Need Workers? Try Retirees

The facts are stark:

• Insurance has not attracted young people in sufficient numbers.
• Industry employers (carriers, agencies, brokerage firms and others) will be short of talented staff.
• We as an industry are losing our institutional knowledge.

The knee-jerk response for years has been to try to recruit young new talent to fill the gaps. But that's a problem too: There just aren't enough of them. And it will take years to find and train enough of them, while in the meantime institutional knowledge is walking out the door.  It will be too late to transfer the know-how; it takes years under the best of circumstances.

Even when the U.S. had a growing younger population, the industry was unable to attract and train young talent. Insurance carriers cut once-generous training budgets and closed down popular producer schools and the effective programs that produced so many young, energetic, skilled producers became a thing of the past. Young people out of college went to Wall Street, telecommunications, technology and other high-profile industries.

The talking heads in the insurance industry keep admonishing us that we must have a united effort to attract and train young people because it is the only solution. I agree with that statement—but only the first half of it. Yes, the industry must be united and focused, but young workers are not the only solution.  Retirees are a big part of the solution to the insurance brain drain.

You might ask, "If they're leaving, they're creating the problem, so how can they be part of the solution?"

They can be because today's retiring workers still want to work in the future. But they want a new arrangement, using technology to work remotely and flexibly from home.

Much of this change toward retirees' desire for a "phased retirement" is due to a major paradigm shift. Years ago, people looked at retiring at 55 because most thought they might not live longer than 65. AARP started soliciting people when they reached 50 and enrolled them in joining the senior population.

Personally, I have been trashing my AARP solicitation for years after I turned 50. I still felt 35 and vibrant. Now that I'm over 60, I tell everyone that 60 is the new 40. Think of it:  Who thinks of him/herself as a senior at 50 or even 60 today? My 86-year-old mother and 92-year-old father are "seniors," but I'm not!

Let's look at the history. The Social Security Act of 1935 set the full retirement age at 65 with the ability to collect at 62. In 1983, the amendment to the Social Security Act increased the age for full benefits over a 22-year period, going from 65 to 67. When Social Security was enacted, it expected to pay out very little as very few people lived to see 65.

Little-known fact: the age 70 (later reduced to 65) was originally selected by German Chancellor Otto von Bismarck in 1889 when he introduced a Social Security-type system to appeal to Germany's working class. In 1935, when the U.S. Social Security system was enacted (more than 55 years after Bismarck's innovative idea), life expectancy in America was 61.7 years. By 1950, life expectancy for the first time exceeded 65, and it has been growing steadily each year. Today, life expectancy in the U.S. is 75.6 for men and 80.8 for women.

There is much new research about the insurance industry's retirees and soon-to-be retirees:

• They want to retire not because they are worried about having a few years left to live beyond 65 (which was the case just a generation ago), but because they want a more balanced, less stressful life. With as many as 30 years left to live, many people are not looking for a traditional retirement of shuffleboard, naps and 4 p.m. dinner specials in an income-tax-free state.
• Statistics show that retirees who stay engaged and use their brains stay healthier, live longer and postpone dementia.
• Because Americans are living longer, individual retirement assets and Social Security will not be sufficient for the long haul. That means retirees are still looking to earn income.

For many retirees, the new "normal" is to stay engaged, continue working and be involved in the business world and community—but in different ways. The term for this is "phased retirement." I've reached this conclusion not just from reading sociological and economic research, but also from talking with dozens of insurance industry retirees and pre-retirees.

Sometimes there is a perfect-storm scenario for a new paradigm to emerge. It's happening now in the insurance industry—the creation of a new work force of vintage employees. Retiring baby boomers:

• Are smart, dedicated, and technologically savvy
• Need to supplement their retirement income
• Want to stay engaged in their industry and mentor others
• Do not all want to be greeters at Wal-Mart or work the counter at a local hardware store, jobs that don't tap into their decades of experience and knowledge.

At the same time, industry employers are challenged with:

• Longer soft markets and the need to establish or maintain profitability
• Outsourcing knowledge process work overseas
• Finding sufficient experienced and knowledgeable staff
• Replacing intellectual capital, which is being lost with each passing month
• Hiring people at an affordable cost. Recruiting and hiring, finding office space, paying salary/benefits, training and development, and equipping a worker with technology all are significant expenses at a time of flat revenues.

So why don't baby boomers just keep working at their full-time jobs? Most think 30 to 40 years working in an agency or a company is long enough. They are looking for a different balance to enjoy the "grand years" in a different way. Working remotely from home provides that flexibility. Today's technology makes it possible for workers to be productive without being at an office.

Being a partner in a large insurance brokerage firm, a past chair of the New York chapter of the Big I, and a director on the Agents Council for Technology (ACT), I've been an advocate and a beneficiary of using technology to better serve the industry and its clients. Having started three insurance firms, serving as an advocate for women business owners and nearly being a baby boomer (I am three months too old), it all came together to me one day, and I created a new company called Work At Home Vintage Employees (WAHVE).

WAHVE's mission is to transfer insurance knowledge and talent from worker to employer through domestic outsourcing. We're a matchmaker for firms that need help with process and production work or that need qualified staff. WAHVE enables hiring managers to outsource to experienced insurance professionals (who happen to be retirees, often in another region of the country) who work remotely. These workers are CPCUs, CICs, ARMs—experienced insurance workers who are willing and able to work from home.

WAHVE is collecting our industry's retiring baby-boomer talent so that agents, brokers and carriers can tap into that talent for a multiple of purposes and for full-time, part-time or project work. My prediction: the baby-boomers will become one of the most productive retirement generations in the history of the United States as well. The midnight oil will still be burning!

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Sharon Emek, Ph.D., is president and CEO of WAHVE LLC (Work At Home Vintage Employees, www.WAHVE.com), a domestic remote staffing firm that works exclusively with insurance agencies/brokerage firms. She also is a partner at CBS Coverage Group, Inc., an insurance agency in the New York metropolitan area. You can reach her at sharon.emek@wahve.com. See an interview with Emek from AA&B.