It's a stark statistic: Nearly one-half of the professionals in the insurance industry today are 45 years or older—and one-quarter of the industry will retire by 2018. To address this trend, the industry can recruit and hire millennials, those born after 1980 and the largest-growing demographic in the U.S.
The problem is, a good number of these potential recruits think that an insurance career lacks the glamour of finance or other business careers on Wall Street, and that industry careers are restricted to sales. While longtime insurance pros know that that's a misconception, how can the industry get the word out that an insurance career has much to offer professionally, is a great contributor to society and the economy (a matter of great importance to this demographic), and offers a variety of job opportunities that utilize a multitude of skills?
“When we survey millennials, they know very little about the insurance industry and what they say they know is incorrect,” says Anita Bourke, executive vice president at The Institutes. “They have a negative perception.”
Illustrating this disconnect, 61% of young people said that they would like a job that includes analyzing risks and recommending solutions, according to The Institutes’ report “Millennial Generation Attitudes About Work and the Insurance Industry,” yet less than 10% are interested in working in insurance.
The insurance industry must become an employer of choice for this generation. Nearly 400,000 jobs will be available by 2020, and now is the time to lay groundwork. Here are five ways to do so, from recruitment through training.
Identify future gaps and hire appropriately
Because it takes years for knowledge to be passed on and for skills to effectively sharpen, it's ideal to recruit and hire young people well before the seasoned employees leave. At Arbella, a property & casualty mutual insurance company based in Quincy, Mass., the human resources department analyzed the demographics of its employees to learn where to expect talent shortages in the next decade. They discovered that its commercial lines, actuarial and claims departments will be especially hit hard.
Of the firm's 1,000 employees, Senior Vice President of Human Resources and Marketing Communications Gayle O’Connell says, “We have a talented—but tenured—population. And within the next five to 12 years, a lot of that depth will be walking out of the door.” Since January 2013, 62% of new hires at Arbella have been younger than 35 years old.
A new hire is a significant investment, one where the cost of failure is greater than the cost of training. With that in mind, start the training process even before a job offer has been formalized, says Meg Allwein, senior vice president and chief quality officer at Assurex Global, a partnership representing independent agents and brokers.
“By presenting a training plan before the final job offer, you can gauge how proactive the candidate will be in his own onboarding,” says Allwein. “Does he accept the training plan as presented, or does he evaluate the plan and offer customization?”
Align with educational institutions for interns
Get a leg up on recruitment by developing relationships with colleges and universities. Don't know where to start? The Institutes recently launched MyPath, an initiative to educate millennials about the industry through the website insuremypath.org. Collegiate partners can post information about their risk management, insurance or actuarial programs on the site. In turn, insurance carriers and agencies can publish internships. When this story went to press, there were 173 internships available in actuarial, underwriting, research, IT, analytics and agency sales.
The Spencer Educational Foundation, RIMS’ scholarship, grant and funding initiative, awards nearly 30 internships every summer. Companies that are interested in the program must submit a proposal that details what projects a potential intern will work on. For example, if the company is trying to analyze workplace injuries, Spencer interns would be expected to develop internal data and come to a conclusion regarding better work practices or loss prevention. “We look for proposals that will be a differentiator for the student,” says Ron Davis, executive vice president and head of market customers at Zurich and the foundation's board president.
Establishing relationships with local colleges can be equally effective. Arbella turned to UMass Amherst, about 100 miles away from the carrier's headquarters in Quincy. Arbella's vice president of personal lines, an Amherst alum, serves as a visiting professor. Closer to home, the firm has relationships with Northeastern University and Bentley University, to recruit and hire students majoring in actuarial sciences, finance and IT.
Across the board, industry associations agree that internships are one of the best ways to not only recruit young talent, but also to provide some early hands-on training. Members in The Council for Insurance Agents & Brokers have access to an online step-by-step internship tool that shows how to formulate an internship program or augment an existing one.
“New hires with the best success rates are those who did internships with the firm prior to joining it,” says Elizabeth McDaid, senior vice president, leadership and management resources at The Council.
Stress the ‘meaningful’ component of insurance work
Younger employees value how they contribute toward the big picture and they ask for responsibility earlier than previous generations. Millennials want to work on things that impact the common good. Whenever possible, show them—in person—how their job positively impacts a person's life or business.
It's not enough to post available positions to job boards. Millennials are not clamoring for just any job—they want the right job. Adam Rothert, president of Rothert Insurance, an MGA based in Portland, says that he has had more success attracting young workers when he highlights “responsibilities” rather than “tasks” in job descriptions.
“Manage your message with younger folks,” says Rothert, who also is the president of AAMGA's Under Forty Organization. “Telling them that they are responsible for helping maintain compliance with the state is a lot more attractive than telling them that they will file taxes and fees.”
Need some assistance crafting your message? In the near future, the Foundation for Agency Management Excellence, a charitable educational organization associated with The Council, will launch a program called Year One, which will contain resources, online courses and activities to develop a new producer in his or her first year.
Hands-on experience, where new hires go out into the field and meet clients or participate in strategy meetings, help them comprehend how their roles align with future goals—whether for their own company or their clients. “The more context you provide, the more people feel that their work is meaningful,” says Dan Epstein, CEO of ReSource Pro, a New York-based provider of business process outsourcing services for the insurance industry. “And when they feel that connection, they are more likely stay on and develop a career path with the company.”
Choose your mentors wisely
Many longtime insurance professionals will be able to dispense thoughtful advice to new hires, but the truth is, not every seasoned pro makes an effective mentor. It's important to create a workable pairing between mentors and younger employees in order to drive success. Personally select mentors that are knowledgeable in not only their jobs, but also in the business culture, says O’Connell at Arbella.
Consider personality traits. Some of your seasoned veterans may be very good at their jobs, but cannot effectively convey their experience to new hires. Keep in mind that in addition to these new duties, a mentor still has to carry his or her own workload.
“It takes years to gather the skill set to become a really good underwriter,” O’Connell says, “but millennials are not afraid to ask questions—even to company executives. They like to be involved.”
Don't be afraid to give trainees freedom, and that includes the freedom to fail. And when a mentor has to sit down with his or her protégé and give feedback? Don't sugarcoat the hard stuff. “Younger folks prefer if you are more direct,” Rothert says. “Just say ‘These are the expectations, and you aren't meeting them.’ Millennials can separate themselves from their job performance.”
This younger generation thrives under structured planning, so establish key milestones and timelines for both the mentor and new hire, as “meeting those goals is a measure of success for both the mentor and mentee,” Allwein says.
Make teamwork part of the learning process
Teamwork is important to many younger recruits, and they collaborate well on tasks. “Hiring a group of millennials and having them go through the training as a cohort is an excellent best practice,” says The Council's McDaid. She suggests giving trainees group projects that they can work on together.
At ReSource Pro, nearly 95% of its 2,000 employees are of the millennial generation. Epstein stresses that team activities don't always have to focus on the company's bottom line: For example, the firm recently purchased bicycles that employees could build together. “It was really about learning how we relate to each other,” he says. “Give them action learning. Building a bike helps them develop communication and apply new skills.” The assembled bikes were donated to disadvantaged children in Los Angeles.
“We try to force interaction,” Rothert says of his 26-member staff. “We play games like Family Feud, where some categories are insurance-focused. We play ‘Two Truths and a Lie’ [in which a person reveals two true things about him or herself and one false thing, and others guess which is false]. It inspires morale and motivation when you feel more connected with the people you work with.”