Waiting to hire could cost you
Why the insurance industry could see the cost of talent rise as the year goes on
By: Mike McDonough
It’s a new year. Budgets are finalized, focus areas are identified and lots of companies are starting to look at the positions they’ll hire for in 2018. But several factors could make the cost of those positions rise as the year goes on. Here are just a few of the reasons you should hire now, before the market drives up prices.
Wage increases stalled in 2017
Salaries in the insurance industry rose by a mere 3% last year, well below the average of 4.5% we’ve seen recently. However, most industry experts still see a steady rise in compensation until 2021 at least. That means this year could see the market playing catch up for the slumping salaries of last year. As the talent market continues to pick up steam in March and April, you could see the same experience level getting paid 2-3% more than if you’d hired them now.
The talent market establishes itself by March
What should an agent get paid in 2018? What about an executive? The market will mostly answer these questions by the time spring rolls around. You want to be a company that is setting the standard for compensation, not bowing to the demands of an established rate. To do this, you need to focus your hiring efforts as early in the year as possible – before salary guides and your competition set the compensation standards for you. Also, since most companies make their hiring push in January and February, you will see lesser talent start demanding more after the top candidates find their placements and establish salary levels. You could even wind up paying more for lesser candidates.
Demand is still high in the industry
Hiring in the insurance industry is projected to surpass the national average in 2018. The national hiring average is also projected to rise over the next year. That means that we’re a high-demand industry in a high-demand climate. With the insurance field growing, we could see up to 150,000 new positions created in the U.S. alone. That’s a lot of demand to fill. It’s magnified by the fact Baby Boomers are still retiring at an alarming rate. We’ll likely see a candidate-driven market in 2018, which will send the price of talent soaring.
There’s a shortage of insurance graduates
The average age of a professional in the insurance industry is 54. That number is actually rising, not falling. The reason is that over 60% of people in our field are 45 or older, and recent graduates are turning away from insurance. As companies use technology and automation to streamline their workflow, college students see that as a sign insurance jobs may not be as stable as they once were. Not only does that put companies in a challenging position to fill entry-level positions, but it’s also drying up their talent pipeline for upper-level roles. That makes filling every position more competitive and costly than it used to be.
The price of talent in our industry will rise in 2018, but fortunately for hiring managers, we haven’t started seeing those increases quite yet. By dragging your feet on filling a position, it could end up costing your company 2-3% more to hire a candidate with less experience. The only way to avoid this predicament is to strike while the weather is cold. Because once spring arrives and the market establishes itself, we could be looking at a candidate-driven environment for the rest of 2018 and beyond