For more information, read these AA&B Web exclusive articles: Recruitment: The Big-Picture View and Recruitment: The Youthful Perspective. Back in 1970, sociologist Charles A. Reich posited in his book “The Greening of America” that widespread acceptance of countercultural credos and recreational drugs would transform America into a land where personal freedom and egalitarianism would prevail.
It didn't quite turn out that way. Instead, we're looking at The Graying of America, in which the baby boomers of the 1950s and 1960s are retiring in a giant demographic wave.
According to the Insurity/Microsoft Millennials in Insurance Survey 2008, nearly 60 percent of our employees are older than age 45. Between now and 2014, the U.S. property-casualty industry must fill almost 100,000 underwriting and claims positions.
The issue is probably most acutely felt in small to midsized independent agencies. A recent AA&B survey of our readers shows that 52 percent have fewer than 5 percent of employees under age 30 (click here for complete survey results).
“Most agency owners are nearing retirement age, yet there is a lack of young professionals in the industry to take their place,” said Diane Fowler, executive director of the PIA of Connecticut, New Hampshire, New Jersey and New York. “Our members are concerned about the future of the businesses they have worked so hard to develop, and the future of the independent agency system as a whole.”
Insurance's “boring” reputation doesn't help. “Insurance has never been highly regarded by young people,” said Bill Pierson, executive director of InVEST, IIABA's program to attract talent. “It has the stereotype of being a sales job for something that nobody wants to buy and nobody understands.”
Education and community outreach are keys in finding new talent, followed by providing career growth opportunities, fair benefits and salaries, and ongoing training.
“Nothing is recession-proof, but insurance will always be a necessity,” said Fowler of PIA. “With banking and financial services reducing their work forces, there are people without jobs who have professional skills that would lend themselves to our industry. We've talked with our members about seeing these times as an opportunity to recruit these people.”
AA&B spoke with the principals of four agencies to see what they're doing to recruit, hire and retain top talent. Here are their stories.
John Murray, CEO
Rose & Kiernan, Albany, N.Y.
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With 12 offices in New York and Connecticut, $45 million in annual revenue and 190 employees, Rose & Kiernan was big enough to do something dramatic about its recruiting problem: It went directly to community colleges.
“When I came into the firm in 1994, our plan was to double our revenue every 5 years,” said CEO John Murray, an InVEST board member. “We could handle some of that growth through efficiencies like automation, but we knew we would have to hire more people.”
Like most agencies, Rose & Kiernan had relied on “stealing” talent from competitors and insurers in the region. Today, most companies are gone, leaving agencies starved for local recruits.
The agency approached Hudson Valley Community College with a two-year insurance and risk management curriculum to fit into the college's existing business program.
Working with other area agents, the agency decided basic coursework should include introduction to commercial property-casualty, personal lines and agency management components.
A year later, the program was approved by the New York Board of Regents, and is now in its second year. Enrollment is about 30, including three Rose & Kiernan employees.
The agency also hires eight to 10 college interns each summer. Five of these are now full-time employees.
And although Rose & Kiernan is committed to recruiting younger people, the firm targets all age groups. For example, the agency just hired a man in his late 50s as a senior customer service rep with a construction focus to service existing accounts.
The firm also hopes to grow producers by training customer service representatives (CSRs) on property-casualty and benefits. Rose & Kiernan enjoys 5 percent attrition, primarily due to promotions, and hires about 15 new people per year.
Rose & Kiernan also has an ESOP plan, with more than half of its employees as members. After employees have been with the agency for 2 years, they receive 15 to 20 percent of their salaries in company stock.
Training is also essential. The agency uses Applied Systems' Significant Systems to train all employees in Outlook, Exel and Word. About 20 percent of employees have or are working on CPCU, CIC or ARM designations.
Nestor Rivero, principal
Tropical Insurance, Miami
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