If you look around your office, one thing becomes abundantly clear-the face of the workforce is changing.
Many of the leaders who have shaped the business landscape have, or are preparing to, retire and a new generation is now entering the workplace.
This newest workforce group, the so-called Generation Y cohort born between 1982 and 1993, has a very different set of values, ideals, experiences and expectations than those that have come before.
For an organisation to be successful in the future, it will need to engage these young people in order to meet their human resource needs.
While attracting and retaining this group is important for any organisation, it is especially vital for those in the insurance field, since that industry is facing a combination of factors that could lead to critical shortages of key talent in the near future.
There are two components leading to this potential serious shortfall of workers.
The first is the aging workforce now in key roles in the insurance industry-for example, a recent study indicated 88 per cent of Chartered Property Casualty Underwriter members were older than 40, as were 70 per cent of adjusters. As well, over 60 per cent of life insurance sales agents are over 45.
Compounding these aging demographics is the fact that the industry is seemingly having difficulty attracting replacements – fewer than 23,000 people sat for their CPCU exams in 2006, a more than 55 per cent decrease from 1992.
This trend will likely only be amplified by the increasing overlap in expertise between insurers, banks, and investment management firms, which leaves potential employees with much greater options than they enjoyed previously.
Add to the mix the negative opinion some have of the insurance industry – due to high profile scandals and a lingering perception of an industry that is rigid and slow-paced – and the changing competencies demanded of employees in the sector, and there is certainly the potential for a critical shortage of quality employees in the not-too-distant future.
To counteract these factors – and to differentiate your firm as an employer and gain a competitive advantage – it is imperative that leaders across the industry develop an understanding of Generation Y.
Proactive steps must be undertaken to understand the unique values of this group, which can be very different than those of the existing workplace generations, and then to formulate strategies to engage them and sustain their interest.
A 2004 study by Deloitte Consulting LLP and the Institute of the Future unearthed six core workplace values held by Generation Y.
Interestingly, they appear to be more loyal than Gen Xers, valuing long-term career development and multiple experiences within a single organisation.
This group craves a sense of purpose and meaning in their work, and values social responsibility.
Those in Gen Y also desire access to mentors and other champions in the organisation to facilitate their learning.
They want to work in a tech-savvy environment, as they have grown up with technology and take it for granted. Open social networks that embrace open and honest communication are important to them, and they want all of this in an employer that offers a work/life balance.
That’s certainly a tall order, but one that an employer can meet by consistently incorporating four workplace ideals, which underlie those six core values: flexibility, balance, respect, and accessibility.
The organisation’s leaders must establish the infrastructure for ongoing cultural change to meet these ideals.
As the competition for talent intensifies, companies must focus on ways to engage their key people and attract new ones, especially those in Gen Y. You can do this by utilising what we’ll call the ‘Develop-Deploy-Connect’ model: develop people by providing the real-life learning opportunities employees need to master a job; deploy key individuals by working with them to identify their deep-rooted skills, interests and knowledge, and then use that information to find the best fit in the company and craft the job design and conditions that will help them perform; and connect them by providing the tools and guidance they need to both build networks to enhance performance and improve the quality of their interactions with others. By focusing on these three key elements, organisations will establish capability, commitment, and alignment in key workforce segments, which in turn improve business performance.
How might this concept actually play out in the real-world?
Well, development of employee’s skills could mean replacing traditional in the classroom learning opportunities with new methods better-suited to the needs of today’s professionals, such as on-the-job training and formal or informal mentoring relationships.
Deployment strategies could involve replacing one-size-fits-all employment models with more flexible programs that better meet the Gen Y value of work/life balance, such as part-time arrangements or contract work.
Making newly-hired key employees feel connected could be as simple as creating opportunities for insurance professionals dealing with similar issues to network and learn from one another, or creating knowledge management and mentoring programs to enable more seasoned practitioners to share their knowledge with this new group of employees.
Even after you make these types of systemic changes, you need to ensure that current and potential employees are aware of them in order to positively impact the reputation you have as an employer. Your employer brand must reflect your commitment to develop, deploy and connect your workforce.
A word of caution – branding can’t be done simply by communicating a set of ideals, particularly for the cynical Gen Y group that has been bombarded by advertising messages all their lives.
The real substance of your reputation as an employer comes from the actual practices that make up an organisation.
Specifically, your corporate expertise (the products and services you offer), style (workplace culture), and positioning (points of differentiation from competitors) will impact the way you are perceived as an employer. Remember that employer branding is a long-term undertaking – employer reputation, like its corporate counterpart, takes years to build.
By implementing these ideas, particularly in respect to connecting with Generation Y, those in the insurance industry – and, indeed, all organisations – can beat the looming talent crisis.
Ultimately, an effective talent management programme will increase the performance of both individuals and the broader organisation-certainly a worthy reward for the effort involved in making these changes.
In Focus is written by Deloitte to address topical business issues and appears in the Caymanian Compass business section on Wednesdays.