Let’s declare it: The insurance workplace has been upended, changed forever, and there is no going back. How and where we work now, and with whom, is our new reality.

That is a strong statement for the insurance industry, but largely on point. The core of our workplace has changed, and insurers are recognizing new talent strategies and cultural refreshes as strategic priorities for 2022.

So, why now? It would be easy to point to the pandemic, but in truth, the climate of COVID-19 merely accelerated change that has been long underway. New virtual and hybrid work environments, the Great Resignation, societal and economic pressures, the emergence of transactional technologies with new levels of automation, and retiring baby boomers all conjoined and placed pressure on change. In response, the insurance industry has been aware of this wave of change and is now rethinking talent strategies and evolving its culture to adapt.

Change Has Come

For more than a decade, we have been talking about retiring baby boomers across the value chain. In fact, 10 years ago, the U.S. Bureau of Labor Statistics estimated the insurance industry would need to fill more than 400,000 jobs by 2020 due to an onslaught of retirements. That reality didn’t materialize as quickly as had been predicted. However, retirements and other external influences have created a different and greater sense of urgency for action.

The good news is many carriers are already taking action. According to recent research from Strategy Meets Action (SMA), 90 percent of property/casualty carriers are currently working on strategic initiatives around diversity, equity and inclusion (DEI), employee engagement, and hybrid workplaces. Even better, 60 percent of carriers surveyed said they are enthusiastic about making this type of culture change—one of the highest percentages we have seen around the issue of culture in the workplace.

Changing a carrier’s culture is no minor task. Ours is a tradition-based industry. Many carriers are more than 100 years old. Leaders are proud of their long-held missions to protect and mitigate risk from accidents and natural disasters, and those missions are the bedrock of insurance. However, the traditional cultures that served our insureds and employees well are under pressure to adapt to a changing world.

Where We’ve Been

Like our mission, our culture has been based on the traditions of insurance and its financial strength and stability to weather all economic storms for stable employment. The insurance industry offers well-defined career paths, competitive compensation and benefit packages with historical retirement packages. Its formal top-down, hierarchical management structure allows everyone to understand their role and place within their department, with underwriting, claims and IT being the center of the business.

This traditional culture resulted in longevity of employment that created deep experience, knowledge and wisdom of the business of insurance. Given that historically, most insurance industry employees have been satisfied with their career choice, employee recruitment and retention never had burning-platform status. Only in the last few years have carriers started getting more aggressive with talent recruitment, focusing heavily on individuals with diverse backgrounds and advanced degrees in technology and data sciences, among other priorities.

Where We’re Headed

With a golden handshake, insurers traditionally offered employees the promise of valued, important and satisfying work, as well as a career for as long as they wanted. This perceived long-term job security resulted in many insurers becoming top heavy as employees tapped out salary levels. This led to various downsizing, restructuring and early retirement packages.

Today, the industry faces an entirely different talent business model. The combination of carriers no longer intending to offer a job for life, and younger workers not looking for one, has changed the dynamics. Emerging professionals also have a new set of criteria and expectations beyond salary, benefits and job security. Work-life balance, cultural fit and alignment to purpose and mission, with no expectations for any golden handshake, are new guardrails.

The next generation of insurance professionals are also more digitally enabled and tech-savvy than their predecessors. They expect roles and processes supported by tools, software and platforms in their workspace to be equal to those they use in their personal lives. They assume the work will be digitally enabled and can’t comprehend manual workarounds, pushing paper or rekeying. Unfortunately, the industry is not there yet. Progress is being made, but there are many gaps.

SMA research shows 94 percent of executives expect big changes in commercial lines underwriting over the next 10 years. However, most technology plans are still focused on core systems, and only 16 percent adjust roles for these new technology solutions while layering the technology onto current processes. This approach creates a maze of manual and automated processes surrounded by legacy and new technologies that will quickly disenchant new talent and increase on-boarding time. This approach with no rethinking of roles, processes or even alignment to culture or talent has to stop. We must invest in technologies using a new lens for how and where they fit.

Remote and virtual work options remain front and center. The transition to virtual work was a great success when the pandemic hit in March of 2020. Carriers today acknowledge the evolutionary way work life shifted in the past two years and must figure out how to transition this model into the future. Remote and hybrid work offers flexibility to employees and a potential boon to carriers in more remote locations. Carriers can now attract top-notch talent from anywhere. However, this same dynamic also makes recruitment and retention more competitive than ever before.

Nonetheless, most carriers need top talent right now. The Great Resignation doesn’t just mean baby boomers are retiring. It also means younger workers are considering alternative careers or becoming self-proprietors in this gig economy. The result is a skill shortage across the industry that creates new levels of skills gaps and challenges.

How We Get There

As carriers begin to reconsider various strategic talent initiatives that include DEI, sustainability, hybrid work models and technology investments, they must ask the right cultural change questions.

Those questions need to include asking employees what they think about culture, mission, purpose and roles. By asking these questions, carriers will hear their voices and the truth of their organizations. Of course, we also need to keep in mind the industry’s vital focus on the customer and customer experience.

Once carriers have the voice of their employees, the right tools to foster a culture shift and new talent strategy will begin to emerge. A few points to consider:

• Lead with a culture refresh. Dust off the 100-year-old culture playbook. Listen to the voice of employees and the marketplace. Then, let culture drive talent strategies, rethinking roles and processes first. Next, roll out technology investment plans. This culture-first approach will boost all levels of talent strategies.

• New talent strategies. Make human resources, talent and professional learning strategic priorities. Most companies put employees and customers at the center—and rightfully so. But today, elevating the focus and priority of new talent strategies and culture evolutions must happen. Look at new business models for finding and recruiting talent while seeking new ways to retain top talent with 21^st century roles. This will ensure talent and culture remain central.

• New business models. Our people business model is traditional. Many departments within carriers work and budget by headcount or full-time employee (FTE). It’s time to challenge that metric. We live in a global gig economy, with budding entrepreneurs willing to share their knowledge. Take advantage of it. Consider what roles must be full-time, which ones could be part-time, and which should be partnered with consulting and outsourcing firms. Talent needs to be empowered and engaged.

• Make hybrid and remote work your strength. Culture was modeled on employees in an office, sitting side-by-side, managing, mentoring and training face to face. That’s not the case anymore. Every business is currently exploring what a hybrid and remote workplace will look like and how it aligns to an evolving culture. Don’t fight it; embrace it. Create the physical office space that invites employees to spend time and collaborate in the office when they need to. Employ work productivity technologies with a lens for how this reimagined work environment functions, collaborates and innovates. These tools should invite in-person, remote and hybrid employees to gather on a level playing field while also allowing each employee to feel they provide a valued contribution to the organization regardless of their work location.

Remember the hard truth is this: The insurance workplace has been upended and changed forever. Embrace the reality of how and where work is done, and by whom. Embrace it all. Energize your strategies and plans and create the next generation of talent in a refreshed culture to ensure future success.