I recently spoke with risk management consultant and former insurance agent Dan Weedin, author of Insuring Success. Weedin and I share something in common: A passion for the insurance industry and a concern that today’s top insurance talent is disappearing. We talked about some of the challenges facing agencies and insurers as they try to align staffing needs with retiring talent.
As millions of Baby Boomers retire within this decade, the industry’s talent crisis is real. An added area of concern for insurance organizations is that many of those “Boomers” are deciding whether they should take that last chance and change careers. “Burnout, disgust, and unhappiness in one’s job will lead to change, especially at an age when timing is of the essence,” Weedin says. As these long-tenured and valuable employees leave, so do all their “smarts” that organizations accumulated over the span of their working career. That is how an organization can lose its memory and suffer from what Weedin refers to as “institutional amnesia.”
Can the insurance industry solve this problem? Yes, according to Weedin, but organizations must begin immediately to develop a solid strategy and execute a talent management plan. Here are several changes he suggests organizations can make.
- People are tired of “working for the man” and are seeking new opportunities. “Companies have done this to themselves,” Weedin believes. “Command and control leadership tactics won’t work any longer. Collaborative cultures are much better. Business guru Peter Drucker once said, ‘Culture eats strategy for breakfast.’ It’s about the culture and how people contribute that makes a difference. The rewards go far beyond the financial. Employees must be challenged and continue learning to stay with an organization for the long-term.”
- Pay special attention to Boomers between the ages of 50 and 60. Later Bloomers are making employment changes, according to Weedin. “They’ll either start their own companies or look for employers that offer value-added employment for them. You don’t engage employees through command and control. To attract these employees with the technical knowledge so desperately needed in the insurance industry today, a more collaborative and flexible workplace is imperative.”
- Insurers are slow to react to market changes and slow to react to make changes in their culture. The result in the industry is the merging and acquisition of companies, which can be problematic. This paradigm shift needs to occur quickly, or insurers will find themselves in constant “catch up” mode, losing valuable ground.
- Create an environment of collaboration. Develop areas where employees from different departments can converge and communicate. There is plenty of research that shows that happy, more connected employees are better workers that stay longer and improve the company and its bottom line.
- It is difficult yet imperative to find and keep good talent. The most profitable companies tie compensation to underwriting success, which can only be achieved with help from the claims department. Accurate data input by claims personnel allows cleaner underwriting profit analysis by insurers.
Innovative insurance companies are making major changes to cope with the tidal wave of retirement. Consider moving away from cubicle seating and into more open workspaces. Question the traditional departmental seating in favor of more open and collaborative workspaces. It’s working in high tech, and it would work wonders in the insurance industry. Consider placing rows of adjusters between underwriters and sandwich in other departments to encourage cross-pollination. Underwriters see the results of their work in action and claims people can discuss coverage intent and coverage language. Open seating increases a company’s intellectual capital. By nature, most humans want connection in the workplace, especially the new pack of millennials entering the workforce who grew up with coaches, mentors and social media. Allow them to fulfill these needs by creating a culture of collaboration and affiliation.
In today’s competitive environment, a one-shot leadership event will not deliver the changes your organization needs to remain competitive. Moving forward in this century’s business climate, insurance organizations must develop an intentional strategy to develop intellectual organizational capital, invest and empower employees and create a culture that rewards all employees. The results, according to Weedin, are fewer headaches, happier employees who stick around, and ultimately, increased profitability. Companies that fail to find that balance between empowered employees and profits will ultimately fail.
