While insurance companies appear to be more conservative in their plans to add staff than they were six months ago, a new study shows that more than 39% of companies plan to increase staff in the next 12 months, with only 15% planning to trim their workforces in the same period.
The figures from the most recent Jacobson Group and Ward Group “Insurance Labor Market Study” compare with 44% of those surveyed in January indicating that they expected to increase employees and 13% indicating that they expected to decrease employees.
The figures still show improvement in hiring expectations over results from the July 2009 survey, when only 35% of companies expected to add employees and 21% expected to reduce staff in the 12 months ahead.
“To me, the great thing about this survey…is now we’re being able to see some trends in terms of how people are anticipating revenue growth and how that translates into hiring staff,” said Greg Jacobson, co-CEO of the Jacobson Group in Chicago.
The June and July survey of 118 U.S. property/casualty and life/ health insurers companies—the third such survey conducted by Chicago-based staffing and executive search firm Jacobson Group and Cincinnati-based consulting firm Ward Group—has found that 61% of companies anticipate revenue growth over the next 12 months. The percentage of companies expecting revenue growth is down slightly from 63% earlier this year, but up from 54% a year ago.
“What we’re seeing is companies are probably less confident about the recovery than they were six months ago,” Mr. Jacobson said. “Companies are still seeing growth and opportunities for growth…but there’s trepidation with that because they’re not as willing to go out and hire staff as they were six months ago.”
Jeff Rieder, president of Ward Group, said the survey shows that despite declines in premiums and rates in the commercial lines sector, demand remains high for commercial lines underwriters and marketing professionals.
The survey suggests that most commercial lines insurance companies’ strategies are to reinforce agency relationships and add the right underwriting and sales pieces, he said.
And, Mr. Rieder said, while the conventional wisdom might be that it would be slightly easier to fill positions in the current economy, that’s not proving to be the case in areas such as actuarial executives.
“It’s not that there aren’t people out there wanting to be hired, it’s also finding the right person that fits into the organization,” Mr. Rieder said.
“We’re finding positions in that particular niche extremely difficult to fill,” Mr. Jacobson said of commercial lines companies, particularly in specialty markets.
National unemployment statistics give a false picture of what’s happening in the insurance industry labor market, Mr. Jacobson said. “The unemployment rate in the insurance industry is nothing close to that in the general economy,” he said, particularly with regard to high-level executive positions.
“That’s not surprising given that the insurance industry is a little bit insular. People tend to come up through the industry,” Mr. Jacobson said. “That in itself creates a limited supply of talent.”
Because of that disconnect between insurance industry labor market conditions and the general economy, insurer hiring managers tend to have false expectations about the ease with which they’ll fill positions, he said.
Mr. Rieder noted that when insurance companies have engaged in reductions in force, those moves typically have been targeted at mid-level employees. “By doing that, they’ve depleted some of their bench strength,” he said. “That’s one of the reasons you’re seeing it very difficult to fill these actuarial executive positions.”
Of the companies participating in the July survey, 86% were property/casualty companies and 14% life/health insurers.
The survey shows that life/health companies’ hiring plans are more focused on technology and actuarial hiring than on the property/casualty side, Mr. Rieder said, adding that he expects that trend to continue among health insurers as they look to address some of the new demands of federal health care reform. “Our instincts are you’re going to see a lot more focus on automation and technology.”
Insurers continue to appear particularly susceptible to a talent gap as baby boom employees retire.
“Nothing has changed in terms of the demographics of the industry being older than the economy in general,” Mr. Jacobson said. “So there is going to be a gap.”
In response, some companies are offering early retirement incentives, “which is counter to what you’d think,” Mr. Rieder said. But in fact, those companies are trying to manage their way through that gap by creating a tiered approach to the anticipated retirements, rather than getting hit by a large wave all at once, he said.
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