Recruitment: The End of Happenstance

One of the fundamental questions a journalist asks when profiling a person involved in the insurance industry is: “How did you end up working within the insurance industry?”

Almost invariably the word “accident” appears in the resultant story. The typical industry recruitment anecdotes go something like this: “I was trying to decide between a Master’s in Business Administration and a graduate diploma in Clinical Psychology. While I was trying to decide…”

(Choose from one of the following endings.)

(a) “…my Dad and Mom, who owned/managed an insurance brokerage, had me work for them during the summer and I never left;”

(b) “…my friend/relative told me the insurance company they worked for was hiring. I applied and 30 years later I’ve never looked back.”

In these and other common stories, insurance is never the vocation sought in its own right — it is often seen as a diversion from a different (if not completely unrelated) career path. The moral of the story is that in the past, happenstance has often played a crucial role in the recruitment and training of insurance professionals who have dedicated their lives to the craft for several decades. But the same element of chance, it appears, is coming back to bite the insurance industry.

It is now common knowledge in the insurance industry that many in the Baby Boomer generation (those born between 1947 and 1964) are contemplating retirement. In addition, the number of executive positions is projected to increase 10-12% by 2012, roughly around the same time the Boomers will be retiring.

The issue here is obvious: Is there a “best and brightest” generation to whom the Boomer Generation can hand the reins over when the retirement milestone approaches?

In some (and perhaps too many) scenarios, the answer is apparently ‘No.’

One unhappy consequence of not having anyone sufficiently young and qualified to take on the management reins is that the senior management of a brokerage may be inclined to pursue more radical succession strategies. Given that brokerage multiples are stratospheric these days, for example, brokers may be inclined to sell off the business to some financial services entity that simply wants to make a buck and consequently shows a disregard or lack of understanding about what makes the industry tick.

For insurance companies, the hypothetical problem scenario is not being able to retain qualified employees. For example, as one industry leader observed, it’s hard to attract information technology specialists to a company that is using outmoded technology. The answer is to keep the insurance industry a contemporary and dynamic place to work. Easier said than done, perhaps, but nonetheless necessary.

If nothing else, the fear of not being able to replace good talent has led to a major youth recruitment push in the industry. This can be seen, for example, in the increase in number and popularity of youth broker associations throughout the country. If such youthful enthusiasm and loyalty for the industry can be sustained for a long period of time, as it was in generations previous, then the industry may not have this kind of dilemma in the future.

The key is for somebody to identify and articulate just what kept prior generations interested in the business. It is an old saw that loyalty to institutions these days is at a premium — especially for Generation Y employees (those born between 1975 and 1990). This truth makes it imperative for recruiters to find out what will sustain loyalty to the insurance industry going forward. If industry recruiters can find out — most likely through a targeted, nationwide study that is dedicated solely to the insurance field — what inspires devotion to the business of insurance, then it will be that much easier to “sell” the industry to would-be acolytes.

Of course, pumping up the number of rookies entering the industry will not help resolve how to transmit information from one generation to another. Mentorship programs would provide a forum for managers to train the younger generation in the finer points of keeping the industry running smoothly upon the succession of one manager by another. Insurers should also focus on bringing along their talent within an organization.

Recruitment should no longer be left to chance. There are too many other lucrative opportunities and areas of specialization available for fresh young talent to explore in today’s day and age. Today’s recruitment drive must be focused, positive, and be predicated on all of the good things the industry has to offer.