Where is workforce expenditure in insurance being spent?

Where is workforce expenditure in insurance being spent? | Insurance Business

Where is workforce expenditure in insurance being spent?

Freelancers, gig workers, a temporary fill-in for someone taking an extended sick leave – all of these types of employees can be part of a company’s external workforce, which encompasses anyone who works with an organization, but not for an organization.

There’s a good chance that your company has some workers who fall into this category. According to a recent report from SAP Fieldglass and Oxford Economics, around 43% of workforce spending across the insurance industry is directed to contingent workers and services providers already – and this relatively new trend is likely to continue.

“There’s an old idea that you call up a temp agency, for instance, when you need to backfill someone who’s on a family leave [or] someone’s on vacation and you need administrative coverage, and it’s typically been seen as a bit of a stop gap – ‘I don’t want an interruption so I’m going to get some folks in here to help me cover,’” said Brian Cicirello, a senior consultant at SAP Fieldglass with over a decade of experience keeping an eye on the external workforce. “What we have seen recently – and by recently, I’m referring to roughly the past five to seven years is really where it started – this is becoming a more and more critical component of an enterprise’s overall employment landscape.”

The skills of these employees are also changing. Whereas 10 or 15 years ago the typical external worker might have been on the administrative side of the business, today these employees hold an increasingly important role in an organization, which behoves companies to ensure they properly scale and train this workforce to protect their brand.

“We’re now seeing a rise in reliance on the external workforce for things like Tier 1 support where people are integral to customers’ experiences,” said Cicirello. Today, a customer’s first interaction with an insurer after being sold the product could be with an external worker who’s assisting them during the claim intake call, though there are other core insurance positions these employees often fill as well.

“I see a lot more adjusters and examiners, even all the way up to the actuarial space, than we used to,” said the SAP Fieldglass senior consultant. “Large insurance operators are enterprises that have technology needs and we also see a large growth segment within information technology in the industry.”

C-suite executives across the industry are already forming extensive external workforce strategies, especially since half their workforce expenditure is aimed at this group of employees, whose contributions are crucial to keeping the lights on for many organizations. In fact, the SAP Fieldglass report found that 51% of insurance executives say they couldn’t go about ‘business as usual’ without an external workforce.

Why the fuss around this labor group? They can help an insurance company operate at full capacity and meet market demands, according to 78% of executives, and they have skills that might be in scarce supply but are also in high demand, like a specialization in AI and machine learning or data science. The preference of an increasing number of people to work on a contract basis overlaps with some of these skills, which is why many executives look to this workforce. These employees might also have different backgrounds and experiences that help to move a company’s culture in the right direction, bringing in new voices with unique perspectives.

Looking beyond traditional channels of talent acquisition – your LinkedIns or job portals on the company website – is likewise becoming necessary as the importance of the external workforce grows. Three out of four insurance executives surveyed for the report expect to use on-demand, online marketplaces for freelancers in the coming three years.

“It is becoming an imperative for folks in the C-suite to take notice of this and to ensure that they are considering [that] how they go to market for their external talent is equally important in how they go to market for their core talent,” explained Cicirello.


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