Solving the P&C insurance talent crisis with new strategies

The U.S. insurance sector is projected to lose around 400,000 workers by 2026, and 50% of current insurance personnel are expected to retire within the next 15 years. Turnover has already climbed from its historical range of 8% to 9% into the 12% to 15% range, and recruiting has grown harder alongside it.

The demographics behind those numbers: 538,000 insurance employees are 55 to 64 and another 186,000 are 65 or older. Only 4% of millennials express interest in insurance careers, which leaves a pipeline problem traditional recruitment cannot close.

Some agencies are already ahead of this. While others run hiring practices built for a different labor market, a set of firms have rebuilt how they attract people and are filling roles their competitors cannot. They are not weathering the shortage. They adapted to it.

This two-part series covers the acquisition and retention strategies those agencies use. Part 1 is about attracting people in a competitive market. Part 2 is about keeping them.

The P&C insurance industry is facing several talent pressures at once. According to RSM's industry analysis, the median age of the insurance workforce is 44, against a national average of 42, and only 25% of the insurance workforce is under 35. That gap is an operational risk, not a demographic footnote.

The labor market data shows the scale of it:

• Unemployment: 1.5% to 2.9% in insurance, against a national average of 3.6% to 4.2%
• Screening: 39% of agencies describe screening qualified candidates as "extremely challenging"
• Hiring plans: 52% of insurance carriers plan to increase staff in the next 12 months, intensifying competition for limited talent
• Job openings: down 32%, from 445,000 in December 2022 to 303,000 in December 2023, which indicates available talent is being absorbed quickly

Every unfilled position costs money. Replacing an employee runs $15,000 to $50,000 depending on the level of the role, and the indirect costs run deeper.

When a position stays open, the existing team absorbs the work. Burnout follows. Productivity drops, response times stretch, and relationship management suffers. Growth plans get postponed because no one has the bandwidth to pursue them.

Wage pressure adds to the problem. P&C sector wage growth hit 8.0% year over year as of March 2024, outpacing many other industries. Competitive compensation is necessary. On its own, it is not enough.

P&C insurance faces hurdles that do not exist in other industries. According to industry research, younger candidates see the industry as outdated, dull or behind on technology. Agencies are competing for talent and correcting an impression at the same time.

The skills gap compounds the problem. As the work becomes more digital, agencies need people who understand insurance fundamentals and the technology that now carries them. Finding candidates with both, or with the aptitude to build both, takes a sharper approach to hiring than most agencies use today.

Aon's apprenticeship program has become the industry's reference point. It launched in 2017 with 26 students. Aon has since created more than 1,000 apprenticeship positions in Chicago alone, backed by a $30 million investment to take the program nationwide. More than 90% of apprentices convert to full-time employment, with retention rates significantly higher than traditional hires. Three things make it work:

• The partnership model: Aon partnered with Harper College on a two-year program where students earn while they learn. Apprentices receive full salary, benefits and tuition coverage while gaining hands-on experience in real client situations.
• Zero debt: Apprenticeship graduates start their careers debt-free and with proven experience. That builds early loyalty and removes the financial pressure that often drives job-hopping.
• Practical implementation for smaller agencies: You do not need Aon's resources to apply the concept. Local community colleges and trade schools can host a smaller version. Even a three- to six-month program pairing part-time work with insurance education yields meaningful results.

Partnerships reach further than apprenticeships. Agencies are embedding themselves in educational institutions at several levels to build pipelines that renew themselves.

• Community college partnerships: The highest return for most agencies. Community colleges often run business programs that can absorb insurance coursework. Students get real-world experience, and you get access to motivated learners who appreciate the opportunity.
• University collaborations: More investment, larger payoff. MJ Insurance created a student-run captive insurance company, giving students hands-on experience and giving the agency a direct pipeline of engaged, knowledgeable candidates.
• High school career programs: Career day presentations, internships and educational seminars plant seeds that bear fruit years later, when those students enter the job market.

The P&C insurance agencies winning the talent war have rebuilt their recruitment technology. Traditional job boards return less every year. Specialized platforms and AI-powered tools return more.

• Specialized insurance platforms: iHire Insurance and the insurance-focused sections of major job boards reach candidates already looking for insurance work. These platforms often deliver conversion rates four times higher than general job boards because the audience is targeted.
• AI-powered screening: Modern applicant tracking systems (ATS) with AI capabilities screen resumes for specific insurance experience, identify transferable skills from other industries and predict candidate success from a range of data points. Time-to-hire drops and hiring quality improves.
• Video interviewing platforms: Especially useful for reaching younger candidates. These tools ease scheduling and can carry skills assessments built for insurance roles.

Social recruiting is now essential, and most P&C insurance agencies are doing it wrong. It takes a strategic approach, not a feed of job postings.

• LinkedIn: LinkedIn shows 71% higher conversion rates as part of a multi-channel approach. Publish content that shows your agency's culture, share employee success stories and engage with candidates' content before you approach them about a role.
• Facebook: Often overlooked for professional recruiting, Facebook is the best platform for B2B lead generation, including talent acquisition. Its detailed targeting reaches professionals by specific experience or interest.
• Content marketing: Publish work that shows what your agency knows and what it is like to work there. Blog posts, video and social content reach passive candidates who were not job searching.
• Employee advocacy: Your current employees are your best recruiters. A referral program produces high-quality candidates at lower recruitment cost. The programs that work offer meaningful incentives and make sharing easy.

Lockton Companies has held the No. 1 large employer spot in Best Places to Work for multiple consecutive years, on the strength of decisions made years earlier. Its approach shows what large agencies can do with the resources they already have.

• The talent and culture group: Launched in 2020 as a strategic HR advisor, the group works specifically on making Lockton an employer of choice. Its initiatives include 78% offering work-life flexibility and 76% offering telecommuting options, figures that stood out when they were introduced and are now expected.
• Results: Lockton's employer branding and work options let it recruit through the tightest labor market in recent history. Recognition as a top employer creates a cycle where talented professionals come looking.

Captive Resources LLC has been named the No. 1 medium employer in Best Places to Work for three consecutive years. Mid-size agencies can compete for talent on culture and benefits.

• Benefits strategy: Captive Resources offers work options employees can shape around their lives and a comprehensive benefits package built for a multi-generational workforce. Its approach reaches past compensation into genuine workplace satisfaction.
• Employee-centric culture: The company's consistent recognition comes from an environment where employees feel valued and trusted. High employee satisfaction across every measured category shows those talent strategies translate into workplace engagement.
• Competitive advantage: Three straight years of recognition builds an employer brand that draws candidates who look for award-winning workplaces, including people who would not otherwise consider a mid-size agency.

Liberty Mutual shows what compensation design and development spending do for recruiting in a competitive market.

• Performance-based compensation: Liberty Mutual's compensation strategy includes $1,500 average household commission for top performers plus cash incentives for exceeding targets, a proposition that attracts high performers from other industries.
• Professional development investment: The company invested $7.3 million in tuition reimbursement for more than 1,000 employees, a tangible commitment to growth that registers with career-focused candidates.
• Measurable recruitment impact: These strategies let Liberty Mutual keep hiring through the industry's most challenging period. A reputation for investing in people became the differentiator.

The P&C insurance agencies succeeding in this market share three traits. They have moved past traditional recruitment methods, invested in current technology and processes, and built employer brands that candidates believe.

Acquisition is half the work. Part 2 of this series covers retention: how agencies build environments people choose to stay in. It covers the professional development programs that keep employees engaged, the culture work that produces real workplace satisfaction, and the benefits packages built for a multi-generational workforce.

The talent crisis is real. It is not insurmountable. The agencies that change their approach and invest in their people will come out of this period stronger than they went in.

Your competitors are already making these investments. Your current team is already evaluating its options against them. Given the cost of turnover, lost productivity and missed growth, incremental change will not close the gap.