How insurers are reimagining the workforce in the post-COVID era

HR leaders are seeking new skills, new ways to engage talent and increased talent liquidity to spark growth in a dynamic market.

Workforce transformation remains near the top of the strategic agenda for insurers. A profound shift was underway before the COVID-19 pandemic, with business leaders working to address skills gaps, update their talent practices and instil more dynamic and agile ways of working. The pandemic has raised new challenges, such as the shift to hybrid work, and confirmed the need for insurers – as well as their peers in other sectors – to adopt a range of strategies and tactics in the war for scarce talent. Coming out of the pandemic, with talented workers more empowered to work when, where and how they want, these challenges will only intensify.

Executives are more optimistic about large-scale transformation than ever before, given the lessons of the last year. Anyone who thought insurers were incapable of fast or dramatic change certainly had their eyes opened. Many organizations became significantly more digital and collaborative in just a few weeks. They demonstrated their ability to operate in different structures and under difficult conditions. Workers collaborated on the fly and quickly adopted new tools. Resources were allocated where they were needed most and to meet surging demands (e.g., in claims and customer service). Now, many executives are considering which of these new behaviors and cultural changes must be nurtured and sustained for the long term.

While the immediate focus is on return-to-work plans and strategies for a hybrid working world, talent leaders in insurance must build on the fresh thinking and transformative spirit of the last year to reimagine how they think about the workforce. That means thinking through the necessary skills and talent and the best ways to engage and retain workers. This article will outline both the “demand” and “supply” sides of the work equation, highlighting the need for strategic workforce planning, a clearly articulated purpose and the many new options for building capabilities and engaging talent.

Understanding talent demand: success starts with knowing what you need – and what workers want

There’s broad consensus that tomorrow’s top-performing insurers will have different business models, offer new products and services and face non-traditional competitors. Thus, it’s no surprise that insurers will need different skills and talent if they are to ignite growth and thrive in a more dynamic market. The goal must be to identify the “must-have” skills, capabilities and mindsets based on core business strategies. A firm that focuses on a specific customer segment within personal lines (e.g., millennial motorists) will have distinctly different talent needs than one that wants to offer market-leading experiences for large commercial customers. Those differences will dictate overall workforce strategies, as well as the specifics of talent sourcing models.

Talent analytics will become more important as HR teams think differently about how the organization identifies and manages talent. More organizations understand that, given the limited time and resources to invest in building new capabilities, they must prioritize those that align most directly with the shift to their future business needs and strategies. Structured and data-led planning can help them find the right course. Such an approach to planning clarifies the trade-offs between numerous options that are available and then allows firms to choose the best course of action. It also provides ongoing and forward-looking visibility into the capabilities organizations need.

Increasing talent liquidity: leading insurers increase engagement and resilience

The most strategically-minded and forward-looking HR leaders will look to increase their organizations’ talent liquidity via their internal development programs. Internal development is especially important given the shorter lifespan of skillsets today. Learning programs must support continuous development with a focus on the critical capabilities of the future.

Learning and development programs must be reimagined for the hybrid and remote worlds. The same is true of leadership development and managerial support programs. Optimally, self-directed learning will be blended with more formal programs. Insurers should focus on what they do well. For instance, those with particularly strong underwriting capabilities may consider building out functional academies that could be offered as a service to others, via new partnerships, joint ventures or emerging industry ecosystems. Such offerings can support the business case for investing in workforce transformation.

The goal is to develop talent that is more easily moved around the organization as business needs dictate. Typically, such employees have a set of core skills (e.g., data science, user experience design, product development) that are “topped-up” or complemented as they move from one business unit or functional area to another. Such an approach gives insurers the ability to more flexibly use the skills they have.

By enhancing agility when resourcing roles, projects or activities, talent liquidity enables organizations to more quickly match demand for specific capabilities to the supply of talent. This skills-based approach to managing talent makes the right resources and capabilities more mobile and readily accessible across the organization. In this sense, it’s perfectly suited to remote and hybrid working models.

Maximizing talent liquidity requires accessing and exploring new talent pools, with an emphasis on allocating and deploying people and skills where they are most needed and can contribute the most value across the organization. It’s also necessary to build a value proposition for your people based on what you stand for and how you’re working.

There is ample opportunity to create value through talent liquidity, but HR leaders should be aware of various trade-offs and common challenges, including cultural constraints and sub-par visibility into opportunities across the organization. Successful workforce transformation will also require more flexible HR processes and policies. A different workforce composition means different contracts, compensation structure and benefits. Similarly, employee wellbeing and support programs should be enhanced and refined. The learnings of the last year around keeping employees engaged, promoting teamwork and avoiding burnout should definitely be applied. Along with more robust support for workers, digitizing and automating core HR processes can further enrich the employee experience.

Policies around remote working will be critical, too. Looking ahead, it’s clear that some roles will be more amenable to remote working than others, though all workers will likely be looking for more flexibility. Thus, HR leaders must establish consistent frameworks and standards for worker flexibility.

Winning with talent and capabilities

One of the paradoxes of the digital age is that human talent will be more important than ever for successful businesses. Human judgment and experience will remain vital even as companies adopt ever more powerful technologies and extend automation across the business. Because every company will have access to massive computing firepower and sophisticated analytics, competitive advantage will come from having the smartest people, most collaborative teams and strongest cultures.

The emerging hybrid work era will provide new challenges for HR leaders in Insurance, offset by a range of simultaneous opportunities. Achieving success will require a focus on both enhancing the talent base of the organisation whilst augmenting and expanding the breadth of capabilities they have access to.

Special thanks to EY's Louisa Blain, Associate Partner, Insurance, Ernst & Young LLP for contributing to this article.