Help wanted: although insurance jobs are increasing, aging baby boomers and a decline in college graduates entering the industry are creating a limited supply of talent.

Key Points

* The insurance industry is expected to experience a 10% growth in new jobs in the next several years.

* Some experts fear aging baby boomers, consolidation in the market and not enough college graduates entering the industry will create a shortage of talent.

* Automation within the industry is opening the doors to a projected rise in information-technology-related jobs.

Nationwide is growing and so are its needs for staff. In 2005, the insurer saw a 50% increase in hiring over the prior year, much of which Rocky Parker, assistant vice president of talent acquisition, attributes to the company's expansion. But finding qualified candidates to fill positions hasn't always been easy. "We continue to raise the bar, so for us, finding the right people at the right time with the right skills continues to be a challenge," Parker said.

Expansion is one of several reasons "help wanted" signs may be more predominant in the insurance industry over the next several years.

The aging of baby boomers likely will leave a large number of vacant positions, and consolidation across the industry also has caused an increased demand for staff. "Some companies that consolidated felt they didn't need to bring all their employees with them, but in effect it's increased their work loads," said Roger Lear, president of Lear and Associates and past president of the National Insurance Recruiters Association, a professional association of insurance recruiting firms operating on a regional, national and international basis.

Another problem, Lear added, is that talent is moving up and out of the industry. "There's been a tremendous recent drop-off of qualified, specialized individuals in insurance, and now companies are scrambling to replace them and find solid, well-trained, five-plus-year-experienced employees who are not only good at what they do but who bring actual value to the company instead of the Band-Aids that some companies used to fill positions."

Some industry experts fear there aren't enough college graduates looking to enter the industry to fill all the empty posts. But insurers aren't giving up hope. They're expanding their recruiting strategies to include everything from online employment Web sites to executive recruiters in their quest for talented, qualified individuals.

In Demand

The U.S. Bureau of Labor Statistics projects total employment will grow by nearly 19 million jobs over the next eight years. That's an increase of about 2.6 million more jobs than were added over the previous 10-year period.

For the insurance industry, that means about a 10% growth in new jobs in the next several years. That growth is already being felt. In February, insurance industry employment rose to an all-time high of 2.288 million, gaining 6,300 for the month and 37,200 for the year ended February, according to A.M. Best Co. analysis of BLS data.

Niche insurance career Web site GreatInsuranceJobs.com is seeing a similar trend. The site is seeing an 82% spike in its job postings over the prior year.

Some experts believe automation within the industry is opening the doors to a projected rise in information-technology-related jobs. IT across various sectors is expected to grow at more than twice the rate of the overall work force between 2004 and 2014, creating one in 19 new jobs, according to the Bureau. However, there may not be enough qualified employees to fill those posts. The college trade group, Computing Research Association, said the number of newly declared computer science and computer engineering majors in the United States and Canada in 2004 fell 23% from the prior year.

The insurance hiring landscape recently has changed. "During the last three to four years, companies were in a wait-and-see mode to examine what would happen in the financial landscape," said Scott Kotroba, president of GreatInsuranceJobs.com. "Unlike other industries, such as technology with its big ups and downs, insurance is much more consistent. Now that we're out of the holding pattern, companies will become more aggressive. The result will be growth, and with that comes hiring," he said.

Meeting a Need

"Ten to 15 years ago, graduates right out of college who didn't know what they wanted to do ended up in the insurance industry," said Cindy Winchell, president and chief executive officer of insurance recruiting firm C. Winchell Agency Inc. "They were hired with no experience and put through massive training programs, and in three years, companies had good, qualified employees." But now, she said, many insurers have eliminated their training programs and seek college graduates with three to five years' experience. "That's forcing graduates to look to other industries, such as banking and investments, that offer them the training they're looking for."

The exodus of the baby boomers likely will take a Financial toll on companies, said Steve Barker, owner of Columbus, Ohio-based Insurance Recruiting Specialists. "Salaries will be driven through the roof for well-positioned and well-trained professionals ready to step into available roles."

Technology also may reshape the insurance employment landscape. For instance, it's changing the face of underwriting, said Winchell. "Interaction with brokers isn't as extensive anymore because underwriters are now doing the back-end side of the process," she said. As a result, under writers are flocking from their profession in search of new jobs such as marketing.

High turnover continues to affect some insurance disciplines, such as customer service and call centers. Gregory Jacobson, co-CEO of The Jacobson Group, fears that it will become an even bigger problem going forward. "As the economy continues to improve and the labor market tightens because of workers' supply and demand issues, employees are gaining more confidence. They're hearing from their friends about major career improvements and changing companies to accomplish that," he said.

A few industry experts fear the industry will ultimately run out of candidates over the next several years.

"It's going to be a brutal blood-bath for great people in the industry," said Lear of Lear and Associates. Instead, he said, companies will increasingly turn to temporary and contract solutions to fill their needs. "That will help put a Band-Aid on the situation where quality candidates can't be found." He also said companies moving off the beaten talent path likely will feel some effects. "They'll spend a tremendous amount of money recruiting people with hiring fees and relocation packages to become more competitive. And good human capital is your No. 1 way to be competitive," he said.

The Hiring Post

"Companies have been generally cautious during the past four years when it comes to hiring," said Barker of Insurance Recruiting Specialists. "They watched budgets and investment incomes and were more cautious in their recruitment approach."

But that's now beginning to change. "Companies are finally becoming more aggressive in recruiting practices and creativity in terms of compensation, in addition to offering flexibility in the work environment and geographic requirements," said Jacobson. Relocation is one dynamic that he said has changed in the industry. "For years, individuals were often required to relocate every couple years, but now workers are demanding certain lifestyles for a work-life balance and are unwilling to relocate." Companies are responding to those demands with such options as telecommuting and long-term community relationships, he said.

"There's no magic formula when it comes to recruiting and sourcing," said Wanda Wiebke, talent acquisition director for Allstate Insurance Co. The Northbrook, Ill.-based insurer relies on such recruiting strategies as online searches, relationships with professional organizations, and colleges to find talented new hires. "In addition, networking is more critical now because of specific skills and experiences companies are looking for ... things you won't necessarily get off a job board."

Jacobson said the industry also has to continue with its grass-roots campaign building relationships in high schools and colleges and through associations. "Therefore, the industry has to make sure it's managing its public image as well as possible."

Insurers such as Ace INA are reaching out to the up-and-coming work force. The company partners with a number of colleges and universities across the United States, including the Temple Fox School of Business and Management in Philadelphia. "It's provided a wonderful supply of committed students who see us as one of their first choices when they begin their careers," said Charles Silla, senior vice president in charge of staffing.

What Everyone's Looking For

One of the key qualities companies are looking for in potential new hires is stability, said Winchell. "Lots of people change jobs frequently, and companies are fearful of that. They want to see someone who's dedicated and loyal, having spent valuable time with one company." In the pool of candidates, those with higher level education also stand out among insurers, she said. "They're not necessarily looking for graduate degrees, but individuals with designations such as [Chartered Property Casualty Underwriter] and [Associate in Risk Management]."

Technical knowledge is another key quality among some employers. "We're using technology to our benefit and not just in the standard insurance area, but also in marketing, finance, sales and investing where we may not have used technology to the fullest benefit before," said Nationwide's Parker.

Other desirable skill sets include analytical ability, problem solving and skills for a specific job. The Life Office Management Association helps companies evaluate those needs. One of its products is a simulation for call center responsibility. "We use technology to create a realistic simulation of the job and the work process. Applicants get a realistic job review and the company gets a holistic assessment of what goes into being a good call center rep," said Barbara LoRusso, manager of LOMA's HR Solutions Group.

"Even today, the industry continues to look for young, white males, who are 25 to 35 years old, with 20 years of experience, who are willing to work for $20,000," said Herb Greenberg, president and CEO of human resources consultancy Caliper. The key to hiring success, he said, is job matching. "Companies need to make sure the person is a right fit for the job, and then give that individual the appropriate training and management needed to succeed." He said companies also should explore other sources of talent, including women re-entering the work force, older adults, physically handicapped individuals, displaced workers, welfare recipients and the company's internal employees, who may have been doing something completely different but have the potential to succeed.

But just as insurers have specific skills sets and qualities they want in potential candidates, applicants also know what they're looking for in employers. Often those expectations differ based upon where people are in their lives, said Allstate's Wiebke. The newest demographics--Generations X and Y--to enter the work force are examples of that. "Someone out of college today may not necessarily be thinking long term and may have their own set of ideas about what they can bring to the workplace. That often differs from someone who's married with children," she said. "However, everyone is looking for meaningful and challenging work that adds value, taking into consideration their own personal needs that may revolve around work-family balance," she said.

Marietta Cozzi, vice president of staffing for Prudential, said candidates want to understand total compensation programs and the culture of the work environment. During the interview and selection process, Prudential's candidates meet with staff members to get a feel for what it's like to work at the company, she said.

Hiring Outlook

"It's going to be a seller's market as the labor market continues to tighten," said Jacobson. "Highly skilled, talented, motivated individuals will have a choice of opportunities. The cream of the crop in the industry are being approached for new opportunities, but they are typically already exploring two or three other situations at the same time."

Jacobson said the industry will have to continue to bridge gaps with its reputation as an employer of choice. His suggestion: Companies should create more entrepreneurial opportunities. "They can't be afraid to bring in talent from the outside. When people join the insurance industry they often find it fascinating and don't understand why it doesn't have the reputation of other industries," he said. Hiring outside the arena would change that perception.

Insurance Jobs

By the Numbers

263,000

The number of insurance claims adjusters, appraisers, examiners and investigators jobs in 2004

303,000

The number of jobs in those areas projected for 2014

6.6%

Projected growth among insurance sales agents jobs from 2004 to 2014

Source: U.S. Bureau of Labor Statistics

Cyber Searching

The Internet produced 51% of all hires in 2005.

Employers' own Web sites were the source of the most job ads.

Newspaper classified ads handled only 5% of new hires.

Source: Direct Employers Association

Great InsuranceJobs.com saw a 95% rise in the number of posted resumes from 2003 to 2005.

Resume increases were 117% in claims, 96% in underwriting and 81% in sales.

Nationwide's recruiting strategy includes job listings on Bloomberg.com, CareerBuilder.com; the Black Voices Web site and Monster.com.

Learn More

Ace Group

A.M. Best Company # 85875

Distribution: Retail brokers, agents, managing general agents, and managing general underwriters

Allstate Insurance Group

A.M. Best Company # 00008

Distribution: Exclusive agents

Nationwide Group

A.M. Best Company # 05987

Distribution: Independent contractors 

Prudential Insurance Company of America

A.M. Best Company # 06974

Distribution: Career agents, brokerage general agencies, independent financial advisers, banks, wirehouses

For ratings and other financial strength information about these companies, visit www.ambest.com.