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Slim Pickings

How to deal with the diminishing supply of top talent

When the Insurance Institute’s Career Connections program talks about recruitment, that usually means promoting the availability of roles and careers in the industry to those not currently in it. The recruitment of “new” talent is critical to the sustainability of the industry.

However, the number of these new-to-the-industry roles accounts for a small percentage of the positions employers are looking to fill. Not surprisingly, what employers really want is to hire people with insurance experience.

According to the most recent survey of senior human resource professionals in the industry (Fall 2011, undertaken as part of the replication of The Insurance Institute’s Demographic Research study of 2007-2009), three-quarters of the positions filled over the past two years required “up to five years of experience.” These are junior roles with some insurance experience—not entry level.

For reinsurers, 60% of the positions filled over the past two years required “five to 10 years of experience.”

When asked about the next two years, the senior human resources professionals surveyed indicated that:

  • 41% expect to hire less than 50 employees and 41% will hire more than 100,
  • 44% of broker-represented insurers and 60% of direct response insurers expect to hire more than 150 employees
  • 69% will hire to fill existing positions and 81% of hires will be permanent, full-time
  • For all respondents, recruitment is “somewhat urgent” across identified occupations.

“Now that we are on the other side of the economic downturn, it’s good to see employers augmenting their recruitment plans,” says Margaret Parent, Director, Professionals’ Division at The Insurance Institute of Canada. “We’ve seen an increased urgency when talking with recruiters and greater interest in participating in the outreach initiatives of the Career Connections program.” But that’s about finding talent without insurance experience. What about those with insurance experience? Where will they come from?

New vs. Recycled

There are some—approximately 200-250 graduates per year—who are coming into the industry with insurance education, if not industry experience, through the full-time insurance programs offered at colleges and universities across the country. The majority of positions, however, are being filled by recruiting people from within the industry, which has a lot of human resource professionals concerned about sourcing top talent, “poaching” from within the industry, and turnover in general.

In the survey, HR managers were asked if they could identify how many of their exited employees stayed within the industry. On average, three-quarters of departees who remained employed stayed within the industry. For reinsurance companies and firms with fewer than 100 employees, that number jumps to over 90%.

“From our perspective, knowing the recruitment needs of the industry and the demographic research findings, retention of industry professionals within the industry is in good shape,” says Parent. “Keeping them in the industry is as important as getting them in the industry.”

That big-picture perspective is not always shared by the industry’s human resource professionals. Anecdotally, some would prefer that exiting employees leave the industry altogether rather than go to the competition or to a different facet of the business.

The survey results give us a little insight into why. When asked if they could identify where exited employees obtained new work, respondents indicated that one third found new jobs with a broker-represented insurer; one-fifth with an independent broker; and one-fifth with an independent adjusting firm.

Staffing managers at reinsurance companies and adjusting firms, for example,  say that the majority of their hires are those with industry experience, most often recruited from the insurers they do business with. This leaves insurers to struggle with the loss of the employee, all the while often dealing with that person through their business relationship with that reinsurer or adjusting firm.

Predictably, the more challenging positions to fill from a recruiter’s perspective are those where the qualifications require more advanced insurance experience. During the past two years, the most difficult—and therefore the most urgent—roles to recruit and retain were accident benefit adjuster, claims adjuster/examiner, casualty adjuster, actuarial and commercial underwriters.

By way of consolation, according to the survey respondents: (a) the least difficult roles to recruit were customer service representatives, underwriting support, sales support and claims support—often entry-level roles; and (b) the least difficult roles to retain were management (all levels), underwriting support and claims support.

Over the next two years, the most urgent recruitment and retention priorities will be for accident benefit adjusters, casualty adjusters, marketing/field representatives, actuarial, claims adjuster/examiners, commercial underwriters and underwriters.

In comparing the findings from 2007 to 2011, Alberta and BC remain the most difficult provinces to recruit in; small towns and rural areas, not metropolitan areas, are now the places where recruitment is relatively difficult; and claims staff has been the most difficult to recruit in the last two years and will continue to be the most urgent recruitment need in the next two years.

Employment Factors

When asked about the factors making recruitment more difficult, overwhelmingly and not surprisingly, the survey respondents indicated that it is the lack of qualified candidates both internally (64%) and externally (89%) that make recruitment difficult. And this is rated much higher than uncompetitive compensation levels (39%) and limited public understanding of insurance industry careers (39%).

When asked about the factors making retention more difficult, human resource professionals indicated that limited career prospects within the organization (65%), high degree of worker mobility within the industry (48%), uncompetitive compensation levels (45%), failure to accommodate work-life balance issues (39%) and poor fit with corporate culture (32%) are all factors.

Respondents also indicated that, “to some extent,” their ability to retain was impacted by changing economic conditions (54%) and industry consolidation (50%). Reinsurers, in particular, indicated that, “to a great extent,” they were impacted by changing economic conditions.

The retirement projections included in the 2009 demographic research study raise concerns about the sustainability of the industry and the pending retirement of 25% of the then workforce between 2012 and 2017.

“If there are not enough people with insurance experience to fill the roles, then we need get more people to have more experience,” says Parent. “Hire them new, get them trained, get them educated (to earn a CIP designation can take some a minimum of three years), get them ready and positioned now for later. If there is currently a need for commercial underwriters with more than five years of experience, unless there are lots of commercial underwriters with less than five years of experience currently working in the industry, there won’t be many more two to five years from now either.”

The same applies for brokerage firms and mutual insurance companies. Often small, with lean staff, and many long-standing employees due to retire, brokerages are in need of new talent, but often without the means to hire and train. The demographic research points to phased retirement plans as a means to free up some salary funds for a new hire and to enable long-standing staff to mentor new recruits ensuring knowledge transfer, quicker training and better client management.

For the larger brokerage firms and insurers, the research suggests looking to their own internal pockets of younger employees; those currently working in sales and service, which has a high percentage of employees under 30 and working part-time.

“It may be that these young employees are working part-time by choice. However, part-time employment is generally not the preferred career option for workers who no longer attend school full-time,” according to the 2007 demographic research findings. “It is recommended that companies analyze the demographic characteristics of their part-time employees and conduct internal surveys focused on the identification of career aspirations and training and development needs. To some extent, the solution to recruitment difficulties may already lie within their own walls.”

The information gathered in the research conducted by the Insurance Institute leads to one inescapable conclusion, says Richard Loreto, President of R.A.L. Consulting Inc. and research consultant to the Insurance Institute.

“In the next 10 years, a proactive, strategic approach to human resource management is essential for industry sustainability. The attitude that ‘we have always done it this way,’ is a constraint that must be overcome.”


Copyright 2012 Rogers Publishing Ltd. This article first appeared in the March 2012 edition of Canadian Insurance Top Broker magazine.