By Maria Sassian, Triple-I Consultant
If you didn’t quit your job this year, chances are you’re thinking about it: 41 percent of the global workforce is considering leaving their employer this year according to a Microsoft study.
U.S. workers are quitting in record numbers: 4.3 million resigned in August, nearly 3 percent of the U.S. workforce and the most in the 20 years since Department of Labor began keeping track. This followed 3.98 million resignations in July and 3.99 million in April.
While the reasons so many workers are quitting now are often related to low wages and poor working conditions, the pandemic has also led many people with “good” jobs to reevaluate the role of work in their lives and to pursue jobs that are more meaningful to them. The mass exodus has employers worried.
According to a Gartner survey of human resource leaders, 91 percent are “increasingly concerned” about employee turnover in the near future. Employee turnover costs U.S. businesses close to a trillion dollars a year, by some estimates (made before the pandemic).
What does this mean for insurers?
To shed light on how the Great Resignation is affecting the insurance industry, we turn to the Jacobson Group’s Insurance Labor Market Study conducted in third quarter of 2021 jointly with Aon. The study found that insurance professionals who were waiting to make moves earlier in the pandemic are now exploring their options and re-evaluating their positions with their current employers – a situation that makes recruiting, especially at experienced levels, “extremely competitive.”
Other key findings from the survey include:
- 56 percent of companies plan to increase staff during the next 12 months, driven by the life/health segment, at 73 percent;
- If the industry follows through on its plans, a 1.81 percent increase in industry employment is expected during the next 12 months;
- Understaffed areas and business expansion were the top two reasons cited for increasing staff;
- Technology is the area most likely to increase staff for large companies, followed by sales/marketing and underwriting;
- Medium-sized companies want to increase staff in technology, followed by analytics;
- Small companies have the greatest need for technology talent, followed by claims;
- Technology and product management are the top two areas in which companies are looking to add experienced staff;
- Technology, analytics, and actuarial positions are the most difficult to fill; and
- Operations and actuarial roles were identified as areas most likely to add entry-level positions.
Not all insurers are looking to hire more workers; 13 percent report that reorganization and automation will be the primary reasons for staff reductions during the next 12 months.
What companies can do to retain talent
Leaders are advised to become more methodical in how they keep valuable human capital from walking out the door. According to Anthony Klotz – the professor of management at the Mays Business School at Texas A&M University credited with coining the term “Great Resignation” – employers often don’t give enough thought to the off-boarding process and employees often don’t give the real reasons that they are quitting. Instead of just having an exit interview in which employees are asked why they’re leaving, he suggests talking to their coworkers and friends at the company who will be aware of their actual reasons.
Once the main causes of turnover are identified, a company can create customized programs to correct these issues. According to Ian Cook, an HR strategist, “adopting a truly data-driven retention strategy isn’t easy, but it’s worth the effort to do it right, especially in the current market…. With greater visibility into both how serious your turnover problem really is and the root causes that drive it, you’ll be empowered to attract top talent, reduce turnover costs, and ultimately build a more engaged and effective workforce.”
Of course, salary and benefits are still important in retaining and recruiting. Sixty percent of American employees say the COVID-19 crisis has caused them to think more carefully about the benefits their employer provides and about 68 percent anticipate their workplace benefits to play a more critical role in their future job selection, according to research from Voya Financial, Inc.
Many workers report feeling overwhelmed and depleted, a condition the pandemic has exacerbated. Employers can use the pandemic as an opportunity to offer an outstanding employee experience by listening and engaging with their workforce. After surveying hundreds of workers, McKinsey has identified several factors that go into the creating the right environment. They include: a sense of social cohesion, and purpose; collaborative teams; clear responsibilities and opportunities to learn and grow; an organizational sense of purpose that aligns with workers’ personal values; and a suitable physical and digital environment that gives them the flexibility to achieve a work–life balance.
People who report having a positive employee experience have 16 times the engagement level of employees with a negative experience, and they are eight times more likely to want to stay at a company, McKinsey research found.