Practice Management

Tackling The Talent Crisis

How the industry is adopting non-traditional, multi-faceted strategies to recruitment and retention

by John Rodgers and Brian Nordyke

Mr. Rodgers is COO & Managing Partner and Mr. Nordyke is a Senior Director at SSA & Company, a global management consulting firm. They can be reached respectively at [email protected] and [email protected]

To put it plainly, the insurance industry is facing a crisis of talent. Moreover, along with the rest of the world, it is also facing massive shifts to workplace function and culture.

Some carriers, however, are rising to the challenge, beginning to tap into non-traditional talent pools and re-branding  to attract millennials, digital natives, and undergraduates at a rapid rate. Couple these changes with the new needs of a more flexible, hybrid workforce – a necessary realignment of resources, governance, and infrastructure to accommodate employees in new working environments – and it’s clear that a massive shift within insurance in recruiting, talent management, and digital adoption techniques is needed.

 

The New Digital Competition

Competition for talent in the industry has historically been confined to traditional insurers and brokers. However, as the skills needed in insurance shift more and more towards digital and analytical capabilities, true competition is starting to come instead from tech companies such as Amazon or Google.

Insurance companies must therefore start pulling talent from a non-traditional pool. For example, both technology firms and insurers alike need more data scientists who can focus on predicting consumer behaviors and anticipate their needs or predicting their risk profile. There are even some advantages forward-thinking insurers can emphasize to attract digital talent, such as the opportunity to expand an individual’s impact and serve millions of existing policyholders – which is something tech start-ups simply can’t offer. While the insurance industry has historically been extremely conservative and slow to innovate, insurers need to start thinking about and making these kinds of fundamental changes now.

These new capabilities insurance companies should focus on can be broadly broken down into a few categories. The first task is to look toward the future, and plan for the skills of tomorrow by building, borrowing, and buying talent, and identifying pivotal digital roles, and investing time and resources in them. In doing so, companies must also address current gaps in their talent and work on structuring their workforce to focus on core differentiated capabilities, all the while managing partners to SLAs. The workforce of the future has different roles than yesterday’s office, including relatively new positions ranging from data scientists and technology firms to partnerships and apprenticeship agreements. Finally, all of this must be underpinned by refocusing on a broadened approach to core culture: diversity & inclusion, empowerment & collaboration, growth opportunities, and modern digital solutions, all while supporting a flexible, agile workforce.

A New Scheme: Borrow, Build, Buy

Insurance companies must therefore start pulling talent from a non-traditional pool. For example, both technology firms and insurers alike need more data scientists who can focus on predicting consumer behaviors and anticipate their needs or predicting their risk profile...

Making changes to the talent acquisition plan can be loosely mapped onto a Borrow, Build, Buy scheme. First, organizations must evaluate their current skills gaps, looking at least five years out, in order to see the gaps to fill. The most straightforward option would just be to borrow, or buy, by bringing in external talent. If talent is readily available in the market, and that talent is capable of doing the job, hire away. Situations that match the requirements for borrow and buy would be low skill jobs or jobs where education can serve as training, as well as jobs where performance is tied to skills that are transferrable between organizations, or where those skills are plentiful, easy to develop, and are not part of the firm’s core strengths.

But when should they build it themselves? If the demand for talent exceeds the supply of talent in the labor market, or the skills being sought are scarce or difficult to acquire, bringing in new talent might simply not be an available option. Or, if success in the job requires firm-specific knowledge or skills that aren’t transferrable between organizations, or the work is highly dynamic and often changing, it’s most efficient to build skills within the company.

A More Agile Workforce

A new, more agile and digital workforce will likely function in a new, more agile and digital way as well. Cross-functional teams will make up new agile product development squads which maximize employee engagement but also require heightened communication and collaboration skills. New modes of collaboration will (and have already begun to) proliferate across company ecosystem, beyond these agile microcosms, similar to how high-tech firms have emphasized this culture for years. Teamwork is the new norm, with insurers now more often reaching out to access capabilities across the value chain, from a new network of potential partners – including direct partnerships and joint ventures with venture-capital funds – to external knowledge sourcing and technology investments.

There are three key drivers to remember in successful talent managing: First, it’s important to focus on the rapid allocation of talent. This means effectively deploying talent based on the skills needed when the skills are needed, and bringing talent together into small, cross-functional teams. Second, firms must emphasize HR involvement in the employee experience. HR teams should bring experience from various other company functionalities to address business priorities and be able to deploy talent in support of the overall strategy. Finally, the HR team should be closely linked to the business. They should not only come from other functionalities, but should also collaborate with the CHRO, CEO, and CFO.

Insurance, one of the more traditional and conservative industries, is under pressure to make a fundamental update. In order to meet the needs of a younger, more digital workforce in an era in which work itself is more digital and agile than ever, companies will have to make overhauls to their workplace culture, hiring and talent deployment strategies, external partnerships, and internal leadership if they are to remain competitive. Some carriers are showing an active response to the task ahead, and only time will tell how those who do not will fare.

 

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