While the insurance industry is meant to serve all people, its workforce doesn’t reflect the diversity of the marketplace. As a benefits agency, how can you do your part to improve the diversity of your own workforce, and promote inclusion for all types of people with all skin tones and genders.
This article offers 12 important tips on recruiting for a more diverse team.
“I would have never come into insurance – my education is in psychology – had it not been for a recruiter who talked to me about this industry, who said this is a great career, this is a great place to grow.” That’s Margaret Spence talking. She is President/CEO, C. Douglas & Associates and founder of The Employee to CEO Project, dedicated to increasing the number of women, especially minority women, in executive-level insurance positions worldwide.
“The first thing that the insurance industry needs to do is accept that it has a racial disparity problem, she wrote in Business Insurance magazine. “The industry has buried its head and pretended that it does not have a diversity problem. You have a diversity problem. It is an inclusion issue as well, with regards to all groups. You have diversity issues with no Black people in leadership.”
The Problem Is Pervasive
Spence notes that the insurance industry has “a mass gathering of minorities at the lower levels of an organization. That’s where they enter. And they will spend 25 years in those positions and never move out of it.”
She’s right. According to 2019 US Bureau of Labor Statistics, of the 157.5 million people employed in the insurance industry, 47% were women, 12.3% Black/African American, 6.5% Asian, and 17.5% Hispanic/Latino. Breaking that down illustrates Spence’s point even more clearly:
- Sales agents – 50.6% women, 10.1% Black, 5.6% Asian, 13.5% Hispanic
- Claims adjusters, appraisers, examiners, and investigators – 62.1% women, 19.5% Black, 4.4% Asian, 9.5% Hispanic
- Claims/policy processing clerks – 81.7% women, 21.8% Black, 2.4% Asian, 15.5% Hispanic
Diversity Benefits Everyone
A diverse workforce benefits employers, employees, and the public at large. The Insurance Journal cited major studies that showed:
- Employees perform better as teams when they feel a sense of inclusion
- Companies with highly diverse leadership tend to be more profitable and derive more revenue from new products and services
- Benefits advisors who focus on diversity and inclusion can often have an easier time attracting top talent
The goal, they noted, “is to achieve a variety of thoughts, opinions and viewpoints in order to truly innovate and make decisions that are well-thought-out, forward-thinking, and reflective of the needs of customers and other stakeholders. Now is the time to take action and ensure organizations are not just talking about diversity and inclusion but moving these initiatives forward.”
Actionable Tips to Diversify Your Recruiting
- Create free programs to educate students about the industry, types of career opportunities available, and personal benefits of working in this industry such as work-life balance and the ability to help people. College students typically are not thinking of risk management, or insurance in particular, as potential majors. For those who are, some in the industry are concerned that universities which offer degrees in risk management still present a barrier, in that they are less diverse than other institutions. This education can look like free webinars, video education, ebooks, whitepapers, guest speaking at colleges, or even live events.
- Create internships that give college students a first-hand look inside the industry and the various career paths within it.
- Establish or participate in externship programs, in which insurance professionals help spread the word within their community about career opportunities.
- Partner with colleges or high schools to target students who don’t plan to go to college or who have dropped out of college, with training that gets these individuals in the door with the insurance industry. As an example of this, Margaret Spence cites high school programs that help students become licensed practical nurses.
- Offer scholarships.
- Sponsor events to build visibility about the industry and its opportunities.
- Promote the industry’s diversity of work options. Like all complex industries, the insurance industry requires skills beyond sales and customer service such as marketing and technology/data management. The industry must sell itself as a multi-faceted source of careers as well as a desirable choice compared to other industries that also require talent with these skills.
- Tap existing employees to help identify ways to create a more inclusive workplace, a process that can benefit future hires and also improve retention by making current workers feel more valued.
- Ensure diversity among finalists for open positions.
- Ensure interview panels are diverse.
- Do a better job of recruiting from within, too. Beyond merely announcing openings, leadership can reach out individually to women and minority employees, inviting and encouraging them to seek higher level and higher profile positions.
- Establish diversity KPIs to monitor progress.
Reach Out to a Younger Audience
The insurance industry needs younger voices and women, says Spence. “We have to begin to go into inner-city schools and talk to students in high school about this industry.” This can be doubly beneficial, because not all roles require a college degree. By targeting high school students, recruiters can also reach individuals who intend to enter the workforce right away.
Early outreach can also help upgrade the industry’s snoozy image. Too many people think insurance is just selling life insurance policies over the kitchen table. It is so much bigger than that. Yet Spence says all at-risk and minority students ever see of the insurance industry are agents trying to sell something or adjusters “making your life miserable” if you have an accident. “Where is the positive spin on this industry?” she asks. “Why would [minorities] want to work here if we don’t see ourselves in this industry?”
The industry has failed to tell its story, says Mark Thompson of Michigan’s Farm Bureau Insurance. Especially the fact that the industry has a tremendous, positive impact on people’s lives. “No one leaves this career after 30 or 40 years of working and says, ‘Wow, that was unfulfilling.’ Our challenge is getting to the front of the line to hear that story.” And in Lansing, they’re working to do just that.
With six insurance companies headquartered in the US, the industry’s economic impact is obvious. But executives are so worried about competition from other industries they formed the Insuring MI Future coalition, aimed directly at recruiting young people of all backgrounds into the industry. The group provides first-hand experiences to give high school students an idea of what it’s like to work in the industry, hoping to pique their interest before they head off to college.
The Future Depends on Recruiting for Diversity
Companies that don't focus genuine attention and energy towards building a more diverse workforce will be left behind. However, even in 2021, with diversity and inclusion at the forefront of our thinking in business, social life and politics, there is still a long way to go. According to Insurance Journal, "insurance continues to be a predominantly white workforce."
Much work still needs to be done. A recently-released study conducted by the Risk Management Society warns that 84% of insurance professionals believe there will not be adequate talent available to serve the industry by 2025. That’s less than five years away. Without determined, broad-based efforts to diversify its workforce and attract younger generations, the industry will suffer.