Quick look: The same hiring challenges SMBs are facing, the insurance market is experiencing as well. Despite the heightened awareness, there’s actually a silver lining for PEO brokers ready to differentiate themselves in the industry. As the workforce tries to course correct, there are ways people in their current positions can come out stronger on the other side.
Talent shortages continue to affect companies across all industries including brokerage firms and insurance agencies. The U.S. Chamber of Commerce reports if every unemployed person in the U.S. found a job, there would still be over five million open jobs available.
So, the question is: where’s all the people?
There’s been a perfect culmination of events which have led many companies scrambling to find qualified professionals to fulfill their roles. A generational workforce shift and voluntary resignations heavily contribute to the talent struggles many brokerages and agencies face. Lack of engagement and limited space to grow also hinders many from considering these types of roles as their next career path.
How then is the insurance market navigating this talent shortage and where does a professional employer organization (PEO) come into play? Changes in the workplace and partnerships with PEOs have sparked new ways to approach the traditional broker description. A surge of innovative strategies and advanced technologies have streamlined standard processes and freed up time to get more creative when serving client needs.
These changes speak directly to millennial and Gen Z employees who want remote-friendly, tech-savvy, purposeful interactions in all facets of life, including work. Though the talent shortage continues to be challenging, PEO brokers can exceed expectations and stand out in their industry by applying innovative ways to adapt.
Why it’s tough to fill broker roles
At the end of 2022, statistics showed the unemployment rate among insurance carriers was at 3.5%, exceeding the national average of 3.4%. As with other industries, there’s been ongoing problems with recruitment and retention, particularly due to the fact the insurance industry has been historically dominated by the older generation.
Retirement from long-established roles
Employees within the insurance industry trend older. The average age of brokers is 45, which means the core demographic is heading for retirement within the next 15 years. Plus, many have maintained the same role and/or the company for the duration of the career. Now, it’s more common for workers to job-hop even after one or two years, leaving businesses looking for ways to retain them.
With the millennial and Gen Z generations making up the majority of the workforce, brokerages face competition with other industries also dealing with their own talent shortages. And those who do seek employment opportunities aren’t necessarily looking for jobs in insurance. Most are focused on careers in tech, business, and healthcare instead, which means there aren’t enough people to replace the ones getting ready to retire.
Disinterest from younger employees
Life and health insurance brokers must complete certifications which requires pre-licensing education and sitting for state exams where the person wants to be licensed. With younger generations already uninterested in the profession, there’s little motivation to complete the path to become a licensed broker.
In the current employee-driven market, it’s up to companies to provide incentives when recruiting. This may include hiring bonuses, professional development opportunities, or tuition reimbursements. Becoming a broker can provide a lucrative career path, but those unfamiliar with the industry may need a reminder of the benefits.
Burnout leading to voluntary resignations
When there’s a decline in talent, it typically means others must pick up the slack to fill the productivity gap. Professionally, PEO brokers are being called upon now more than ever. Clients want solutions on saving money and supporting business growth despite workforce setbacks. The demand can become taxing, especially when there’s no respite from the increased workload.
Whereas, personally, constant news and social media updates can easily make people feel overwhelmed. Balancing all the areas vying for attention can feel like sensory overload to a point where people become fatigued. Rather than slow down and recalibrate in their current roles, recent years have shown people are more likely to quit.
Addressing the talent shortage head on
The insurance industry is not immune to workplace trends regarding what’s needed to recruit and retain the best talent. Companies must adjust to modern demands if they want to attract qualified employees, and it starts with (re)establishing a strong foundation.
Clarify the purpose
Gen Z employees are enticed by jobs where they can enact meaningful change. At the core, being a broker requires a desire to help others. Reframing the insurance role to focus on how it empowers clients and builds strong relationships can help tap into the purpose younger generations seek.
Offer work flexibility
Today’s workers also want flexible, remote work environments, which are slowly starting to replace the standard 9-to-5 workday. While many brokers are happy with a hybrid medium, those wanting to recruit from a younger pool of talent need to prioritize these values.
Present partnership opportunities
A PEO partnership is one of the not-so-secret solutions many brokers are considering to adapt to the changing landscape. PEO brokers are able to differentiate themselves from the competition by adding another layer of knowledge, expertise, and experience to their portfolio. It provides another avenue of business growth and helps to solidify client relationships they’ve worked so hard to build.
Helping PEO brokers improve the client experience
The reality is businesses rely on their broker relationships for fresh ways to fulfill their own recruitment and retention struggles. And as PEO brokers know, working together to deliver clients the best possible experience helps them retain and grow their own businesses as well.
At ExtensisHR, our PEO solution supports brokers by offering comprehensive, cost-effective services for HR, payroll, premium employee benefits, and risk management. It allows them a way to provide clients the HR resources and technology they need to scale effectively. And, in turn, brokers are presented with new ways to show up in their current roles.
Learn how working with our team of HR experts can help grow your portfolio.