Why a diverse benefits industry matters (and how to make it happen)

In an increasingly diverse world, the benefits community is struggling to create a more diverse and inclusive workplace. According to the US Equal Employment Opportunity Commission (EEOC), there are 196,750 officials and managers working for the insurance industry. Of those, the number of women serving as officials and managers topped out at 47.9%. Non-white workers were even more scarce: 6.4% of management-level employees are Black, 3.1% are Hispanic, 2.1% are Asian, and just 0.3% are Native American.

Even more telling are the percentages of various minority groups in insurance: Just 6.7% of Black women are part of the industry, and Asian and Hispanic women make up just over 2.5% of the industry.

It’s little wonder why, when the push for a more diverse workforce ramped up, the insurance community took it seriously. Just a few short years ago, organizations across the country were laser-focused on diversity, equity, and inclusion (DEI) initiatives. The addition of new DEI roles illustrated the corporate world’s buy-in to a concept that more diversity means a more profitable and productive workforce. 

It was an impressive buy-in: Between 2015 and 2020, head of diversity jobs grew by 107%; director of diversity jobs by 75%, and; chief diversity officer jobs by 68%, according to Society for Human Resources Management (SHRM) data. Indeed.com job postings between September 2019 and 2020 showed a 56.3% increase in the number of jobs involving diversity, inclusion, and belonging. And LinkedIn data show that chief diversity and inclusion officer positions spiked by 168.9% between 2019 and 2022.

But that was then. These days, the push for DEI seems to have hit a wall. As a sluggish economy gripped the country, DEI efforts were the first to be hit by layoffs. A Revelio Labs report found that DEI roles have more employee turnover, and that DEI positions dipped by 19% in 2022.

Beyond layoffs, other factors are at play. Increasing political scrutiny over DEI, according to Pew Research, as well as a general malaise at the C-suite level over the importance of a diverse workplace, reveal that companies are simply not that committed to implementing a full-scale DEI-focused workplace culture. As the data suggest, companies increasingly view DEI efforts as dispensable. 

In fact, a 2021 MarshBerry report reveals that diversity efforts in the industry are faltering, with women “drastically underrepresented” in the roles of ownership, executive-level management, and production. Just 19% of executives in the insurance brokerage industry are women, the report states.

Also, the lower the revenue, the less likely an organization is to focus on DEI. A 2022 MarshBerry Compensation Study found that while larger firms (>$20 million in annual revenue) have a DEI program or strategy in place, just 10% of companies with less than $5 million in annual revenue have a formal plan.

Reading the room

Yet as an industry that is struggling to attract job seekers, the broker community cannot afford to overlook a factor in their workforce that is sought after by those same job seekers. In a Gallup poll, a surprising number of employees – 42% – want to work for an organization that offers a diverse and inclusive culture.

Other studies show similar results: A 2022 GoodHire survey reveals that 70% of employees want to see meaningful progress in DE&I in their places of work and expect their employers to invest time and resources toward that effort. And a CBS/SurveyMonkey Workforce Happiness Index report found that 78% of workers say it’s important to work for a company that prioritizes diversity and inclusion, with 58% saying it is “very important.”

It’s not simply a matter of giving employees what they want; it’s also about how a more diverse and inclusive environment can improve business. Large corporations are pushing to make DEI a more integral part of the business model. In a letter to the U.S. Supreme Court before its June decision overturning affirmative action, several major companies, including Apple, Google and Starbucks, argued that “racial and ethnic diversity enhance business performance.”

The numbers bear that out. A Boston Consulting Group study found that organizations with policies and practices that supported diversity saw an increase of 12.9% in “innovation revenue.” The BCG data also show that those companies with above-average diversity delivered 45% more revenue associated with innovation, thus improving overall financial performance of the company.

Hiring a strong DEI culture

Embracing diversity and inclusion can bring measurable benefits, including employee attraction/retention and stronger team performance. A better DEI program in your broker business can be accomplished with just a little effort and a few key changes to your current business model. That starts with building a better, more balanced hiring process.

When it comes to hiring, we suggest the following:

Retool your hiring process. We at Work At Home Vintage Experts (Wahve) have implemented a blind hiring process. The first interviews are always screenings without video. Such blind screenings work to improve diversity: A study conducted by researchers at Harvard and Princeton in 1997 revealed that gender diversity alone increased from 25% to 46% when symphony orchestras used blind auditions to vet musicians.

Review your job listings. Often, our biases slip into the language of job postings. Avoid gender pronouns and any language that could discourage or disqualify a job seeker based on gender, ethnicity, or religion. Avoid requiring a college degree, unless essential. According to SHRM, 64% of working-age adults do not hold a bachelor’s degree.

Introduce skills testing. Skills testing for both hard and soft skills gives recruiters a way to objectively measure a candidates’ potential by providing them a more accurate sense of a candidate’s fit. Testing can also help employers find candidates who will stay. A Harvard Business School study found that employers that used job tests hired workers who stayed on the job 15% longer than workers who weren’t tested.

Interview objectively. With skills tests in hand, employers and hiring managers are well-equipped to assess a candidate’s fit. From there, employers can contact the top candidates for interviews. Interview questions should be standardized to ensure objectivity. We suggest conducting three interviews, each with different managers. The combined opinions of the managers significantly increases the success rate of the hire.

Embrace innovative staffing options. Nontraditional staffing alternatives can expand the candidate pool significantly, as well as increase talent retention. Particularly within the broker and insurance community, finding and tapping into expertise is an ongoing, growing challenge. By expanding where you look for candidates – and by removing ageism barriers – your organization can cast a wider net. Try instituting flexible remote work arrangements, flexible hours, and hybrid possibilities to help attract and retain the talent you need. That allows you to keep valuable employees who may have to relocate or have family obligations that make commuting difficult. Another way to improve the culture is by re-engaging the skills of retired industry professionals in a work-from-home arrangement. These workers can augment your staff, can be mentors and pass along a wealth of knowledge, or can become an integral part of your operations.

Examining the foundation

Yet no matter how good your DEI-focused hiring process is, it’s only as strong as the culture in your organization. None of the changes you make to your hiring process will matter if the culture won’t support the effort. 

That’s why we also suggest that you evaluate your culture. Where are the shortcomings in your current workplace culture? How would DEI efforts fall short if they aren’t remedied? Things to consider include your management team. How diverse is it? Where are you seeing unconscious biases? Do employees feel there is a safe way to report incidents of bias or discrimination?

For your DEI program to be successful, you need to get leadership buy-in. Senior leadership should not just accept the efforts, but make these efforts a priority, particularly when developing operational objectives.

Training for every member of the organization is a must. Topics should include unconscious microaggressions and bias, and how to rethink interactions, communication, and team building. Every effort should be made to improve the cultural attitudes that employees bring to the job.

Once your foundation is strong, keep it that way with regular evaluation of your diversity efforts, your hiring practices, and your promoting efforts. Put responsibility on leadership to ensure that they are aligning their efforts with your DEI strategy. Make every member of staff accountable for maintaining and promoting a more inclusive, diverse culture.

Implementing success

As the labor market constraints continue, the benefits broker community need not struggle to attract and retain employees. Data and studies show that when employers offer and actively support DEI initiatives in the workplace, employees are more satisfied, more engaged, and report higher performance levels. 

Despite the current swing away from DEI, benefits brokerages that embrace the positive outcomes associated with a more diverse and inclusive culture can stand out to job seekers. Not only that, they can improve the morale within their organizations and reap the benefits of putting talent ahead of bias. It’s a strategy in which everyone wins.

Sharon Emek, Ph.D., CIC, is founder and CEO of Wahve (www.wahve.com), a talent solution provider to the insurance industry.