One of the biggest challenges – some might say a crisis – facing the insurance industry is recruitment and job retention. There are a record number of job vacancies in the industry, with total employment down by 85,000 from 1.56 million just two years ago. One recent survey showed layoffs falling to a 10-year low and a 10-year high in the number of people leaving work.

Moreover, talent advisors say, the industry is “getting old,” with a large number of workers facing retirement in what is called the “Great Retirement.” Recruiting new talent is a challenge because insurance does not top the list of opportunities for young people or university graduates looking for work. The US Bureau of Labor Statistics said in the first quarter of this year that there were 386,000 jobs available in the insurance sector in the areas of technology, actuary, analytics, claims and underwriting. An annual insurance industry job market study conducted this year by Jacobson Group found that difficulty in hiring remains high, with companies saying that nearly all jobs remain difficult to fill.

In total, 25% of companies said that the ability to hire talent has become more challenging compared to the previous year. About 29% of Life/Health companies feel they have worsened, compared to P&C companies’ 23%. Large companies were the most difficult, with 27% answering that it was more difficult, compared to 21% and 20% for small and medium-sized companies, respectively. Total industry turnover, both voluntary and involuntary, has been nearly 15% for the past 12 months.

Recruitment consultant cited in Financial Performance

In light of this, a line in Northwestern Mutual’s annual financial results for February jumped off the page. The company partly credited its record financial performance to its investment in the recruitment and development of new advisors, “which ended the year with approximately 7,500 full-time financial professionals, the largest and most diverse group in the company’s history.”

When asked if Northwestern Mutual lags behind industry peers when it comes to hiring and retention, the officials there agreed it probably is, but they also agreed that the hiring challenge is tough.

“The industry does not have the capacity to meet the demands and needs of society in this country,” said John Roberts, Northwestern Mutual’s vice president of Field Talent & Performance. “There are fewer financial advisors than there were 15 years ago and our average financial advisor is getting older every year. We are not replacing that talent with new talent.”

But Roberts believes Northwestern Mutual has an edge over its peers when it comes to recruiting and retaining them. The company has grown the number of financial advisors in a row each year since 2011.

“One of the things we’re proud of at Northwestern is that 99% of the new advisors we license and sign up for each year are organic,” he said. “So we are new talent in the industry that we train, develop, and put on a path to being able to build a career in financial planning and impact their communities.”

Retaining an employee is a struggle

However, Roberts said, it’s a low-return strategy when it comes to employee retention. The company hires 2,500 to 2,700 new full-time consultants each year and within five years only 300 to 350 are still working with the company full time. This seems low but is likely a higher percentage than the industry as a whole.

“When you look at Northwestern in relation to the industry, we stand apart because most of the industry seems to be focused on finding talent that might be a better fit for someone else’s model of theirs, kind of business talent from a single broker-dealer or a handful of Companies that are growing organically, but we are committed to bringing more consultants into the industry. We think it’s easier to connect people from the start than trying to push them away. So, I think we’re a little different in that regard.”

However, Roberts said, hiring is “very difficult” in the current environment.

“Being a joint stock company, we have a little benefit of not having to meet quarterly earnings requirements, and we can make investments that have a really long tail,” he said. “I think for a company that has a short-term approach, that’s a real challenge. But it’s really tough, either way. The insurance space is definitely not attractive to Gen Z or job seekers.”

The key to improving staffing in the insurance industry, Roberts said, is to diversify ranks and have a workforce that reflects the market you need to serve them.

“About half of our recruit advisors are women or people of color,” he said. This has been the main source of growth for us over the past five or six years. In fact, if you look at our white male-only advisors, we’ll have very modest growth. So, I think that’s number one if we’re going to grow, we’re going to attract new talent, we have to continue diversifying.”

Doug Bailey is a freelance journalist and writer who lives outside of Boston. It can be accessed at [email protected].

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