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Why the Insurance Industry Needs to Improve the Candidate Screening Process

Posted by Rick Lepsinger May 14, 2019


Few fields are facing a greater talent crisis than the insurance industry. Even though insurance companies continue to thrive, setting records with a series of recent mergers and acquisitions, the future of the industry’s workforce remains murky at best. According to McKinsey research, the average age of an insurance agent is 59 years old. The median tenure for employees approaching retirement age is 10.3 years, making them some of the most experienced and valuable people within their companies. Over the course of the next decade, however, nearly half a million of these employees are expected to retire, taking their accumulated knowledge and expertise with them.

Despite hiring people in record numbers, insurance companies are still struggling to replace this growing number of retiring employees. The resulting talent gap could potentially have a negative impact on the industry’s ability to deliver products and services to customers in the future. Part of the challenge facing recruiters and hiring managers in the coming years will be finding ways to rethink the candidate screening process to shore up their succession pipelines.

Behind the Hiring Times

The unemployment rate within the insurance industry stood at 2% in 2018, significantly lower than the national rate of 3.9%. That means competition for qualified applicants will be high, while the applicants themselves have significant bargaining power and choice. Unfortunately, many insurance companies are still utilizing the same recruitment strategies from a decade ago, a period marked by high unemployment and a large pool of qualified applicants. Sometimes called a “screening out” approach, this recruitment process could afford to take its time in an era of abundance. Getting from the initial application to an offer and acceptance could take anywhere from a few weeks to a few months. Throughout the process, the candidate could be subjected to multiple interviews with multiple managers, reference and background checks, and various forms of assessments.

In a tighter labor market, however, a long recruiting process can cause companies to miss out on top talent. More importantly, today’s insurance companies aren’t just competing with each other, but with a variety of other industries that are using more effective recruiting strategies to compete for the best young talent.

Learning to “Screen In”

To fill these positions, insurance companies will need to turn to a younger generation of candidates, most of whom have very different expectations and interests than the industry’s predominantly baby boomer workforce. Millennials are often distinguished by their job mobility, with the employees between 25 and 34 typically remaining in a position for about three years (which, incidentally, is in line with historical trends among this age group).

More importantly, only about four percent of millennials claim to have any interest in seeking a job in the insurance industry. Part of the problem is perception. Young people tend to view the insurance industry as an “old-fashioned” field that doesn’t offer much excitement or opportunity for meaningful professional growth.

In reality, however, the insurance industry is undergoing a rapid technological shift that’s transforming the way customers access insurance products and services. Many of those innovations are also changing the way insurance agents, home office personnel, and adjusters engage with customers. Working in the insurance industry also provides public service-conscious young people the opportunity to make a marked difference in the lives of their communities.

Finding these people and drawing them into the insurance sector will require recruiters and hiring managers to take a “screening-in” approach that focuses more on engaging with candidates over the right channels. The insurance industry does not, for example, make extensive use of social media as a recruiting tool, even for entry-level positions. More importantly, insurance job postings rarely go beyond establishing the basic qualifications for a position, when they should be using a listing as an opportunity to communicate why someone would want to work for the company. A bit of exposure to company culture, leadership philosophy, and other unique characteristics can go a long way toward setting the organization apart from other potential employers.

In addition to shortening the recruitment process to be more competitive with other industries, companies should also think about how to present a career in insurance as a great opportunity that appeals to an applicant’s values. This could include emphasizing the need for innovation, promising to put them at the heart of exciting change initiatives, or focusing on the potential for career growth and ongoing skills development. With a looming talent gap facing the industry, there will be plenty of positions available for candidates who demonstrate leadership potential.

By thinking less about what a candidate can do for an insurance company and more about how entering the industry provides them with a wide variety of opportunities, the industry can take the first steps toward a recruitment process that is more competitive for young talent. With so many employees transitioning into retirement, it’s crucial that recruiters and hiring managers think about incorporating new candidate screening tools that can better identify people who might have the potential to become effective leaders and engaged team members.

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Topics: insurance industry

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