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Despite higher wages, insurance industry hiring remains a challenge

Jacobson Group
Insurance industry vacancies continued to rise in 2022 despite increased industry efforts to hire and retain employees.

Insurance industry employment rose 1.83% last year, slightly under the projected number, but could have risen a lot more. The insurance sector is still not back to pre-pandemic employment levels.

At the end of the year, there were about 386,000 open jobs. That's according to an industry study done by Ward Benchmarking and the Jacobson Group, firms that provide analysis on employment and compensation trends and do recruiting and placement.

"Carriers have had a difficult time keeping up with the turnover, primarily as it relates to retirements. And then we also (are) seeing more and more employees going to alternative employers," said Jacobson Group CEO Greg Jacobson.

That's in spite of rising wages. Jacobson said average industry merit pay increases rose about 4% last year. The federal Bureau of Labor Statistics said overall insurance sector pay hikes were about 6%. Jacobson said the difference in those two numbers is because people tend to get larger increases when they hop to a different company.

Insurance sector turnover last year was 14.7%, though the pace of turnover slowed in the second half of the year as economic uncertainty rose. Most of that turnover is voluntary.

The quarterly study of several hundred thousand workers and most insurance carriers showed near record highs in the percentage of companies expecting to hire this year. About two-thirds of all carriers said they want to add jobs. Fewer insurance carriers expect to stand pat than in previous editions of the research. The study noted a sharp increase in the number of companies expecting to reduce workers.

Jeff Rieder of Ward Benchmarking said economic volatility means hiring will vary by the type of insurance company.

Jacobson Group and Ward Benchmarking

"Commercial lines organizations and specialty organizations in particular are expected to see continued growth whereas many of the personal lines companies are getting hit harder with not only the increase in inflation and supply chain issues, but with many states not allowing adequate rate increases to offset that," said Rieder.

The pandemic is still causing strain for life and health companies, Rieder said, though life and annuity sellers said they hope they are near the end of COVID increased mortality rates.

The study showed the ability to hire talent is getting easier, though it's still a challenge — so much so that potential workers have a lot of say in whether they work from home. Rieder said the number one question workers at all levels of position ask talent scouts or a new company is about work-from-home or hybrid-work policies.

Rieder said it's a push pull with insurance companies.

"I think that's where companies are struggling. How can you build that culture if employees are not actually there to be a part of it," he said.

The study found just 4% of insurance companies expect workers to be in the office full time. Another 4% said they're completely virtual, while 72% said they require workers to show up in the office at least one day a week. The number of days per week in the office, Rieder said, is often a joint negotiation between insurance sector workers and their direct managers.

The study also found that 72% of companies expect to grow revenue in the next 12 months, in spite of a potential recession. How they expect to get those increases varies by the size of the company. Large companies, such as Bloomington-based State Farm, tended to rely mostly on projections of increased market share. Smaller and regional companies tended to say they expected more of the rise in revenue to come through higher pricing.

Since July, overall expectations to add staff decreased by a point.

A quarter of companies felt the ability to hire talent has become more difficult compared to the prior year. That's down from 48% in July; 24% feel it has become less difficult to hire people. Larger companies, such as State Farm, reported more difficulty finding talent than smaller companies did.

WGLT Senior Reporter Charlie Schlenker has spent more than three award-winning decades in radio. He lives in Normal with his family.