What LIMRA and LOMA test data reveals about the financial services industry
The pandemic has brought uncertainty and economic fragility to just about every industry. LIMRA and LOMA together help the industry to assess both advisor and home office employee candidates. During the first six months of 2020, field assessments are up over 18% from 2019, while home office testing is down 40%. These trends are consistent with prior economic downturns.
Home offices reduce testing as they cut expenses, hire fewer people, and (possibly) institute layoffs. At the same time, as unemployment rates go up, more people are open to the field sales role. Therefore field offices test more candidates for a potential fit for those positions.
“The good news for recruiters looking to fill career agent positions is there has been a 9% increase in the number of individuals passing our assessment, which measures readiness for a financial services career,” said Peggy McManus, Ph.D., assistant vice president, Research and Predictive Analytics, LIMRA.
Candidates for the field assessments are coming from industries suffering the most job losses in the current downturn, such as hospitality, transportation and health care. In fact, testing from the hospitality sector is up 100% over the first six months of 2019; transportation is up 31%; and health care is up 21%.
Having more candidates does not, however, mean increased field agents brought into the industry. According to prior LIMRA research, the number of recruits contracted for career agent positions is down 18% from the first half of 2019.
One reason for delays in onboarding could be that shutdowns from the current pandemic have hampered new-agent licensing and background checks.
“Companies may be holding back on making new hires because they feel the current environment makes it very difficult for them to get started. Recruiting numbers may be more robust in the second half of the year as companies are working to keep candidates engaged in the process until they can move forward,” McManus notes.