Increasing Challenges in Workforce Dynamics

Transcription

1 Trend: A large segment of the workforce is approaching retirement in the near future and there is a gap in attracting and retaining new talent and transferring institutional knowledge and expertise. There are also increasing challenges in managing the multi-generation workforce and promoting diversity throughout all levels of the organization. Outline: 1) Attracting and Retaining New Specialized Talent a. The insurance industry is challenged to attract and retain the top young talent. i. Per the U.S. Census, it has been projected that the millennials will outnumber baby boomers and are expected to make up half of the global workforce by 2020 ii. There are only 40 colleges nationwide that have a risk management and insurance program iii. Insurance needs to find a way to make the industry appear interesting so they can attract the next generation (either negative connotation of what insurance professionals do or it s a boring sales job ) 2) Knowledge Transfer a. Many agency owners and their staff are nearing retirement and have no succession or perpetuation plan in place. Much of the knowledge is walking out the door and not being shared with the younger generations. i. 54% of principals/producers are older than 56 ii. 35% of principals/producers are 61 and older iii. The industry will need to fill nearly 400,000 positions by ) Lack of Perpetuation Plan a. Many agency owners and their staff are nearing retirement and have no succession or perpetuation plan in place. Much of the knowledge is walking out the door and not being shared with the younger generations. i. An estimated 14% of independent insurance agents and brokers lack formal business perpetuation plans ii. Four major techniques of perpetual planning: 1. Internal sale to key employees, including family members 2. Sale of the business to an outside firm 3. Merging with another agency with plans to eventually sell to the new partners 4. Passing the ownership to family or friends through inheritance 1 P a g e 8 / 5 /

2 4) Multi-Generational Culture in Workplace a. Up to 5 generations working simultaneously under different business models, backgrounds, culture and environments. i. Mix of generations can be attributed to rising retirement ages due to financial reasons ii. Employers are focusing on having an age-neutral workplace to support communication across all generations, which will help maintain a positive corporate culture and be able to retain talent at all age levels. iii. Workforce participation demographics (in 2011): 1. Traditionalists Generation (pre-1945) 5% 2. Baby Boom Generation ( ) 38% 3. Generation X ( ) 32% 4. Millennial Generation ( ) 25% 5. Generation Z ( ) iv. There are many similarities in how the different generations view their employers: 1. People of all ages view work as a vehicle for personal fulfillment and not just a paycheck 2. Workplace culture is important to all generations 3. More than 70% of employees want a supportive work environment 4. All generations want career development opportunities 5) Women Executives Under-Represented a. Currently, only 6 percent of top executive positions in insurance are held by women. i. Women hold 8% of executive-officer positions (6% C-suite positions) in the insurance industry but outnumber men in entry-level positions and in collegegraduate rates ii. Women in Insurance and Financial Services (WIFS) established in 1936 with 1,100 members, this organization was designed specifically for women seeking additional knowledge and success in their industry iii. Women s Mentoring Agent Network (WOMAN) formed by Brokers International so women may benefit from a network of insurance professionals iv. Financial Women s Association (FWA) established in 1956 with 945 members from every sector in the financial industry, including insurance Implications: Shortage of recent graduate candidates with so few majoring in risk management and insurance 2 P a g e 8 / 5 /

3 Many recent graduates are heading straight to industries that appear innovative and exciting (finance, technology) There is a disconnect between the expectation of earning flexibility versus being given it the day an employee starts. There is high potential for companies to be under staffed when the older principals/producers retire When the independent agency owner gets to a certain age and realize they do not know what will happen to their agency when they retire, they try to finalize these plans too quickly that it doesn t work out for the best An independent agency owner may pass away without a formal perpetuation plan in place and the family may lose the business (and employees could lose their jobs) if the company is auctioned Negative stereotypes of each generation may be perceived (e.g. Millennials are lazy; Baby Boomers and Traditionalists are difficult to train) Different generations have various preferred communication styles A lack of female executive-level role models may negatively impact less seasoned female employees in thinking they do not have potential for growth or do not see themselves taking a leadership role Opportunities: Becoming more creative with job perks that compare with other industries The three most important things millennials are looking for from their job are: A flexible schedule Opportunity to invest the time to gain the knowledge and skills to grow Chance to become involved in social causes Targeting high school students before they enter college and declare a major Targeting more than just risk management & insurance graduates; reaching into other general business program and providing in-depth training programs 3 P a g e 8 / 5 /

4 Provide internships to current college students Become involved with on-campus recruiting and job fair across the country Exposing new employees to all facets of insurance, not just their current job position Reinforcing that industry is a steady and non-tumultuous industry More effectively market breadth of opportunities in the industry (Standard, E&S, MGA, Carrier, Claims, Underwriting) Expanding the company s online and social media presence Formal mentoring programs with more experienced staff While there are few colleges specializing in risk management and insurance, the general business industry is competitive so there are capable individuals that may not be focusing on the insurance industry Formal training and education of younger staff earlier could lead to a succession plan When there is adequate time before the perpetuation plan goes into effect, the current owner can ensure the successor is properly trained and knowledgeable to run/takeover the business Multi-generational companies can make stronger decisions as they have a wider range of perspective Opportunity to execute on technology as a revenue driver, through data mining and analysis Getting to know each employee individually, as opposed to grouping them into their generation, will be the best way to communicate and reward that person Increasing reciprocal mentoring programs (pairing younger individuals with seasoned employees) to work on specific tasks will benefit both sides The percentage of women who feel there is bias for advancement in their company have reduced from 76% in 2014 to 68% in While still high, it is improving. Employers begin to focus on sponsorships by taking individual female employees and finding ways to open doors and make them more visible within the company for growth 4 P a g e 8 / 5 /

5 Threats: With few recent graduates being familiar with the industry, and so many insurance carriers and agencies nationwide, there will still be a shortage of new employees Formal training programs and taking current employees time to sit with interns may be too costly for smaller companies Short-staffed companies may not be able to dedicate the time to new employees for adequate training and on-the-job experience Lack of effective training for managers of remote associates may lead to failure to pass down tribal knowledge Associates with high workloads are not spending as much time mentoring younger underwriters, perpetuating lack of knowledge transfer. Many independent insurance agency owners plan that the sale of their business will help fund their retirement if they do not have a formal perpetuation plan in place, they may end up selling for much less than originally expected Not considering a perpetuation plan until too late could leave the successor in a bad spot and not set them up to keep the agency running successfully or smoothly A truly age-neutral workplace is difficult to achieve and the company may inadvertently be favoring one generation over another With each group having different motivations, it is not possible to offer different incentives just based on your generation/age, so there will always be people unsatisfied Perception that because women have children that they cannot adhere to the increased time needed at work at an executive level role 5 P a g e 8 / 5 /

6 Citations: Why You Need a Perpetuation Plan. Springtree Group. Springtree Group, 17 August Web. 21 March Biro, Meghan M. Recognize, Reward and Engage Your Multi-Generational Workforce. Forbes. Forbes Media LLC, 23 March Web. 21 March Boyes, Michael. 4 Keys to Managing a Multi-Generational Workforce. Property Casualty 360. ALM Media LLC, 26 September Web. 21 March Devillard, Sandrine. Why Gender Diversity at the Top Remains a Challenge. McKinsey & Company. McKinsey & Company, April Web. 31 March Donlon, Rosalie L. Finding the Right Employees: Recruiting Strategies from American Modern. Property Casualty 360. ALM Media LLC, 11 November Web. 04 February Emek, Sharon. Navigating the Multi-Generational Workforce of Today. Program Business. Neilson Marketing Services, 13 May Web. 14 May Gil, Lynette. 8 Ways to Attract Millennials to Insurance. Property Casualty 360. ALM Media LLC, 01 September Web. 04 February Hillebrand, Melissa. The Chalkboard: Millennial Mindset. Property Casualty 360. ALM Media LLC, 01 December Web. 04 February Hillebrand, Melissa. Here Are the Top 10 Schools for Insurance and Risk Management. Property Casualty 360. ALM Media LLC, 21 January Web. 04 February Holbrook, Emily. Women in Insurance and the Champions of Change. Property Casualty 360. ALM Media LLC, 27 July Web. 04 February Kaufman, Daniel J. Insurance is a Great Career. How Can We Let College Students and Graduates Know That? Property Casualty 360. ALM Media LLC, 13 November Web. 04 February Kissick, Mark. Attracting Bright, Young Minds to an Insurance Career. Property Casualty 360. ALM Media LLC, 09 November Web. 04 February Knight, Rebecca. Managing People from 5 Generations. Harvard Business Review. Harvard Business School Publishing, 25 September Web. 21 March Largent, Ed. 5 Ways You Can Help Recruit the Next Generation of Insurance Professionals. Property Casualty 360. ALM Media LLC, 01 February Web. 04 February P a g e 8 / 5 /

7 Moynihan, Shawn. What s YOUR Succession Plan? Property Casualty 360. ALM Media LLC, 01 February Web. 21 March Murphy, Susan A. Leading a Multigenerational Workforce. Washington D.C., AARP. Print. Oak, Catherine. Perpetuation Planning Part One. Insurance Journal. Wells Media Group, Inc., 20 October Web. 21 March Taylor, Nicole F. Tackling the Challenges of the Multigenerational Workforce. Business News Daily. TechMediaNetworks, Inc, 16 June Web. 21 March Yee, Lareina. Fostering Women Leaders: A Fitness Test for Your Top Team. McKinsey & Company. McKinsey & Company, January Web. 31 March P a g e 8 / 5 /