Educating Millennials #1 - As an Industry, How Are We Training and Attracting Millennials as Employees?
Over the last decade, hiring trends in insurance have caused an impending "brain drain" and, with 59 being the average age of an insurance agency employee , there is now a huge focus on getting talented young people into the industry.1 One startling change, for most of us that fell into insurance, is that there is now an increasing trend for college hires to be graduates with specific insurance training from the 112 Accredited Risk Management Schools now offering a variety of courses.2 Millennials are set to be 75% of the world workforce by 20253 and The Institutes, a non-profit risk management and property-casualty insurance education provider, predicts they will hold 400,000 industry positions by 2020.4 It is also predicted that they will job hop much more than predecessor generations, with the estimated cost to replace a millennial worker at $15,000 to $25,000.5 The companies that understand this shift in the educational make-up of the insurance workforce, and tailor their own training programs accordingly, will attract and retain the best talent in the industry.
With all this in mind, I reached out to two influential voices in the insurance education sector to get their take: Michael Angelina, Executive Director of the Academy of Risk Management and Insurance at St. Joseph's University, and Randall Jones, NAPSLO Education Director.
The Educators' Role
Q. What could the insurance industry do better to attract and retain the best talent in your opinion? And what do you think about the research suggesting millennials will be difficult to retain as employees?
Michael: "For the insurance industry to better attract and retain the best talent requires three things: positive brand recognition, job satisfaction and career advancement potential. To attract the best talent from the university pool, the industry needs to be seen as providing more than just a place to earn a paycheck. Having spent 30 years in the insurance business, I see the business as a dynamic industry, filled with talented people and an opportunity for professional growth. To succeed, employees need two sets of skills - leadership/executive skills and trade skills. We are constantly being told the industry is changing and that graduates need to think innovatively and be adaptable. Therefore, for future students to be equipped with the right skills sets, the industry needs to be involved via frank feedback and hands-on engagement with university programs, such as Board involvement, advice on curriculum, executive speakers, or internship opportunities. By providing internship opportunities, insurers will have an opportunity to attract talent early. On your second question, I believe the issue is ultimately engagement and growth opportunities. The companies that succeed in identifying and developing the next generation will have an advantage in retaining the best and therefore attracting the best talent. The issue isn’t millennial characteristics but companies keeping this new generation engaged."
Q. What, in your opinion, are the areas that Risk Management Schools need to coordinate with companies' training programs in order to best prepare students?
Michael: "There are two types of training - industry-specific technical knowledge and business soft skills such as management skills, marketing and sales knowledge, leadership and development and so on. The current issue is a talent issue - the industry needs to focus on current and future employees. As such, having clear succession plans and development tracks will be key. Companies need to address their internal challenges, such as distribution, technology and predicative analytics, and provide their employees with the best set of tools to maximize their capabilities.
Schools such as St. Joseph’s can certainly offer executive education programs to address the latter, such as our "Energy School," "Insurance Boot Camp" and "Executive Leadership," but for discretionary company technical skills and company-specific marketing there can be no replacement for companies' own training programs. University programs could do a better job in understanding the needs of the industry with regard to entry level positions: what skills are required, what level of insurance knowledge is desired, and what we need to do better to help our students succeed. This is candid feedback and very beneficial for our students."
The Role of the Industry
Property/Casualty companies across the spectrum generally have their own in-house training programs for new hires as well as continued professional development programs supplemented by trade associations; for example, The Institutes with MyPath. Addressing millennials' expectations of more training, I spoke to Randy Jones on what NAPSLO is up to…
Q. Have you noticed any trends or significant gaps on the employer training program side, in terms of what they are offering? How have insurance programs in general evolved, in your opinion?
Randall: "In the last five to seven years the emphasis has shifted hugely back to training and development. At NAPSLO we have identified a career continuum as a reference to build training over the progression of a career based on what our members need. Over the past few years. the delivery systems for education have drastically changed from several annual on-site schools to having much more involvement with courses through the year. We have found online training tools offer candidates much more flexibility and are effective when used in combination with on-site schools. Employer training programs now have new employees who already hold RM [Risk Management] degrees but there is still a need to focus on communication and the legal framework within which employees work. A gap exists between trade association training and company training in that NAPSLO - although we are very topical - cannot integrate into our training as quick a turnaround on emerging issues as a specific company. Therefore, companies need the involvement of claims and underwriting to train their employees on emerging coverage and claims trends."
Q. What do you think the future trends will be for training and educational development?
Randall: "There is a huge demand by our members for selling skills programs tailored to our industry niche. We are doing five to seven a year with 20 people per class. While many big firms can do in-house programs, we can offer customized training in this area for all sizes of our member firms. Trade associations such as NAPSLO will offer courses in the future, which will complement company-specific training that may take precedent within that firm. There will also be an increasing trend of demand for management training as millennials advance in our industry and older industry employees phase out.
Ultimately, the best candidate will always be the one with the best skills set, and not necessarily the best technical knowledge going into our industry (actuaries aside). So companies will need to continue to focus on technical training through hands-on experiential learning. Senior management will need to buy in to the concept of strong and tailored training that takes into consideration how younger employees choose to learn. While RM Schools make training easier as the average entrant will have a more in-depth knowledge of insurance, RM Schools add to but will not supplant a good hiring and training program. The instructional design of training will evolve to more immersion in networking and senior management interaction that go beyond traditional lecturing - all to produce a collaborative learning environment."
My 4 Takeaways:
- Graduates are attending Risk Management schools in unprecedented and growing numbers. By pursuing a career after four years of studying, as one Gen Re intern put it, they expect to "hit the ground running," e.g., in recognition of prior training. Going forward, therefore, collaboration between schools and insurance companies will be key.
- With a highly motivated workforce that is insurance-ready, companies need to communicate training availability and manage expectations on career paths once an employee is there.
- However, insurance literate graduates are not a replacement for company-specific training programs, and indeed I would urge that companies do not overlook graduates from other backgrounds. Technical skills can be taught but often soft skills are harder to learn.
- Millennials expect career progression, development and continued education; therefore, firms should look to:
- Formalize and promote training programs
- Set training and progression expectations clearly and early
- Have managers ready to engage this new generation; millennials want constant feedback but also trust so they can work independently
- Utilize internal and external mentors, teamwork and access to more training as part of industry groups
- And why all this effort? In our current market environment, less turnover and more effective staff will be able to deal with the challenges facing the industry for decades to come.
- CIO "Why Managers Need to Stop Worrying and Love Millennials" blog article, 10/10/13, http://www.cio.com/article/2381827/leadership-management/why-managers-need-to-stop-worrying-and-love-millennials.html.
- IBAmag Next Gen article, July/August 2014.