Talent crisis will drive change in insurance
Key attractions for today's top insurance-job prospects include a startup culture and cool technology.
According to the results of a self-assessment designed to evaluate companies’ digital maturity, the included 42 insurance companies (out of 700 cross-sector survey participants) lagged behind other industries on metrics related to culture, agility, testing and learning, collaboration and external orientation.
This surely doesn’t bode well for the insurance industry, with its reputation for the traditional and conventional. But some carriers are evolving to meet today’s myriad challenges with a workforce that’s shifted to online, a talent market that favors “cool” factors and startup culture, and new sources of competition.
Tech is the game changer
Technology and digital enablement are shifting not only the internal processes and people required to run a leading carrier but also the customer interaction models and experience. At every step of the way, new InsurTech entrants are challenging existing business models. Increasingly, firms are focusing on their front office differentiation and value to customers while employing partner networks for non-core activities, ultimately forming how they will choose to act and react to the changing market. But the talent crisis currently facing the insurance industry should not be understated as a major driver of change.
As an active response to the emerging talent crisis in the insurance industry, carriers are beginning to tap into non-traditional talent pools and are rebranding to attract millennials, digital natives, and undergraduates at a rapid rate. Coupled with the acceleration to a flexible/hybrid workforce that will require realignment of resources, policies and infrastructure to accommodate employees in new working environments, a massive shift within insurance in recruiting, talent management, and digital adoption techniques is needed.
In this quickly changing world, the most effective organizations will be the ones that are quick to adapt and communicate actively and coordinate consistently across different teams, geographies and business units as well as focus their recruiting and development efforts on the skills that will be necessary in the new world.
How to win at hiring
Specifically, leading insurers will need to look to specific strategies in talent and management to succeed. Let’s start with approaches to talent acquisition; how to know what talent you need, how to win at hiring, and how to measure success in the job. Firms need to evaluate their current workforce to find the gaps and decide which openings should be filled internally and which non-core and supporting functions can be operated by partners.
In order to focus on, expand and improve core capabilities, firms need to diversify their own DNA, by bringing in candidates with new views and skills. The few digital talent innovators in the insurance industry are currently enjoying a first-mover’s advantage based in part on having these diversified hiring practices, and it is imperative for success to be able to match them.
In order for companies to plan for the skills of the future, they are going to need to identify pivotal digital roles and invest time and resources in them — building, borrowing and buying talent as they need it. Typically, it’s time to “build” talent when demand exceeds the supply in the labor market and performance requires firm-specific knowledge and skills, while signs to ” “ buy” are when talent is more readily available, and the skills needed are not part of the core firm strengths.
Overall, whether you build or buy, it’s important to focus on people, not jobs, to nurture agility, adaptability and re-skilling within the company. An ongoing way to make this growth a core opportunity is for companies to build “success profiles” around star performers to create a baseline of employee expectations and capabilities, and measure employees’ competencies, personal attributes, knowledge and experience on a regular basis.
Navigating the competition
Competition for talent in the industry has historically been confined to traditional insurers. However, competition is now coming from both InsurTech players and other financial services firms as well as major non-insurance players such as Amazon and Google. Therefore, insurance companies must reach out to a non-traditional pool of applicants in order to attain the diversified talent they need. They also need to be attractive to that talent, an ever-younger and more digitally native group of workers whose demands and desires are different than those of their parents. This task will require, for many companies, a new take on diversity, inclusion and core culture qualities.
On the managerial side, leadership has a great deal of work cut out for them as the requirements of a shifting insurance ecosystem are, in and of themselves, shifting as well. Significant investment will be required in learning how to stand up, lead, manage and adapt teams in this new environment, especially considering the rise of technology outsourcing. Cross-functional teams, geographically dispersed groups, and partner relationships will all test the mettle of today’s insurance leaders.
Furthermore, leadership plays a major role in setting a company’s culture, which ultimately is a major determining factor in success overall. Leaders who manage with empathy tend to have a more engaged, empowered staff. Thriving employees are twice as likely to work for an organization that effectively balances EQ and IQ in decision-making — something less than half of companies get right today. Leading firms create focus and alignment via purpose to better engage their employees. Purpose is the intersection of “who are we” and “what purpose do we need to fulfill.”
Moving the needle on this agenda means putting human and economic metrics side by side, caring enough to place responsibility for long-term future above short-term gains, and creating space for people to be their whole selves. This is empathy, and it is needed for winning in an evolving world.
The changing nature of the industry is not just a challenge; it’s also an opportunity. Successful firms will learn to deploy teams to serve their customers in more nimble and agile ways, staffed by millennial workers who are increasingly interested in staying digitally connected with their coworkers and prospective employees. Insurance firms need to embrace this cultural shift to attract, nurture and keep the talent they need to sustain their business.
John Rodgers (jrodgers@ssaandco.com) is COO and managing partner and Brian Nordyke (bnordyke@ssaandco.com) is senior director at SSA & Company, a global management consulting firm.
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