The number of insurers looking to increase staff is now at the highest level since July 2009, according to “The Mid-Year Insurance Labor Market Study,” produced by Jacobson Group, an insurance staffing company, and Ward Group, an insurance consultancy. The majority of insurers, 54.5 percent, intend to increase staff this year, compared to 51 percent in January; and the number expecting to increase revenue is 78.4 percent, up from 69 percent for the same period.
“The results of the labor study are indicative of a stabilizing landscape,” says Gregory Jacobson, CEO of The Jacobson Group. “It seems that insurers are putting uncertainty to rest while keeping hiring strategies on track.”
The reasons driving the need to increase staff are encouraging, 48 percent will staff up based on anticipated increases in volume, 43 percent in anticipation of expansion, 33 percent to improve services, 25 percent due to being understaffed.
However, for a variety of reasons, it is increasingly difficult for insurers to recruit IT talent, he add.
“Recruiting mid- and upper-level IT people is almost as difficult as it was five years ago,” Jacobson says. “It’s really dramatic just in the past 18 months. According to our scale, the difficulty of recruiting IT people has increased 16 percent,” Jacobson says.
The situation has been exacerbated by the hiring freezes from the 2008-2009 period, and an older workforce that is nearing retirement, leaving a gap in talent and knowledge; as a result succession planning is a re-emerging priority as companies plan for the future, with technology, underwritng, and sales and marketing positions most in demand.
“There has been a consistent increase in the need to hire technology staff since our study began in July of 2009. Even in an area like underwriting, where the increase in demand over the past 18 months has been more dramatic than that in IT, it hasn’t been as consistent as it has been in technology,” Jacobson says.
The insurance industry is faring much better than the general economy, Jacobson says. The overall unemployment rate in the industry is 4.6 percent compared to 8.3 percent in the general economy, and since February, insurance carrier employment has increased 0.5 percent. In property/casualty, the industry grew 0.83 percent compared with an anticipated rate of 1.29 percent, and the life/health industry grew 1.38 percent compared with an anticipated rate of 0.46 percent.
The number of insurers looking to maintain staff is essentially flat since at 30.7 percent since January. This time last year, the number of insurers looking to maintain their then-current size was 42.9 percent. Currently, 14.8 percent expect to decrease staff. Flat growth is expected by 18.8 percent of respondents and just 3.8 percent expect revenues to decrease.
Insurers are anticipating moderate but sustainable growth, as indicated by their staffing plans. The portion looking to increase staffing by 10-20 percent is 8 percent, compared to 4.5 percent in July 2011. The portion looking to staff up by 2-4 percent is 26.1 percent, compared to 15.8 percent this time last year. The growth has taken place across sectors and also across insurers of different sizes.
In terms of staff decreases, 14 percent attribute them to automation, compared with 31 percent in July 2009.
“Throughout the study, the number reason has always been ‘automation improvements require less staff.’ However, not nearly as many companies are saying that’s the driver,” Jacobson says. With one exception, automation has declined on each iteration of the survey. “The opportunities to reduce staff through automation are not what they used to be,” he adds.
Other reasons include claiming to be over staffed: 10 percent; 9 percent due to reorganization, and another 9 percent due to anticipated decreases in volume. From these stats, the presenters infer that most companies are not anticipating decreases in volume. Just 6 percent reported contraction or discontinuation of business or operations, compared with 11 percent in January 2011.
Extrapolating from their growth in the general economy, the presenters said the number of temporary employees in the insurance industry is increasing, accounting for 8,000 jobs, or 30 percent of the expansion in the insurance industry over the next 12 months. More companies, 17 percent expect to increase temporary staffing, compared to 14 percent six months ago.
The bi-annual survey is intended to analyze labor trends and staffing expectations, offer an overview of staffing challenges and comment on the labor market.
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