THE RESULTS ARE IN & MOST INSURANCE LEADERS ARE RECRUITING ALL WRONG.
BAD ASSUMPTIONS ARE CRUSHING YOUR RECRUITING RESULTS.
We reached out to leading insurance employers with this question –
“How do you plan to manage the talent shortage in the next ten years?”
Most declined to share their strategies. ☹ Go figure.
The competition for qualified insurance talent is fierce, and there’s good reason it’s called the “battle for talent.” Nothing new in the insurance industry, but with an annual average of 1% industrywide unemployment rate in 2023, no-one has cracked the code.
Hiring leaders are beginning to see our new reality: candidates no longer respond to traditional recruiting methods. It’s a rude awakening as companies find themselves abandoned and their talent pipeline empty.
Turns out, we’re probably recruiting all wrong.
Peter Capelli, Author, Professor, and Director for Human Resources at Wharton School, used data from the U.S. Census and LinkedIn to determine that current hiring methods are failing us.
We’re operating on outdated assumptions about the behavior, motivations, and priorities of today’s candidates, says Capelli.
And these bad assumptions are sabotaging our best recruiting efforts.
Our most common bad assumptions?
#1: We need a bigger pool of active market talent.
REALITY: Yes, but keep in mind that a majority of people who took new jobs beginning in 2019 weren’t actively “looking.” Someone reached out to them, according to Census data cited in the Harvard Business Review.
The practice of posting job openings only to build a pool of qualified candidates is a bad idea, Capelli warns. The results? Alienated applicants, wasted administrative costs, and social media backlash that can damage your employment brand.
SOLUTION: Building smaller & higher quality pools of passive candidates will yield more, and better, team hires. Jamming more people into the recruiting funnel shouldn’t be the goal.
Instead, cultivate passive candidates using internal resources and outside recruitment specialists who understand business.
#2: Candidates seek security and stability. They want a full-time, permanent position.
REALITY your: Sometimes. But among the new wave of talent joining the workforce, many prefer mobility or a “try-before-you-take-the-job” experience that has steered them toward the gig economy and contract work. They’re cautious and burned out from recent events, and aren’t eager to enter a workplace that might not match their values, culture, or work/life balance. Many are willing to forego the benefits and security of a traditional full-time position in favor of flexibility, autonomy, and work/life balance.
Higher pay isn’t the top reason passive candidates are enticed to make a move. More often, it’s flexibility or opportunities for advancement.
Substantial pay increases for new hires feed the inflation cycle. Instead of increasing payroll budgets, direct your resources toward retention strategies and technology that facilitate flexibility in schedules, benefits, and location.
SOLUTION: A three-pronged plan:
- Hire and promote from within. Invest in training and career development coaching for employees. Offer promotions and peer leadership opportunities to reduce turnover.
- Learn to identify the motivating and de-motivating factors that cause employees to stay or leave your organization. Remote work, flexible scheduling, wellness support, and an inclusive culture should figure into your company strategy.
- Augment internal recruiting with external recruiting sources. Consider alternates to full-time. Interim, temp-to-hire, and project work serves employers in assessing fit and promotability while allowing candidates to acclimate to their role and the company culture.
Companies often lack the internal resources to build and manage the communication required to find and nurture passive candidates. Cultivating a pool of passive candidates demands consistent effort and outreach. Choose a search partner who specializes in your business to assure access.
#3: Believing (hoping?) the talent shortage will pass.
REALITY: The talent shortage will continue for decades, according to analysts.
SOLUTION: Develop long-term strategies and commit to adapting to the changing candidate culture and work preferences. Include alternative recruiting models and be selective about outside resources.
The “Retirement Cliff” is the next threat to the insurance industry’s workforce.
Here’s the backstory:
Over the last ten years, the number of insurance professionals age 55 and older has increased 74 percent. Boomers make up a disproportionate percentage of the insurance workforce and they’re retiring. Many left sooner than expected, thanks to the pandemic and surges in real estate prices that allowed them to cash out early.
The BLS estimates that over the next 14 years, 50 percent of the current insurance workforce will retire, leaving an additional400,000 open positions to fill and a talent shortage that will extend well into the mid-century.
Our best advice? Build your hiring and retention strategy for the long term, develop partnerships that will give you access to untapped talent, and do what it takes to keep your team happy and productive!
Read more about the transformation of the insurance workforce and McKinsey’s suggested strategies to meet the hiring challenges ahead.