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From Resource, July 2007
Copyright by LOMA
Industry Faces HR Challenges
The insurance industry faces
several challenges related to the retirement of the baby boomers, a trend that
will affect future recruitment and retention strategies.
Resource
recently asked Gregory P. Jacobsen to discuss human resource challenges facing
the insurance and financial services industry. Jacobson is an expert on the
insurance industry’s human capital marketplace. He is co-Chief Executive
Officer of The Jacobson Group, a human capital services firm dedicated
exclusively to the insurance, healthcare and financial services arena, providing
solutions through executive search, interim staffing, consulting and
outsourcing. The questions and answers follow.
Q: What do you see as the
biggest human resources challenges facing the insurance/financial services
industry?
A: The biggest challenges
facing the industry from a humanresource perspective relates to the age and
expectations of the workforce. The oldest baby boomers are just beginning to
retire, commencing a process that will result in a significant shift in the
supply and demand balance within the talent market. It will be critical for high
performing companies to refine their recruitment, retention and development
strategies.
Concurrently, the expectations
of workers today are different than those of previous generations. Whereas
previous generations were prepared to make lifestyle sacrifices for their
career, workers today are looking for flexibility and expect work/lifestyle
balance. The combined effect of these changes will be greater competition for
top talent.
Q: Do you see a “brain
drain” ahead for the insurance industry as the baby boom generation retires?
If so, how can the industry cope?
A: Unfortunately, our industry
is going to be hit hard by the retirement of the baby boomer generation. Many
organizations are not prepared for this coming challenge because training and
development programs have lost favor in the drive to cut costs. However, there
appears to be a silver lining as many studies show that a high percentage of
baby boomers want and expect to work during retirement. Some organizations are
already taking advantage of this through the development of flexible work
schedules that cater to the desires of
retirees. The mindset of many companies will need to change, but there is a gold
mine of knowledge that will be available under the right circumstances.
Q: Discuss the role of human
capital as a factor in the success of a financial services organization. How
should the industry develop human capital?
A: The highest performing
companies place a premium on attracting and retaining ‘A’ players. Top
performers allow financial services companies to be innovative, react quickly to
change and attract other ‘A’ players. These high performers will become more
difficult to find in the near future. Therefore, companies must make a
commitment to identifying and developing individuals with this potential. The
core human capital functions of staff recruitment, retention and development
will be an integral part of the strategic plan of high performing organizations.
Q: The insurance industry is
facing many changes, such as increased competition, globalization, and new
markets. How can the insurance industry recruit management talent that will be
successful in new markets and a drastically changing business world?
A: One thing that I believe the
industry must do more of is look to other industries for fresh ideas. As an
industry, we have been too insular, preferring to recruit based on background
instead of skill set. There are other industries that are naturally leading the
way in a changing global business environment and transferable skills exist in
those industries.
Q:
What are the qualities an insurer should look for when searching for upper
management candidates?
A: Integrity, commitment, a
track record of success, common sense and leadership skills are the foundation
qualities. Cultural fit and a sense of corporate purpose shared with the board
and senior management are also required for success.
Q: How would you define
“leadership” for the insurance industry? Which is more important to a
company’s success, having a top executive who is a good leader or a good
manager?
A: Leaders clearly define a
vision and point the organization in the
direction for success. They inspire people to achieve at the highest levels,
rally people around an organizational cause and guide an organization through
change. Leaders and managers are both required for ultimate success. Managers
put in place tools and processes to implement and measure the organizational
drive towards its vision.
Q: How do you develop a staff that can
handle and adapt to change?
A: First and foremost, a culture that
embraces change is imperative. Setting an expectation that a dynamic
organization is required for future success is required. This is done by
rewarding change, not making it punitive. Communication is incredibly important
at all levels within an organization and is often overlooked. Change must be
communicated early and often in a logical and forthright manner.
Q: What positions are the most
challenging for the insurance industry to fill today and why? How can this be
addressed?
A: Obviously, there are certain
disciplines that will always be difficult to recruit for. Finance and actuarial
immediately come to mind. However, without a doubt, the most difficult positions
to fill are those that require an ability to lead complex organizations that
face a multitude of diverse issues. Financial services executives must
understand how to navigate through the maze of regulatory, financial and global
cultural issues within a constantly changing business environment. There is no
short answer to the challenge of addressing the human capital needs in our
industry. I suggest that this is a challenge that requires a long-term strategic
approach. Companies need to renew their commitment to professional development.
Q: How can the industry best
retain its talented people?
A: Recent surveys indicate that
workers at all levels are primarily concerned with fair pay, professional
challenge, corporate culture and flexibility. Our industry must position itself
as a leader in these areas, especially compared to the industries that compete
for the same talent —investment banking for example.
Q: Any other comments you care
to make on HR for the industry?
A: Human capital is the most important
resource in the industry. With rare exception, companies are not successful
primarily because of their technology, capital structure or product base. The
highest performing organizations in our industry reach the pinnacle because they
have talented people moving in the same direction with an eye towards the
future.
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