We've all heard about the Great Resignation that has accompanied the pandemic, as people have reevaluated their priorities and, in millions of cases, decided that their current job doesn't make the cut. Many have quit and moved to a different company or even to a different industry, and many have stepped out of the work force altogether.
It seems that insurance has it worse than just about any other industry. A study by McKinsey finds that 65% of those who resigned from a job in insurance or finance between April 2020 and April 2022 left the industry entirely. That percentage is exceeded only by the 76% in consumer/retail, which has always had a problem retaining people, and the 72% in government/social sector. And the departures from insurance come as the industry is starting to experience a long-anticipated sort of Great Retirement, as an awful lot of talent is aging out of the work force.
What to do?
The McKinsey report warns that "there simply aren’t enough traditional employees to fill all the openings. Even when employers successfully woo these workers from rivals, they are just reshuffling talent and contributing to wage escalation while failing to solve the underlying structural imbalance. To close the gap, employers should try to win back nontraditional workers."
To do so, the report argues, employers need to understand different personas and craft appeals to each.
For instance, the persona that McKinsey labels the "do-it-yourselfer" values autonomy above all else and could be attracted by modularized work that can be done independently and measured by output rather than based on time spent.
The "caregivers" -- which strike me as a particularly rich opportunity -- are what I've seen described as the "sandwich" age group. They're caught in between caring for kids and caring for their parents. They respond to offers of compensation much as traditional employees do but have a whole, complicated set of needs for flexibility. If they can be accommodated, they bring a rich set of skills.
The "idealists," who are students and younger part-timers, have often avoided insurance because they don't find it exciting but, it seems to me, could be attracted much more readily if insurance does a better job of describing its "noble purpose."
The "relaxers" also seem to me to be a rich vein for the insurance industry to tap. A lot of the calculations about the talent drain facing the insurance industry are based on the traditional notion that people retire at age 65. But 65 is no longer such a cut-and-dried number, especially with work-from-home becoming widespread. Sure, people may no longer want to saddle up and head to the office for 40 or more hours a week, but maybe they'd work 20 or 25 on some sort of flexible basis at home, to contribute on projects they find meaningful, to keep their brains engaged and to stay in touch with their friends, while still allowing time for more travel, golf or something else. Some sort of continuation of health benefits could be a powerful sweetener -- and there's an awful lot of institutional knowledge that could be kept from walking out the door.
"Vitally, companies can no longer assume that they can fill empty slots with workers similar to the ones who just left," the report says. Insurers wanting to address the talent problem will need to not only look in nontraditional areas but must be willing to craft more personalized value propositions for employees.
Employers can also help themselves a lot by stopping some behaviors that cause that talent gap to develop in the first place. In particular, McKinsey says, "It cannot be overstated just how influential a bad boss can be in causing people to leave,... along with a lack of career development."
The report provides a full description in the figure below that shows which factors, according to the firm's research, are most likely to drive people away, as well as which factors attract people.
Albert Einstein famously said, "We can't solve problems by using the same kind of thinking we used when we created them." If we're to get out of the talent crisis that is unfolding around us, it's time for some bold, new thinking.
Cheers,
Paul