Retirement wave: technology aids in addressing the challenge of an aging work force.

Insurance companies face a human-capital challenge that's reaching the boiling point. Changing work force demographics underscore the upcoming critical shortage of talent. The largest segment of the working population--baby boomers--will begin retiring in the next five to 10 years, and the potential talent pool behind them is smaller and less experienced.

Among property and casualty insurers, a substantial majority of underwriters and claims adjusters are 40 years old or older, and more than haft of life insurance agents are older than 47. As these professionals retire, a huge volume of experience and know-how will go with them, leaving a gaping hole behind. The aging work force is leading to an imminent skills shortage and increased competition in a smaller demographic for large numbers of new talent who are needed to meet growth projections.

The imperative to hire and more effectively train workers is being driven by several trends. Insurers' plans to implement new technologies require training large numbers of professionals in a cost-effective manner. Rollouts of successful IT systems often are hampered by the practical considerations of learning curves and training costs. Pressure to expand product offerings and changes in distribution models increase the need for more product education. Insurers engaged in sourcing strategies face the challenge of serving or collaborating with employees, customers and business partners across many dispersed locations--necessitating cost-effective learning.

It's clear that work forces must be trained to help create high performance. However, the learning function must be simplified, automated and executed more effectively to ensure accelerated speed to proficiency, increased cognition, better employee retention and reduced learning costs.

Accenture survey research confirms that a focus on learning triggers substantial financial benefits and that senior executives rate tin, fling and development as a high priority. Yet training efforts are lacking, with only 17% of respondents reporting being very satisfied with the performance of their training organization, and even fewer are satisfied with progress on boosting work force productivity.

For many companies, the first order of business is to implement a formal process to ensure that the organization captures the experience and expertise of workers facing retirement and transfers that knowledge to newer employees. This can be achieved with Web-based tools that digitally capture video of experienced employees and record their narration as they perform key tasks. These recorded sessions are stored in a knowledge repository that is accessible through a Web portal.

In addition to knowledge transfer, companies should consider adopting new learning solutions to help them more effectively attract, develop and retain employees with critical skills. E-learning solutions, for example, provide faster, more cost-effective and more personalized learning, on demand; technology infrastructures can enable global enterprise management and delivery of learning; and sourcing strategies can reduce costs and refocus resources on core capabilities.

Prior to adopting a solution, insurers must align their training strategy with overall corporate strategy and performance objectives. By doing so, the learning organization will better understand the capabilities the work force must develop to achieve business goals. The learning organization, in effect, becomes the link between the business strategy and the execution of that strategy.

Many property and casualty insurers, for example, seek to expand market share by enabling their agents to develop richer relationships with insureds encompassing a broader range of financial needs. Similarly, life insurance companies are looking to move beyond the annuity niche and increase sales of additional financial products.

To achieve these goals, the learning organization may determine that the best way to upgrade the skills of the sales force is through Web-based training courses designed to help learners pass financial certification exams. A carrier seeking to expand its risk appetite may train underwriters in the safe environment of a computer-based performance simulation course where they are placed in realistic situations.

Insurers also can outsource for a more cost-effective way to deliver comprehensive learning programs. Typically, the carrier retains responsibility for overall strategic management of the learning function, including setting learning objectives and monitoring the performance of the program. The outsourcing partner would develop the program content, deliver the training and maintain the necessary technology infrastructure.

Without a highly skilled and productive work force--something that will become increasingly difficult to create and maintain--insurers will find it difficult to remain competitive and achieve their revenue and profitability goals over the long term.

Contributor Donald Laackman, based in Chicago, is the North American Lead for Accenture Learning for Insurance. He can be reached at [e-mail].