Millennials are replacing Baby Boomers as the insurance industry’s largest customer base. They’re investing in new businesses, buying new cars and homes, and starting families; while Baby Boomers are starting to think about retirement. Insurers that want to secure long-term growth need to build a solid Millennial customer base, yet this often proves to be challenging. Nonetheless, organisations that get this right and appeal to younger customers could inadvertently find they also become a more attractive employer as a result.
Analytics and advisory firm Gallup reported that Millennials are the generation that’s least likely to engage with insurers. When they do buy insurance, they’re twice as likely to do so online compared to previous generations – yet many insurers don’t currently have the IT infrastructure required to keep up with their digitally-led demands. Insurance firms recognise that they need to make changes to attract younger customers, but they often struggle to make progress quickly enough.
At the same time, insurers also need to attract more young people to work for them. The insurance industry is often not an immediate choice of industry for younger age groups, or seen at the forefront of innovation. But in the US, 25% of insurance professionals are expected to retire in the next three years, and there’s a significant talent shortage here in the UK too. According to insurance firm Ecclesiastical, 80% of insurers want to attract younger talent, but 52% find it a challenge to recruit those aged 30 and younger. A lack of experience, skills or qualifications are the main causes behind this issue, alongside a shortage of young applicants.
Misconceptions of Insurance Careers
Millennials can deliver many benefits to the insurance sector. Alongside helping with succession planning, they provide fresh perspectives, diversity of thought, and new ideas. Since this is a generation that has grown up with technology, they fully appreciate changing customer expectations (and often possess the same views) and have the digital-first mindset that will help their employer to adapt.
The industry struggles with several misconceptions which hinders its ability to attract workers from this generation. Many people associate insurance with underwriting – and if this job doesn’t appeal, they discount the industry entirely. There’s a lack of understanding of the full range of opportunities and career paths that the industry can offer. What’s more, rightly or wrongly, insurance is often viewed as having a slightly stuffy, formal working environment. This doesn’t positively compare to other more modern, technology-led workplaces.
Insurers need to be more proactive in managing their employer brand. They also need to embrace new employment models and more flexible ways of working, since nearly half of workers worldwide would prefer something other than a full-time job. Educating young people at school and college would help to address the misconceptions that exist too, but this will take longer to reap rewards.
Impact of Negative Hiring Experiences on Buying Behaviour
Insurers want to attract Millennials to both buy their services and work for them. And there’s an important link between these two priorities.
Individuals who have a poor experience during the hiring process are unlikely to want to engage with that company as a customer. In fact, more than half of workers say a negative hiring experience makes them less likely to buy a company’s products or services in the future. And there’s a ripple effect too. 50% of workers say the negative hiring experience of a friend would make them less likely to buy that company’s products or services.
Insurers may initially dismiss this as simply being disgruntled, rejected candidates spreading sour grapes, but this isn’t the case. Rejection after interview ranks seventh on a list of negative experiences that impact purchase intent. Number one is a lack of transparency on salary or job description; second is a lack of response after submitting a job application; and third is a slow response to an application.
Insurance firms that have a poor hiring experience will not only hinder their efforts to attract young talent, but they’ll also hamper attempts to attract new young customers, too. Moreover, what works for young people works for all. The impact of negative hiring experiences is felt as strongly by Baby Boomers as is by Millennials.
Strengthening The Employer (And Consumer) Brand
It’s important that insurance firms take steps to strengthen their employer brand, since this will also positively impact on their ability to attract new customers. Businesses should look for ways to quantify and track employer brand’s impact on sales, and vice versa, and use this to demonstrate that HR solutions can solve broader business problems, not just talent problems. This can help to form a case for greater investment in activities that will enhance your employer brand.
Finally, be transparent. Process efficiencies can improve the hiring experience and reduce negative impact on sales, but it’s still no substitute for cultivating strong relationships with prospective employees. Transparency is critical for candidates in terms of salary, job description, opportunities for advancement and regular interactions with the organisation.
Learn more about how we can help you to enhance your employer brand – visit Recruitment Process Outsourcing.
This article is an extract from our guide The Future of Insurance Recruitment. To download the full guide, please click on the link below.