Insurance, like all industries, is not immune to the effects of a recession. Slowed hiring and a stalled economy certainly present major issues, but a recession doesn’t mean it’s time to panic, nor does it mean your organization has to struggle.
In this two-part series, we’ll discuss how to weather a potential recession as an insurance employer and an industry professional. This first part examines how employers can withstand the recession and hire top talent, even in leaner times.
What is a recession? Are we in one right now?
To begin, it’s important to remember that recessions are a natural part of the economic cycle and to understand what constitutes a recession. Most of us have heard that two consecutive quarters of negative growth in real GDP signal a recession, but that’s not entirely the case.
Recessions can be caused by a number of things—GDP is one indicator as is employment rate and real wage growth. Experts weigh these various factors to determine whether or not the economy is experiencing a recession.
Unfortunately, economists can’t really effectively predict a recession, so we can’t know for sure if we are currently in one. Instead, they can only identify one once we are experiencing it. However, don’t let this alarm you—recessions can vary in length. Although the Great Recession in 2008 lasted roughly a year and a half, the recession caused by the pandemic only lasted roughly two months.
How can I weather the storm?
Start preparing now. The work you do today will pay dividends tomorrow. Some steps to consider include:
- Examining your budget
- Improving your business development/operations
- Reviewing and planning with your leadership team
- Studying the market and planning candidate outreach
Although there is no one best way to prepare for a recession, planning how you will adapt to a slower market will help create better opportunities down the road. In the event that a recession is mild or even passes, you will still have set yourself up for success with a better understanding of your organization and your team.
What do I do about hiring in a recession?
Here’s some good news: even in a recession, people still need jobs. Any potential recession on the horizon could provide unique opportunities. We’re still in a candidate-driven market, and that won’t change overnight.
Declining birth rates combined with increasing retirement rates have created a growing labor shortage, one labor market data company, EMSI, calls a “sansdemic,” a term meaning “without people.”
These issues won’t disappear, and they’re pronounced within the insurance industry. Over the next decade and a half, experts predict roughly 50 percent of insurance professionals to retire, creating nearly 400,000 open positions.
If you do experience issues hiring in a recession, they may not be as pronounced as in recent recessions, and the hiring market could reflect what we see today. As we move into a potential recession with such candidate scarcity, now is a good time to review your hiring practices and consider your hiring goals. How might they change in the event of a recession? How would you pursue these goals?
Taking the time to better understand your own processes will allow you to better position yourself to come out of any recession on top.
Navigating a recession, no matter how large or small, can be a difficult task, especially when it comes to hiring. That’s where we can help. GSR has been helping insurance entities find top talent since 1969—we’ve weathered previous recessions, and we know what it takes to come out on top. Reach out today.