While sluggish salaries, a lingering pandemic, and rising inflation are the culprit for shocking unemployment statistics for most industries, the insurance industry is bracing itself as 50% of the Insurance workforce is expected to retire by 2028. The Bureau of Labor Statistics’ report published this month hit 50-year lows, and it’s a sobering moment for companies looking to hire.
Initial unemployment claims plummeted to the lowest levels since 1968. Creeping upward month to month, the insurance sector’s unemployment rate is daunting: 1.5% (down from 1.8% the previous month).
To compete for top talent, companies are responding by increasing recruiting spending and pushing salaries and wages upward, automating some recruiting activities, and shifting recruiting efforts to external sources.
What’s propelling the pay hikes? Don’t blame inflation, says Catherine Hartmann of WTW, the company that conducted the survey. “Labor shortages, and not inflation, are the primary driver of growing salary budgets,” Hartmann said.
But the squeaky job market isn’t the whole story, either, according to this budget survey. Pay increases are larger in 2022 partly because they fell too short last year, says 46% of businesses surveyed in Payscale’s 2021–2022 budget survey.
According to a survey of 1,004 companies, 34% of U.S. insurers are prepping for greater pay increases through 2022 to keep and hire employees. Companies say they are budgeting overall increases of 3.4%, on average, up from their previous 3% projections midyear in 2021.
It’s costing a lot more to hire and retain talent in 2022.
Worker scarcity is obligating companies to spend more on recruiting in a time their own human resources departments are critically short-staffed. Businesses are reacting with improvements in process efficiency with technology and using AI software to chat, source, screen, schedule, says the Society for Human Research Professionals (SHRM). But the biggest shift is toward external recruitment.
“Heads of HR are telling me that this is the hardest time to find recruiters and salaries for recruiters have skyrocketed,” Kerry Gilliam, VP of Marketing for Jobvite. Gilliam observed that companies that have never considered using external recruitment sources are now looking outside their HR departments to hire.
The next unemployment report to be released on May 6th will reflect April’s numbers. Meanwhile, companies are building strategies to find what works in the shifting landscape of scarce workers. More robust salaries and recruitment budgets will be the norm for now.
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