talent retention strategy. Your advisor will complement your internal capabilities, so your organization can evolve faster and more effectively.
2. Assess your current talent retention strategies: Working with your advisor, assess your current approach to talent management and retention with an eye on identifying areas for improvement. What are the gaps in your strategy that need to be filled?
3. Make focused improvements: Adjust your talent strategy to incorporate some of the ideas explored here, emphasizing whatever makes sense for your specific business and organizational needs.
How Wipfli can help
We advise insurance firms on managing costs, improving performance and growth. Let’s talk about your goals and how we can help you achieve them. Start a conversation.
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