The insurance industry is in a talent crisis. The Insurance Institute of Canada revealed a nearly 50% increase in voluntary turnover between 2017 and 2022. The industry average also sits 30 percentage points over the national average of 12%. In a 2024 Mercer report, insurance and reinsurance were cited as one of the most difficult industries in terms of hiring or retaining employees. While strides have been made in attracting diverse talent—now meeting the national average of 25% representation—retention remains a critical challenge.
Career advancement and workplace difficulties continue to top the list for people exiting the industry. The sector is attracting, but not maintaining, talent, which affects the broader industry recruitment efforts to bring in new perspectives.
DEI Fatigue: Lack of Mutual Respect and Trust
One systemic issue lies in the overreliance on questioning one's merit when assessing performance—this causes a lack of respect and trust from the onset. A Harvard Business Review survey of 20,000 employees found respect was identified as the leadership behavior that most stimulated greater employee commitment and engagement. Another study conducted in the Memphis Business Journal found 60% of respondents felt that the lack of respect was getting worse.
The Legacy Business Culture defines respect in the workplace as "an active process of nonjudgmentally engaging people from all backgrounds with the intent to increase your awareness and your effectiveness. It is demonstrated in a manner that esteems both you and those with whom you interact." However, some barriers diminish trust and erode respect, including excessive micromanagement, differential treatment, lack of sufficient autonomy, and exclusion.
See also: We Must Be Diverse by Design
The Cost of Inaction to DEI Fatigue: Undermining Team Resilience
Prominent Canadian insurance leader Colette Taylor understands the importance of DEI fatigue. She was quoted in a 2024 article published by the Insurance Business of Canada, stating, "...attracting diverse talent is crucial, but we also need to invest in their growth and development. It's essential to prioritize this investment so that they gain the confidence, capabilities, and resources needed to advance to senior leadership positions, ultimately enhancing diversity at the top."
Today, large multinationals are publicly pulling back on their DEI efforts. Canada, too, has seen rising inflammatory rhetoric targeting marginalized groups. This uptick can be counterintuitive to the industry if the right policies are not in place to address subtle biases. In turn, unchallenged biases risk limiting creativity and create workplace environments that may become uncivil, disengaged, or resentful. Business success hinges on how leaders navigate biases—whether toward people, actions, or priorities.
The Organizational Costs of DEI Fatigue: Reputational Harm
Law firm Clyde & Co reported a rise in 2024 Canadian EPL filings citing microaggressions. This follows a similar trend with our U.S. neighbors. Defending these EPL claims costs legal fees, loss recruitment expenditure, and loss of practical knowledge. There are also indirect costs such as stress-related leaves, diminished client trust, reduced employee engagement, and loss of productivity. A survey conducted by Gallup found disengagement has risen annually since 2020. Unconscious bias was also found in a Canadian parliamentary research report potentially contributing to Canada's lagging labor productivity.
A Pragmatic Path Forward: Greater Accountability
To help reverse the retention trend, organizations must confront discomfort to rebuild trust. As Steven M.R. Covey states in "The Speed of Trust": "Though it's possible to rebuild trust, it's not easy. It takes time, effort, and a willingness to change and prove trustworthiness through consistent action."
One pragmatic solution is changing the oversight of personal improvement plans (PIPs) from a purely frontline management and HR function to mandating leadership accountability at the top, with the local country CEO or global head of DEI (who communicates directly with the local country CEO) directly approving PIPs involving underrepresented individuals. Eventually, this could be rolled out to all employees. This measure achieves two important results:
- Safeguards organizations from employment practice liability (EPL) claims tied to potential misuse of PIPs, particularly when underrepresented employees are targeted for raising valid workplace concerns.
- Signals an organizational culture that is more willing to be open to innovation where mistakes, calculated business risks, and career advancement are seen as attainable—without fear of retaliation or reprisal.
See also: The Many Facets of DEI
Working Toward Being the Industry of Choice
The insurance industry stands at a crossroads. It's on the cusp of a major retirement wave with an alarming voluntary turnover rate. Members of Gen Z are more ethnically and racially diverse than previous generations and on track to being the most highly educated generation.
The work being done by the Canadian Association of Black Insurance Professionals (CABIP) and Multicultural (Re)insurance Association (MRIA) shows change is needed. Industry leaders must act decisively to recognize and root out areas where biases may exist, so good talent can thrive. It's time for leadership to take bold steps to build a resilient, respectful, and inclusive workforce that sets a new standard for the insurance industry.
