Right now, Australian insurance firms continue to grapple with a significant and growing talent shortage. It’s a problem that, instead of easing as many once expected, seems to be growing worse with each passing month. According to a recent survey, as many as 92% of insurance firms report that a shrinking talent pool is already hindering growth.
Unfortunately, the typical solution for such issues—educational initiatives—are years away from having a meaningful positive impact. That means insurers are going to have to do some rethinking of how they approach talent acquisition. By striking the right balance between retention, retraining, and recruitment, it should be possible for the industry to ride out the shortage until it eases. Here are the changes they should consider making in each area.
New Approaches to Retention
For decades, the two most effective ways insurers could reduce employee turnover were by increasing salaries and benefits. However, those are both approaches that offer diminishing returns. After all, there’s only so high the average company can raise salaries before it starts harming its bottom line. Similarly, there are only so many traditional benefits a firm can conceivably offer. And by now, there’s little daylight between the compensation packages offered by most firms in the industry.
To set themselves apart, insurance firms need to move away from compensation-heavy retention schemes. Instead, they need to start leaning into some other retention strategies, specifically by giving workers what they repeatedly express a desire for. Number one on that list is embracing policies aimed at creating a positive work environment. According to a Deloitte survey, 67% of millennial and Gen-Z workers prioritize that over all else.
Beyond that, insurers should offer flexible work scheduling, including remote and hybrid work wherever possible. In post-pandemic Australia, that’s the top-requested job perk, with some 47% of workers listing it as a key reason to accept and keep a job. Defined and reasonable work hours are almost as popular, with 34% of workers listing it as an attractive aspect of any job.
Strategic Retraining Efforts
While reducing turnover is essential to lowering talent acquisition needs, it isn’t a solution in and of itself. Insurers still must find qualified candidates for open positions that require skills that aren’t available in-house. However, aside from urgent needs, it’s generally best for firms to meet their skills needs through strategic retraining programs. Reskilling employees already on the payroll is a cost-effective and far more reliable talent acquisition strategy than hiring alone.
One of the best ways to make retraining a viable option in a fast-paced industry like insurance is to use an AI-powered employee development solution. The offerings from companies like Workera and Eightfold make an excellent starting point. Both help businesses analyse and track in-house skills to facilitate employee development programs. For one thing, they can autonomously suggest which employees are best suited for retraining to meet specific new skill needs. They can even forecast likely skill shortages that a business hasn’t yet encountered.
Best of all, retraining programs can serve as a valuable type of employee retention program. Younger workers now value skill development opportunities even more than the potential for job advancement. Some are even skipping higher education opportunities, believing they’ll build a more robust skillset in the workforce. Businesses can easily take advantage of that with retraining programs, and may even be able to lower employee overhead in the process.
Broaden Recruiting Efforts
Finally, Australian insurers need to realise that there’s no realistic way to train their way out of certain skill shortages. That’s why, for their most urgent talent needs, they should partner with specialised recruiting firms. Doing so can reduce the strain on internal HR employees and reduce overall talent acquisition costs. However, it’s wise to start considering expanding recruiting efforts into overseas markets.
When looking for viable sources of overseas talent, it’s best to begin with places like the UK and the US. That can minimise cultural and language barriers, and reduce some visa hurdles, too. Plus, both countries have insurance markets that all but mirror our domestic one. In the UK, firms like Gravitas Recruitment Group even have insurance industry specialists who understand the challenges of the local labour market. There is also no shortage of insurance industry recruiters available to partner with in the US.
If pursuing an overseas recruitment strategy, however, Australian firms need to acquaint themselves with the Short-Term Temporary Skill Shortage Visa programme. It lists specific industry positions that employers may fill with workers from overseas. As the insurance industry is undergoing a severe labour shortage, it’s typically possible to sponsor visas for most in-demand positions. However, the programme does impose some additional costs, and processing times may make some advance planning critical.
Long-Term Labour Strategies
The bottom line is that there is no single solution that will ease the current insurance industry skill shortage in Australia anytime soon. So, aside from the strategy shifts detailed above, insurers should also give some thought to their future labour strategy plans. In doing so, they should devote significant resources to exploring automation and AI-powered solutions. That may be the only viable way to address what’s fast-becoming a permanent restraint on insurers’
ability to operate and grow. However, as the tech industry now faces similar domestic labour shortages, there’s no tech-powered panacea available either. So, for now, insurers must still adopt and pursue an all-of-the-above strategy, in the hope that they can keep ahead in the nationwide competition for skilled workers.
