Millennials make perfect employees in the right job.
By Susan R.A. Honeyman
Causes for the Dismal Forecast
At year-end 2013, more than 10.4 million people were out of work and looking for jobs, according to the Bureau of Labor Statistics, so it seems odd to imagine a looming labor shortage in the insurance industry. Yet the Independent Insurance Agents and Brokers of America (IIABA) found the average age at agencies trending up to 51 and anticipates 60% of agency personnel will retire in the next five years, according to the Madelyn Flannagan, vice president of agent development, research and education.
Many in this industry are reflecting on its mature workforce and expressing concern that the retirement of boomers (born between 1946 and 1964) could create more job openings than there are people qualified to fill them.
In some cases, "qualified" may be the operative word. While new college graduates often have difficulty finding work in their chosen fields, insurance is different. Meg Allwein, vice president and chief quality officer at Columbus, Ohio-based Assurex Global, reports that "nearly 100% of students graduation with insurance or actuarial science degrees are finding jobs."
Most are finding their first jobs with carriers because insurace companies typically have more jobs to offer. In addition, insurance companies' larger scale often allows for better-developed on-boarding programs, with formal training and orientation, than most independent agents and brokers can offer, she said.
The cost of training is an obstacle, especially for smaller agencies that average six or seven employees, says Spencer Houldin, president of Ericson Insurance Advisors in Washington Depot, Connecticut, and an executive committee member of the IIABA. "Hiring a smart college graduate who doesn't know the first thing about insurance typically will require an investment of more than two years and $100,000 before the break-even point. And after training, that person may get a better offer and leave, or theny may just not work out," he says.
John Losurdo, chief operating officer at Roach Howard Smith & Barton in Dallas, adds: "One source that we like to consider talent from is the carrier side. Most do a good job of recruiting and training, and if the experienced underwriter is later looking for a career change, we may be a good fit," he says.
So filling insurance positions vacated by the estimated 50,000 to 70,000 people retiring from the industry positions each year requires not only attracting young people, but attracting them earlier-in high school or at the start of college-so they are more insurance-literate and better hires when they start their careers.
Meet the millennials
Assurex Global's major study of generational attitudes in the insurance workplace reveals millennials to be high achieving, very deliberate in the work they seek, and also very likely to be loyal employees when their needs are met.
"As a generation, they were raised with a plan-guidance in school, training in athletics-so they are used to having a playbook to follow. If they find what they are looking for in terms of a career path with their first employer, they are more likely to stay with that employer. If the employer does build a career path and provide the training and feedback they are looking for, they will be very loyal," says Allwein.
Assurex also cited the Millennial Generation Survey, by The Griffith Insurance Education Foundation in conjunction with the Institutes that found high school students generally had no impression of the industry beyond, perhaps, the knowledge that their parents' auto rates go up when they get their driver's licenses. There is no television program like "CSI" to showcase the diverse and interesting opportunities within the insurance industry and help them to consider this as a career, she says.
"I'm 44 and a second-generation agent. I recently attended a (IIABA) task-force meeting with seven young agency leaders from various cities and realized that five of them were in their family's agency," Houldin says. Of the two remaining, one came from a carrier and the other was recruited by an agency principal who played golf at the country club with his father. For most young people, insurance simply isn't on the radar.
He is very concerned. "We are at a mission-critical point when we have people retiring in doves and we are unable to get experienced people to replace them. We are losing great talent and replacing them with people of very limited experience. That's the issue," Houldin says.
Research shows that millennials choose colleges based on the work they've decided to do, so it's important to attract them early, Allwein noted. She suggests hiring one or two interns, giving them meaningful work and grooming them for entry-level positions.
Introducing the industry
In 2011, the Griffith Foundation held a three-day Insurance Education Summit, gathering leaders from across the industry to try to head off a potential personnel shortfall, recalls Peter L. Miller, CPCU, president and chief executive officer of The Institutes in Malvern, Pennsylvania, and also head of the board of directors of the CPCU Society and The Griffith Foundation. The leadership symposium determined that there are three actionable items important for the industry's continued growth: research, message development and spreading that message.
"We had already done the research into what millennials wanted in a job, and happily it turns out that many of the characteristics that young people look for in a job are in tune with what the industry actually does," says Miller.
They want very much to help people, and insurance provides the chance to "restore people's financial state after some of the worst times in their lives. Think hurricanes and tornadoes and you can see how this resonates," Miller continues. The industry abounds with opportunities to use critical thinking and problem solving, which in important to millennials, plus the variety of jobs provides a place for people with different skills and interests. Finally, millennials want to give back to the community, and those kinds of opportunities abound, especially within agencies, he says.
The institutes was designated by the industry to develop a targeted technology platform to encourage young people to explore the industry and to help them prepare for jobs. They are soliciting ideas and comments from other partifipating industry organizations to make it a richer experience. In January, it began testing content and branding with millennials, including potential URLs, to make the platform relevant and effective.
Ultimately the technology platform will house what Miller calls "five separate pillars."
Efforts to attract and train insurance people are not new, of course, and many are successfully adding financial and insurance literacy to the school curriculums. The IIABA launched InVEST in 1970 after recognizing the need for the independent agency system to perpetuate itself by providing good training for high school students, says IIABA's Flannagan.
"Today InVEST works with over 500 educators in 46 states, and almost 19,000 students are learning about insurance and the career opportunities within the industry. Scholarships and connection with the insurance industry are offered to students as they graduate and seek employment or additional education," Flannagan says.
Based on Allwein's conversations with member agencies and her involvement with Gamma Iota Sigma, the fraternity for students pursuing careers in insurance, risk management and actuarial sciences, she believes more students are graduating with insurance or actuarial science degrees. That helps decrease the learning curve so they can fill the jobs opening up at agencies and companies.
There are also unusual programs for nontraditional students that can be a source of employees. Allwein noted that Disabled Veterans Insurance Careers (DVIC), a Florida-based non-profit, is having some success placing disabled veterans in insurance positions. The organization trains these veterans for jobs as customer service representatives, producers, sales managers, and even senior account executives, then tries to place them with an agency or company or will hire them and lease out their services. (Note: The Rough Notes Company awarded DVIC its Community Service Award in 2012 and Rough Notes Publisher Walt Gdowski is a member of its governing board.)
Susan R.A. Honeyman is a freelance writer based in New Haven and vice president of Word Hive Communications LLC.