The insurance industry and the millennial workforce 

The insurance industry is in the midst of a talent crisis. According to the Bureau of Labor Statistics, in 2022, it was second-to-last in national industry rankings for recruiting new talent. Attracting and retaining talent is a concern across all industries, with 10.8 million job openings and only 5.7 million unemployed workers, according to the Bureau’s 2023 report. In my 25 years in insurance and technology, I’ve witnessed multiple hiring trends; however, this is a uniquely challenging time for the insurance industry.

An aging workforce

Hiring top talent is a particular problem for insurance companies. Most of our workforce is either at or quickly approaching retirement age. Nearly half a million insurance employees plan to retire in the next few years, according to the U.S. Bureau of Labor Statistics.

In addition, early- and mid-career workers are not flocking to the insurance industry. The Pew Research Center found that only 4% of millennials (generally defined as those born between 1981–1996) are open to a career in insurance. This dilemma creates an urgent crisis; that same study found that millennials are on track to make up 75% of the national workforce by 2025.

An outdated perception

It’s hard to point to any one factor as the reason millennials are reluctant to embark on careers in insurance. However, I believe an outdated perception of the industry is a factor.

The insurance space is perceived as slow-moving, lacking innovation and vitality, not very diverse, and packed with legacy technology and outdated business models.

Fortunately, the industry is undergoing accelerated digital transformation. KPMG’s 2020 CEO Outlook COVID special edition survey found that 85% of CEOs in the insurance space felt the pandemic jump-started both improving current technologies and creating next-generation operating models. Unfortunately, it seems public perception has yet to catch up.

Ironically, one solution to technological inertia is hiring a tech-savvy workforce. Digital natives who grew up with the internet, smartphones and transacting online. They are inherently early adopters because they matured during rapid technological advancement. The combination of seasoned insurance veterans who understand the industry fundamentals and new tech enthusiasts is the key to success.

What can we do?

The dilemma seems to be that millennials are turned off by the industry’s perceived lack of innovation, while often being the drivers of technological innovation themselves. A key strategy for recruiting and retaining millennials is to consider the preferences and values of this generation. Specific areas to focus on include…

• Modern work environment: Create a dynamic and flexible workplace with modern technology and collaborative spaces.
• Digital innovation: Embrace digital tools and technologies to streamline processes, reduce manual work and provide a tech-savvy business environment. Insurtechs, for example, present a tech-forward image and attract tech-savvy professionals.
• Career development: Offer a clear path for career advancement and professional growth through training, mentorship and learning opportunities. Leverage your seasoned talent to transition the tribal knowledge that exists in all our companies. Promote the rich and diverse opportunities that carriers offer, from Underwriting, Claims, Finance, Actuarial, and Marketing and the ability to help digitally transform an industry.
• Innovative products: Showcase how your organization innovates the insurance industry by offering new and unique insurance products that cater to younger generational preferences and lifestyles.
• Corporate social responsibility: Millennials are a values-driven group with whom robust corporate social responsibility programs resonate. To attract millennial workers, clarify values and demonstrate a commitment to social and environmental causes. Companies that positively impact society appeal to this generation.
• Company culture: Promote a diverse, inclusive culture that values collaboration, creativity, and open communication. Highlight employee testimonials and success stories to promote a positive work environment.
• Marketing and branding: Develop targeted marketing campaigns that appeal to millennial values, showcasing the meaningful work your company has to offer.
• Competitive compensation: Offer competitive salaries and benefits packages that include perks like student loan assistance, wellness programs, and paid parental leave.
• Recruitment events: Engage with colleges and universities to host workshops, webinars and networking events with colleges to reach talent early in their careers.
• Digital presence: Maintain an active and engaging presence on social media platforms, sharing insights about the industry, company culture and success stories to engage young professionals.
• Work-life balance: Promote a healthy and sustainable work-life balance. Millennials appreciate companies that actively embrace wellness, balance and anti-burn-out policies, including generous paid leave to enable employees to recharge.

Related: Managing millennials, Gen Y, Gen Z: Recruiting and retaining tomorrow’s workforce

The key to successfully navigating this talent crisis is to create a collaborative and diverse workforce combining seasoned veterans with tech-savvy digital natives and appealing to their respective values and preferences. The rich history and complexity of the industry, coupled with fresh, innovative ideas and modern technology, will help enable the industry to move forward and serve policyholders as never before.

Julie Schieni is vice president of Financial Services at InvoiceCloud. These opinions are the author’s own.