Today's high national unemployment rate is misleading and irrelevant. The insurance industry is being drained of talent and experience—a trend that's going to impact the industry and its customers for years to come—and could soon be short-staffed.
The baby boomer generation has just entered its long-awaited retirement phase. This sustained trend will last decades:
* About 10,000 baby boomers (born 1946-65) are now retiring every day in the United States, according to federal census data.
* Half of today's insurance industry workforce will retire during the next 10 years, forecasts National Alliance Research Academy research.
* The quickest-growing segment of the insurance workforce is employees older than age 60.
Boomer departures will change the industry workforce, for good. Can the insurance industry slow down the brain drain, or even plug it?
For decades, the industry has tried to prepare for the baby-boom retirement wave by recruiting young, inexperienced workers. That's a noble and important effort, but it's simply not enough. Even when fresh talent can be found and hired (if it can be lured away from other industries with more appeal to younger generations), there are not enough recruits to go around. Inexperienced workers-even if they bring new, up-to-date technology and social networking skills-need training and seasoning to reach a level of knowledge comparable to their predecessors. And with boomer retirements, the industry is losing its institutional knowledge.
A Solution
Insurers are dealing with an extended soft market in commercial lines pricing, which trickles down to affect the entire industry value chain. Hiring is expensive: Employers face the significant costs of recruiting, office space, salary/benefits, technology and training when they want to add an employee. But there is a new, under-appreciated answer to the insurance brain drain: Using retirees to fill staffing needs.
That paradox is possible because today's retirees (and future retirees) want to keep working. But they want to do so in a more flexible, independent fashion. Insurance employers need to get up to speed and respond to this society-wide trend, dubbed "phased retirement." Today's retiring workers want to work from home remotely, by tapping into technology to gain virtual access and contribute.
The industry that relied on programmers on the other side of the world to deal with the threat of Y2K can surely deal with remote workers who log on from another county or another state. In fact, technology workers will be part of the brain drain, but they also are among the most flexible and most savvy in working virtually.
Phased retirement wasn't available a generation ago or even a decade ago. It's still evolving, but it generally means that employees over a period of years step down from-but don't jump out of-the workforce. Workers today close to age 65 are starting to view retirement not as a final destination, but as a milestone to be passed on the way to a rebalanced life.
Americans increasingly will view their 65th birthday as a time to restructure toward a life with less stress, more time at home with family, less time at the office, and perhaps more travel and community involvement. They also know what's good for them, and medical research shows it: Those who keep their minds active tend to live longer and enjoy better health.
The "retire at age 65" tradition was established at a time when Americans expected to die not long after retiring. That was before advances in wellness and health care boosted longevity.
Financial needs also play a part in retirees' desire to keep working. While 401(k) and individual retirement account balances have returned from the depths of the 2008 economic crash, Americans are "once bitten and twice shy" about relying solely on the stock market for generating income. Social Security typically is not sufficient enough to last for a retirement of 20-plus years. So retirees still want to earn a paycheck.
Once insurance employers understand that workers want to make a gradual, long-term exit from the workforce, they can use that trend to their advantage. But it'll take change. In my observation, employers need to expand from the typical, decades-old employment model: Workers need to show up, be seen, and interact in person in order to be viewed as contributors.
Since insurance industry employers need skilled people, and retired/retiring workers want to keep active professionally, we've got a match.
Sharon Emek, Ph.D., is president and CEO of Work At Home Vintage Employees LLC (WAHVE), a staffing company that works exclusively with insurance firms.
