Bringing new blood into the industry is needed now, as the first wave of baby boomers are leaving insurance faster than they are being replaced, says an analyst.
“The numbers we see are like the ‘service engine soon’ light in your car,” says Richard Loreto, president of R.A.L. Consulting Limited, and a regular consultant with the Insurance Institute of Canada, and author of the study, Insight into Canada’s Labour Market, and How it is Impacting the Insurance Industry. “It isn’t going to break down tomorrow, but if we don’t take care of the problem soon, there will be trouble.”
Proactive recruitment is key to ensuring there isn’t a dearth of insurance workers, he says, and there are key positions that require a special effort to entice those in college and university into the field. And that should start now, as the impact will of those leaving the industry will be sorely felt a decade from now.
“How difficult is it to recruit? The customers service and technical support positions in claims, like entry level, are easy to fill,” says Loreto. “Actuary, accident benefits, claims adjuster/examiner, those are more difficult to recruit.”
According to Loreto, Alberta and British Columbia remain the most difficult provinces to recruit in – but there is one nationwide constant in recruitment: family and friends. (continued.)
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“A full 44 per cent of those in the industry told us that they had a referral from a family member of friend who was working in insurance,” he says. “And accommodating work-life balance issues have increased considerably from 2007 to 2012, from 21 per cent to 54 per cent. Which is an advantage for the insurance industry, as those can be accommodated – making recruitment less difficult.”
According to the research, the only industries that are replacing their workforces are Trade; Information Culture and Recreation; and Accommodation and Food Services.
“There is a greater share of the workforce over the age of 40,” says Loreto. “Some industries are aging more quickly than others – insurance is one such industry.”
The statistics also show a shift in when people are choosing to retire, and how that retirement has changed since the 1990s – and how the industry needs to rethink what can be done on a full-time and part-time basis.
“The historic assumption with statistics, when you hit 55-64 you are more likely to retire. That looked like a sure bet in the 1990s,” Loreto told Insurance Business Online. “We now have the boom phenomena, with those retirees choosing to work part-time. Now, historically, those have been full-time jobs. That may mean we as an industry have to rethink how we hire and shape those positions.”
Labour force projections show that those 55 years an older, currently making up 14 per cent of the labour force, will by 2031 make up 23.6 per cent of those employed in Canada.
For the insurance industry, those percentages are higher. (continued.)
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“For every 10 employees, the industry has only recruited four under the age of 25,” says Loreto. “The aging workforce, that is the share of the ‘echo’ cohort that has increased at the expense of the share of the boom cohort,” he adds, referencing David Foote’s best-selling and oft-quoted book, Boom, Bust and Echo.
It is that book that examined those people born in the early 1960s to late 1970s who believed the future was theirs; that as they aged employment and prosperity would be passed along. Instead, this “Generation X” complained that they were being driven into a recession-driven workplace that offered little more than “McJobs” – the first generation to be worse off than their parents.
