Tag Archives: brain drain

Beat Brain Drain: Boost Your Talent Pool

Overview

Shifting demographics are starting to reshape the workforce. As baby boomers retire, in most developed markets there will simply be fewer people of working age to fill positions. Not only is the pool of locally available replacement talent shrinking, but competition for their talent is on the rise.

The people shortage is exacerbated by the lack of growth in graduates with science, technology, engineering and math (STEM) degrees. This is happening at a time when, because of rapid advances in technology, the demand for these skills in the workplace is on the rise.

At the same time, businesses are also finding that the leadership and experience of the baby boomers are being sorely missed. As they leave the workforce, baby boomers are taking decades of knowledge with them, while younger generations often have yet to build up the experience and leadership skills needed to maintain successful businesses.

So how can businesses respond to this confluence of demographic and training challenges to avoid being hit hard by a skills shortage that could be even more pressing than the one the world is already facing? With an emerging challenge this great, this is not just an HR issue – it’s core to future business strategy.

In-Depth

How are business leaders coping with the rising demographic, technological and human resource challenges they face as experienced staff retire and new technologies disrupt industries and require new skillsets?

The first step in addressing these challenges is to understand staffing as part of a holistic business strategy. Organizations need to identify the critical skills and roles needed to support overall goals and objectives and build a sustainable talent pipeline.

Aligning talent strategy to business strategy in this time of rapid change requires taking a long-term view. It’s not just about hiring for the positions you need today but about identifying the critical skills needed to help your business adapt over the long term.

How to Tackle an Emerging Talent Shortage

At a time of increasing competition for qualified people, what many of the firms are focused on now is creating a culture that is attractive for people to join and stay with. With as many as a third of employees thinking about leaving their current job within a year, according to Aon’s latest Workforce Mindset Study, this isn’t just about attracting new staff — it could be about preventing existing employees from being lured away by a competitor.

Both mature and fast-growing industries are focusing on developing a culture to help them compete for scarce talent and become more attractive to their current and future workforce.

When it comes to culture, here are a few things organizations can do:

  1. Develop leaders who are engaging and serve as role models — With corporate leaders increasingly high-profile (and with leaders as a top driver of employee engagement), select and develop people who can act as internal and external role models and create an environment in which people are appreciated and motivated.
  2. Establish a clear employee value proposition — To stand out from the employer crowd, think about how to make your corporate culture feel more distinctive and attractive by offering support in career development and continual training, as well as competitive compensation and benefits.
  3. Develop and articulate a sense of purpose — With workers increasingly wanting employment that means something beyond just making money, explaining what your business stands for can be a powerful tool to attract like-minded talent and drive long-term employee engagement.

In addition to culture-building, planning for tomorrow’s workforce is key. Talent shortages are likely to remain a feature for years to come. Ensure your business has the qualified staff and skill sets needed by adopting a long-term program for attracting, training and developing the people who will drive its success over the long term — not just for this year’s needs, but for five to 10 years.

There are a few things organizations should consider doing to help with their long-term talent needs:

  1. Establish apprenticeships — Not only does on-the-job training help you cultivate the skills your business will need, it can help promote loyalty and long-term engagement. With training and career development opportunities as strong pull factors for modern workers — especially from younger generations. Making training a continuing part of your business from the early stages of employees’ careers can be a powerful proof point in your commitment to employee development.
  2. Work with schools — Encourage changes in the educational system that support the development of needed skill sets in the long term. Ensure students are made aware of career opportunities in your industry and of the true value and potential a career with your organization can bring.
  3. Commit to workforce diversity — Women and minorities still have significant under-representation within the managerial ranks of many industries. Organizations should be reaching out to qualified minorities, not just because practicing equality in the workplace reaffirms your business’ commitment to fairness, but because diverse workforces are a proven driver of innovation. Not only have organizations with greater gender equality proven to perform better, but being seen as promoting gender equality in the workplace can be a powerful attractor for talent.
  4. Globalize your hiring — Developing countries around the world are producing well-qualified staffing for accounting, data analysis and other financial services, while in healthcare a majority of newly qualified healthcare professionals (including nurses and general practitioners) are graduating from schools in these countries. In a globalized world, the competition for talent is also increasingly global, so you increasingly need to look where the talent is, not just where you would like it to be.

Talking Points

“Rather than focusing on salaries alone as the cure-all for attracting employees, corporations would be wise to look closely at the wider expectations and demands of their candidates, if they are to draw in the best talent. … While increasing the flexibility of the job offer can provide an effective short-term solution to draw in the best candidates, ultimately even these measures won’t resolve systemic talent gaps that have a significant impact on the long-term health of the business.” – Tara Sinclair, chief economist, Indeed

“The struggle to fill vacancies is holding back growth and opportunities for business, and it is essential that both government and industry work together quickly to identify ways to plug this gap.” – Mike Hawes, chief executive, Society of Motor Manufacturers & Traders

“Companies looking for sophisticated skillsets are starting to look to foster skills and relationships with future employees among high school age students.… If you’re not already thinking five to ten years ahead for your talent needs, you need to.” – Usha Mirchandani, partner, talent analytics, Aon Hewitt

Further Reading

Training the Future Claims Adjuster

Unless you’ve been frozen in carbonite for the past 15 years, you’re probably aware that the insurance industry is facing two imminent HR crises:

  1. A Brain Drain– Twenty-five percent of the industry workforce is expected to retire by 2018, according to Insurance Business America. But wait! It gets better. In addition to filling vacancies caused by attrition, companies will have to recruit workers to staff the 200,000 new jobs the Bureau of Labor Statistics expects the industry to create by 2022.
  1. An Enthusiasm Gap– Even today, the industry is struggling to attract young talent. According to a 2012 study by the Griffith Insurance Education Foundation, only 5% of Millennial students describe themselves as “very interested” in working in the insurance industry. When it comes to considering a career as a claims adjuster, the “Y” in Generation Y stands for “yawn.”

Two Problems, One Solution

I believe new and emerging information technologies will play a critical role in overcoming both the Brain Drain and Enthusiasm Gap.

Many young people would rather view an endless loop of piano-playing cat videos on YouTube than work as a claims adjuster. Or so they think

With the imminent arrival of usage-based insurance, there is a lot of excitement developing in the underwriting sector, and I believe the same level of enthusiasm will also attach to technologies such as cognitive analytic computing. These new technologies are innovative. They’re challenging. They’re fun.

More important: Technologies like cognitive computing will change the very nature of the claims adjuster’s job – from one that requires a fair amount of dull administrative tasks to one that places much more emphasis on analysis, creative problem-solving and people skills.

Skills Will Trump Experience

In the future, we’ll see fewer claims adjusters in the workforce, but this smaller pool of talent will be trained in a different ways and in different skillsets than previous generations. Tomorrow’s adjuster will not possess – and will not need – the wealth of experience, knowledge and (to some extent) skills as today’s adjuster. Instead, new technologies will provide them with the tools to instantaneously obtain that knowledge, experience and skill.

The future adjuster won’t be trained in many of the manual and repetitive tasks his predecessor had to learn. Tasks with little or no value will be automated. Rather, the adjuster will have to be tech-savvy. She will have to know how to analyze information because, even with the help of cognitive computing, she’ll still need to analyze reams of information – data related to vehicles, collision-avoidance technology and event data recorders.

She will also have to be familiar with product liability issues. When self-driving cars become commonplace, adjusters may not be dealing with losses involving driver fault. Instead, they may encounter instances in which the vehicles malfunctioned – product-liability claims – and will have to know how to process claims with vehicle manufacturers and the suppliers of advanced collision-avoidance systems. Future adjusters will need to tap skills and knowledge that their forbears never dreamed of.

Tech-Savvy and People-Savvy

Future adjusters will have to be much more tech-savvy, even though they’ll be responsible for performing fewer tasks. At the same time, they’ll need superior people skills to ensure that customer service isn’t lost amid increasingly automated processes. Although the industry will automate many tasks, and many customers will be pleased with this development, customers are already demanding higher levels of customer service. The “personal touch” isn’t just a side benefit: It’s often the main driver behind a consumer’s decision to choose one carrier over another.

So adjusters of the future will be people who are very customer-oriented, very tech-savvy, very intelligent and very skilled at interpreting mountains of data. They won’t have to perform a lot of clerical and administrative tasks. Automation will virtually eliminate that work. But they will have to know how to optimize new technologies to deliver superior customer service and the best possible outcome to every claim.

We in the claims industry have to find ways to inspire, energize and interest young people in careers as claims adjusters. Currently, this isn’t a vocation many Millennials seek. With the help of new and emerging technologies, however, we can be seen as a fun, innovative and inventive sector that adds value to the lives of ordinary people. After all, getting into accidents causes a great deal of stress for most vehicle owners. For that reason, our industry needs adjusters who are adept at a wide variety of claims-processing and customer-service challenges.

Solution to Brain Drain in Insurance?

What was once science fiction is fast becoming a fact of today’s business world. Computers that mimic the human brain are already entering the workforce in the healthcare, financial services and retail sectors, among others.

Like humans, cognitive analytic computers can understand “natural” language (such as English) and learn lessons from the data they analyze, as well as from the users who “mentor” them. In other words, the machines possess an artificial intelligence more powerful than anything seen before.

Unlike humans, cognitive analytic systems can process, analyze and store enormous volumes of data at Internet speed. In addition to tapping conventional databases for the information needed to aid in decision-making, the machines are capable of scanning myriad emails, reports, articles, books and other sources of knowledge to deliver recommendations and reach conclusions beyond the ability of any one person or team of people.

In a 2014 white paper on cognitive analytics, Rajeev Ronanki and David Steier of Deloitte Consulting note that in the healthcare industry, “[cognitive analytic] systems are being used to improve the quality of patient outcomes. A wide range of structured inputs, such as claims records, patient files and outbreak statistics are coupled with unstructured inputs such as medical journals and textbooks, clinician notes and social media feeds. Patient diagnoses can incorporate new medical evidence and individual patient histories, removing economic and geographic constraints that can prevent access to leading medical knowledge.”

In financial services, cognitive analytics is used to recommend and execute trades and to also assist in fraud detection and risk underwriting.

Many of us are familiar with less advanced forms of cognitive analytics. In the consumer electronics realm, examples include Apple’s Siri voice recognition software and the oral command interface used in the Xbox video game system.

Virtual Decision-Making Assistance

It doesn’t take much imagination or intelligence (human or artificial) to envision how cognitive analytics could revolutionize auto insurance, especially the claims sector.

Cognitive analytic computing could be of enormous benefit to an industry that will see fewer claims adjusters in the near future, thanks to the number of veteran adjusters who are retiring or planning to retire. Cognitive analytics could empower the remaining adjusters with decision-making assistance that was previously inconceivable – decision-making based on huge volumes of data drawn from a near-infinite pool of sources.

Not long from now, computers will be able to scan photos of accident damage and instantly retrieve historical data on how similar claims were assessed and settled in the past. For example, a computer could analyze a person’s injuries relative to where they were sitting when the accident occurred and how the injury was sustained.

The systems could also be used in first notice of loss (FNOL). Imagine an intelligent learning system that can reference every text related to previous claims and outcomes, as well as every law and vehicle code from all 50 states, to deliver settlement information in milliseconds.

Let’s say a customer submits an FNOL. “I was in a parking lot, but when I backed out of my space I hit someone driving past.” Based on the information provided, the machine could determine liability and assign fault. It could also decide whether the claim is best processed with the help of a human adjuster or via self-service. If a customer reports an accident that leaves a small scratch on the car and no injuries, the computer would automatically send a self-service text to the claimant’s cell phone so she could take photos of the damage and transmit them back to the computer. The machine would then analyze the photos and develop an assessment.

Yes, the computing system could be that advanced – so advanced that it removes much of the human element from the process.

‘Brain Gain’ Instead of ‘Brain Drain’

Many adjusters in their 50s and 60s are retiring, which means a lot of valuable expertise and experience is leaving the industry. In fact, I’m probably a member of the last generation that remembers widespread use of full-service, multi-skilled adjusters – people who know every aspect of the business. Younger adjusters frequently work in silos. These compartmentalized workers are very skilled in certain things but don’t have the “Renaissance man” backgrounds that allowed their predecessors to wear “multiple hats” when the situations called for it.

Thanks to the new technology, however, the older generation’s experience and know-how doesn’t have to be lost forever. That information and wisdom can be transferred to complex cognitive computing systems that instantly retrieve the data on every one of their past settlements. This will let the remaining adjusters use the machines as virtual assistants, calling on them to provide the most logical settlement paths to the best possible outcomes.

If achieving the best outcomes to claims is the goal, then cognitive computing systems will prove to be an invaluable tool. With access to a virtual universe of prior decision-making (good and bad), cognitive analytics has the potential to help adjusters find the right solution to each and every auto claims case.

Brain Drain: 22 Steps to Reduce the Impact of Retirement and Increase Employee Retention

Is your organization ready to lose as much as 25% of its intellectual capital in the next decade? You need to be, because more than one quarter of the U.S. working population will be old enough to retire in less than three years, according to the U.S. Bureau of Labor Statistics.

This may lead to a shortfall of nearly 10 million workers. Add this flight to an average job stay of four years, where today’s employees switch to a competitor without so much as a backward glance, and businesses in America are at risk.

America is poised for a brain drain so dramatic that many companies will find themselves unprepared to face the coming talent shortage. Yet it appears few companies are taking steps to deal with the crunch. 

This article explores actions companies can take to manage looming intellectual losses. Some are straightforward; some will take more planning. Any organizational change comes from the top, and industry leaders must deal swiftly and strategically with the changes our work force will undergo in the coming years.

As companies increasingly rely on intellectual capital, the value of work force intelligence to an organization cannot be overstated. There is little doubt that the insurance industry, so reliant on intellectual capital, should be at the forefront of addressing the looming loss of intellectual capacity.

Where Did All the Experts Go?

Brain drain historically has been defined as the loss of human skills in developing nations, usually because of the migration of trained individuals to more industrialized nations or jurisdictions. However, as baby boomers begin to retire, the term is increasingly used to describe the loss of intellectual capital at U.S. organizations. Downsizing also takes its toll on work force intelligence.

The U.S. work force has changed dramatically. A baby boomer’s parents may have held one job in their entire careers; experts estimate a typical young American will hold from seven to 10 different jobs before retirement. Insurance organizations are experiencing brain drain as long-term employees retire, switch employers or change careers. There is little doubt—insurance organizations are about to see drastic changes resulting from this exodus.

Future employment demographics should sound an alarm to insurance companies in America. Over time, the lack of top talent can be devastating to an organization, especially in an industry as complex as insurance. Add an increasing dependence on technology, and future employee skill deficits are a certainty, not just a theory. While this exodus is beginning to hit the insurance industry now, it will accelerate greatly in the next few years as aging boomers, those best placed to assume senior management roles, retire. This talent shrinkage must be managed now, before organizations find themselves in crisis.

Penny-Wise, Pound Foolish?

It may seem profitable to replace an older, more costly employee with a younger person. However, organizations may lose a great deal more than they bargained for with that replacement. With the departure of these highly experienced employees, companies lose more than their individual expertise. Also lost is what psychologist Daniel Wegner calls “transactive memory.”1 Transactive memory is information a person accesses that is outside of his or her own memory, information routinely called up by using another person’s memory.2 Groups where this transactive memory is understood and valued function better than groups that lack this trait.3

Take co-workers. On a difficult property claim, an adjuster may turn to a co-worker and ask, “What is the name of that engineer we used a few years ago in Georgia on that storm-surge claim?” Our brains can store only so much information. If we have access to people around us who may be more suited to remember a particular type of information, then we don’t have to work as hard to remember items that we don’t understand, don’t recall or don’t need at the time we hear it.

Brain drain slows the work process and impairs a company’s product quality. It can result in inefficiency because of the time it takes employees to find new co-workers with the information they may need. It can also result in costly mistakes resulting in lawsuits, lost subrogation opportunities or claims paid that, with a thorough investigation, would have been denied. Probably most importantly, a work force lacking robust intellectual capital loses its strategic advantages and abilities to respond quickly to business opportunities.

Insurance professionals are concerned about brain drain, yet even a casual review of insurance literature shows that much of the focus in industry research centers on improving technology to enhance operations. Even the term “human-resource management” seems to be morphing into a robot-like term, “human-capital management.” This disembodied approach seems to negate the fact that we’re still dealing with people; yes, they may be “capital’ to a company, but most employees would be offended to hear themselves referred to in that manner. “Talent management,” the new euphemism for recruiting and retaining employees, again seems to dehumanize the worker. Few people appreciate being “managed” or referred to as “capital.”

The emphasis in insurance companies seems to have shifted away from quality toward quantity. How much faster can we complete a process, appears to be the question. Can we settle a claim in 30 days, even if we have to throw more money at it? Has customer service and quality been forgotten in the effort to improve company operations? Have we, in an effort to increase profits, driven much of our brightest talent right out the door?

The Devalued Older Worker

Insurance message boards are filled with complaints from older, highly experienced insurance professionals who cannot find work, some with two to three decades of knowledge. “I have a solution to the brain drain in the insurance industry. Hire me and all those still looking for work … and some of the people whose resumes are posted on the Broward County RIMS website, among others,”4 one frustrated professional said in a June 2007 on-line risk management discussion. If these complaints are true, the widespread reluctance by insurance organizations to hire older, experienced workers may backfire because of the lack of new talent breaking down doors to enter the industry.

Nowhere is brain drain felt more acutely, it appears, than in claims departments nationwide. According to Conning Research & Consulting,5 70% of the nation’s adjusting staff is age 40 or older. “I have found this [talent leakage] particularly true in the claims arena,” according to James Brittle, a producer in the National Accounts division of Cobbs, Allen & Hall in Birmingham, Alabama.  “Coming from the highly engineered chemical and energy field, try to find one carrier that still has experienced and knowledgeable adjusters to handle property claims. There are two options — young and inexperienced or experienced and independent. The latter group is getting smaller and smaller. It’s not real comforting.”

How can companies prevent brain drain? Here are some possible solutions.6

1. Analyze current workforce strengths and talents to determine core competencies.

If an employee’s store of knowledge is known only to a few co-workers, then it is largely useless to the organization as a whole. It becomes an information silo, a vertical information cluster that is not transmitted laterally to co-workers, usually to the detriment of the organization. Analyzing employees’ expertise and knowledge and categorizing it so that it becomes accessible by other employees and departments is critical to improving and strengthening the work force.

2. Determine, through surveys or informal meetings or email queries, where employees go for specific information.

Who are your employees’ “information agents” in given areas? Imagine this scenario—a Lloyd’s underwriter wants to issue a binding authority to an agent in Florida. Before agreeing, however, the underwriter must determine wildfire hazards in the counties where the agent wants to write business. If the underwriter can, with a few keystrokes, search a database that shows Lloyd’s experts who understand catastrophe modeling and perhaps understand wildfire exposures particularly well, the decision to issue the binding authority can be made more easily and accurately, not to mention more quickly.

Knowledge Asset Mapping, written about extensively by British researcher Bernard Marr, allows organizations to locate and diagram internal knowledge. This visualization of intellectual capital, which Marr states is the “principal basis for competitive advantage,”7 can then be used as a strategic planning tool so that organizations can predict future intelligence gaps before they occur.

Today’s organizations must be agile to compete. Classifying employee knowledge to make it more accessible to others in the organization can help companies make decisions rapidly. It goes without saying that companies like Apple have seized marketplace opportunities to catapult themselves into leadership positions. Without sufficient intellectual capital, however, a company may not be robust enough to respond to opportunities as they arise.

3. Prepare to replace exiting information agents when those employees retire.

In smaller organizations, this process may not be formal. It may be as simple as acknowledging that an employee who is an expert on a subject is leaving. Notify all employees of the loss of this person, then direct them to another employee who may not have as much knowledge, but has some knowledge in that area. The company must develop incentives and time frames so that newer information agents can become experts on specific topics as gaps arise, and even before they arise.

4. Determine which employees are potential flight risks, whether to retirement, recruitment or family pressures such as aging parents.

Talk openly with employees who are considering retirement or having home/work difficulties to determine how you can retain them. Flexibility is the key—the employee may need more time off or greater leeway to work non-core hours or to work at home. If the Family and Medical Leave Act (FMLA) is voluntary, your organization should consider allowing FMLA leave.

5. Hire retiring employees as consultants on a part-time basis to retain their expertise.

With increasing cost of medical care for retirees, many welcome a supplement to their retirement income. Adding benefit package components that appeal to older workers, such as long-term care insurance or prorated health coverage for part-time work, may help retain them, as well.

6. Provide incentives for employees to consider postponing retirement.

When an organization considers the total impact of losing a long-term employee, it is generally cheaper to retain that employee than to hire and train a replacement, especially if the employee’s knowledge routinely saves the company money. Consider the following scenario:

A claims manager will retire in two years, after working more than 30 years for just two carriers. He is one of the top arson investigators in the Midwest, taking dozens of arson claims to trial or to closure. Currently, there is no one else in his company who handles arson files without his supervision, and no one who remotely approaches his level of expertise.

What happens to this company when he leaves? How much will his departure cost the company in terms of claims payments that might have, with his expertise, been compromised or denied? Can this organization really afford to lose the employee’s expertise without a solid exit strategy?

7. Use technology to drive intra-company communications.

Intranets, videoconferencing, peer-to-peer technology and podcasts are information ways that allow workers to communicate over distance and varying time zones. Encourage disparate and divergent workers to develop virtual relationships to share ideas and solve problems using these tools. Why not take advantage of your global work force?

8. Establish “practice communities” where individuals from various departments — claims, underwriting, marketing and reinsurance — meet regularly to solve problems.

According to James Surowiecki, author of The Wisdom of Crowds, a crowd is a group of diverse people with differing levels of intelligence and information who collectively make smart decisions. A good example of this wisdom, as many claims managers have found, is “round tabling” a claim. Allowing a group of adjusters with varying amounts of experience to determine a claim’s value or to develop a plan of action to kick a stalled claim forward often provides excellent results and acts as a learning tool for less experienced team members.

Surowiecki defines four elements that make a smart crowd. He recommends a diverse group because each person will bring a different set of experiences to the process. The crowd should have no leader, so that the group’s answer can emerge. But there must be a way to articulate the crowd’s verdict. Finally, people in the crowd must be self-confident enough to rely on their own judgment without undue influence from other group members.

With today’s sophisticated technology, organizations don’t have to rely solely on local talent. A company-wide initiative can be implemented readily with some help from your organization’s information technology department. Practice communities build virtual relationships that, in turn, make employees more connected to the organization.

9. Organize and memorialize your practice community results with wikis, a decade-old web application that allows many people to collaborate on a single document.

There are several sites dedicated to collaborative writing, including https://www.zoho.com/docs/. Visit http://www.wikipedia.org, the on-line encyclopedia written by collaboration, to view an example of wiki technology at its finest.

10. Implement a formal mentoring program.

Some insurance organizations have implemented mentoring programs. The National Association of Catastrophe Adjusters formed a mentoring program in 2005. While not online, it matches new adjusters eager to learn CAT adjusting with experienced field adjusters.

Aon Services is almost a year into an ambitious mentoring project. With 600 Aon employees in the pilot program developed with assistance from Triple Creek Associates in Colorado, Aon expects to roll out the program companywide. The program was not limited to senior manager mentors; anyone in the organization with good performance was eligible to participate. “This challenged our operational paradigms, to have a junior person mentoring a senior person,”8 according to Talethea M. Best, Aon’s director of U.S. talent development.

The results have been positive, she reports. 86% of the mentees and 62% of the mentors who responded to a recent survey felt that the process improved their own performance. 85% of the mentees and 78% of the mentors would participate again if asked.

“We encouraged a protégé-driven process,” Ms. Best said. Potential mentees used a computerized platform with specific parameters to search for what they wanted in the mentor relationship. “It was a win/win for all involved,” Ms. Best said.

“This [mentoring project] was an opportunity for us to think more strategically,” Ms. Best reported. “To retain employees, it is critical to make people feel invested and engaged. How do you make folks feel like they make a significant contribution? Mentoring is a way to address that,” at a cost of pennies per employee, Ms. Best said.

Not all managers are mentor material. To be effective, mentors must receive some training. Aon addressed this concern with initial employee development workshops.

To ensure the highest quality mentorship for your employees, it is critical that mentors are carefully selected not only for their technical skills, but for their ability to communicate effectively in an increasingly diverse work force.

11. Pool knowledge across organizations.

Your Encore, founded by Procter & Gamble and Eli Lilly, is a society of retired research scientists and engineers who “continue to provide value―at its highest level—to companies on a consulting basis,” according to its website. The insurance industry is particularly well-suited to this approach because risk pools changed the face of insurance, so the models to implement this approach are already well-accepted by our industry. Don’t be unreasonable with information, but do set some ground rules and ensure employees comprehend which information is proprietary and which can be shared.

12. Cross train employees.

“A former employer of mine combined the loss control and underwriting functions,’”9 and it worked out well, reports Mike Benisheck, director of risk management for Pacific Tomato Growers. “They had a historical loss ratio of 30–32% annually for about 15 years.” When the functions were separated, losses spiraled, Benischeck reported.

Cross training can limit employee burnout and provide new motivation for employees who feel stymied in their careers. It also strengthens an organization’s operational team.

13. Cultivate a culture that values expertise.

To prevent brain drain, an organization must provide an atmosphere that values aging workers and the knowledge they possess. Recognizing, but more importantly acknowledging, their contributions to the organization, not just the number of claims they close or the amount of new business they produce, may mean keeping employees a few years longer. Small changes in any organization, as anyone who read the book The Tipping Point knows, can mean enormous changes overall.

Younger workers should be made aware of demographic trends and what they mean to their careers. Many younger workers are eager for career advancement. The demographics pointing to a sharp talent drop are in their favor if they prepare themselves, and organizations help them prepare, to take supervisory and management positions. Few younger workers recognize this trend. Organizations that speak frankly of these developments and what they mean to each person, not just the organization itself, will build loyalty and perhaps help to cultivate patience in generations that are used to quick answers and quick solutions.

14. Encourage employees to join online insurance groups like RiskList or PRIMA-Watch.

Insurance professionals are notoriously generous with their time and information when it comes to helping their counterparts, as any insurance industry employee knows who belongs to a professional organization. Insurance server lists have been online for many years with a faithful membership. List members will respond to just about any inquiry with an impressive depth and breadth of knowledge, with some humor thrown in, as well.

15. Support employee membership in professional organizations like your local claims association, Insurance Women, RIMS or CPCU Society.

“Support” means paying dues and supporting the absences necessary for employees to both attend conferences and to hold committee positions. This gives employees a strong network to turn to for information and support. There has been a mindset in the industry that allowing employees to network outside the company increased the employee’s flight risk. More enlightened managers realize that if employees feel valued for their expertise and encouraged in their professional development, they are generally more loyal to their employers.

16. Offer incentives for obtaining professional designations. Offer greater incentives for attending classes rather than online participation.

According to the CPCU Society, in 2006, 88% of CPCUs were age 40 or older. Taking a class from an experienced instructor with students from other companies and disciplines gives students a much broader experience. It also exposes them to others with whom they can network or seek advice. Designations are a clear indicator that employees see insurance as not just a job, but a career.

17. Avoid the human resources “silo.”

An information silo is a pool of information that is not well-integrated in an organization. Human resources departments often act as “silos,” gatekeepers in the hiring process, by determining which applicants get interviewed. Forming inter-departmental hiring panels, teams that develop job descriptions, review applications and give input on general hiring and other personnel issues like employee retention, can greatly improve a company’s work force.

18. Don’t underestimate the impact that younger generations and their different work standards have on older workers.

There are four generations of workers in today’s increasingly diverse workforce. With Millennials, Gen Xers and Yers in the employment mix, many young people are either intimidated by older workers or are downright contemptuous. Older workers, in turn, often cannot comprehend their younger peers’ thinking and may be intimidated by their ease with technology.

Forming intergenerational teams can bring divergent employees together so that they can benefit from each others’ strengths, not just complain about their weaknesses. Utilizing younger workers who are good communicators and technologically proficient to train older workers in new technology can bridge two gaps—the generation gap and the technology gap. In turn, older workers can mentor younger employees and model appropriate and ethical behavior.

19. Consider the Total Cost of Jerks (TCJ) to the organization.

Verbal abuse, intimidation and bullying are widespread in the American work force.10 But some companies are taking notice. There is a growing trend in companies to consider the TCJ impact on the work force, including several organizations on Fortune’s “100 Best Places to Work.”

Robert Sutton, Ph.D., professor of management science and sngineering in the Stanford Engineering School, views “jerks” in a much more explicit light. Sutton wrote The No Asshole Rule, a business bestseller that provides steps organizations can take to quantify the cost of jerks and eliminate them.

He lists the “dirty dozen,” the top 12 actions taken by those who use organizational power against those with less power. “It just takes a few to ruin the entire organization,” Sutton writes.11

Older workers may have seen it all, but they don’t always have the patience to put up with twits. That jerk in the cubicle next to a long-term employee may be the final nudge that pushes a valued older worker out the door. Most employees who have options like retirement tolerate jerks for just so long, and then they clean out their desks.

Eliminating toxic employees can improve more than the organization’s internal structure, because if an employee treats coworkers badly, how is he treating your customers?

20. Make the most of the existing work force.

Studies have found that as much as 40% of the time spent handling a claim can be spent in administrative tasks that don’t affect the claim’s outcome significantly. It makes sense, then, to drive work down to its lowest possible level of the organization. Are adjusters still issuing checks, composing the same letters over and over and answering calls that could be delegated? According to employment consultant Peter Rousmaniere, some corporations are outsourcing their claims-support systems.  “[Outsourcing] offers the potential of injecting into the claims management process some very intelligent, well-educated people who are very motivated to perform functions [that], due to global information systems, they can do proficiently.”

21. Don’t overlook diversity.

Many employees are overlooked in the promotional process because they are of different nationalities, ethnicities or gender than the dominant makeup of an organization. Whites follow a different career path than their non-white counterparts, according to David A Thomas, author of an article on minority mentoring that appeared in the Harvard Business Review. Whites frequently get more attention from their managers and hence more opportunities.

Thomas’s research showed that the one common attribute people of color who rose to the tops of their organizations had was mentorship, but mentorship that went beyond what he termed “instructional.” They had mentors who provided a deeper relationship that increased their mentees’ confidence and did not shy away from frank discussions about race.12 If we fail in our organizations to see beyond employees’ gender, skin color or religious beliefs, we may overlook our brightest talent.

22. Address the problems of brain drain strategically.

To date, there is a great deal of discussion on brain drain in the insurance industry, but little empirical evidence to use to determine which methods might avoid this loss. Many insurance executives are talking about the problem in conferences and trade journals, but what are insurance companies doing to address it?

To create organizational change, an organization must start with a vision. What are the problems we face, and what are their consequences both short-term and long-term? Where will our work force needs and realities stand in five years?

Effective Organizational Change Begins with a Plan

Without a roadmap, even the savviest traveler occasionally gets lost. To address brain drain strategically, a company must develop a strong vision and a stronger plan. This plan can be implemented over time, but it must have clear goals and time frames to avoid becoming mired down in processes.

From top management to line supervisors, there must be a shared sense of urgency about this problem, because any critical initiative can go astray because of the competition that all organizations face in today’s highly competitive global market. To solve the coming talent crunch, organizations must commit the resources to tackle this problem strategically, while there is still time.

1 Wegner, Daniel, Paula Raymond, and Ralph Erber. “Transactive Memory in Close Relationships,” Journal of Personality and Social Psychology 61 (1991): 923––929.

2 Gladwell, M. (2000). The Tipping Point: How Little Things Can Make A Big Difference. New York: Little, Brown & Company.

 3 Ibid.

4 RiskList Users Group, June 23, 2007.

5 “Generational Talent Management for Insurers: Strategies to Attract and Engage Generation Y in the U.S. Insurance Industry,” Deloitte & Touche, 2007.

6 Private communication.

7 Marr, Bernard, and J.C. Spender. “Measuring Knowledge Assets – implications of the knowledge economy for performance measurement.” Measuring Business Excellence 8(2004): 18–27.

8 Private communication.

9 Private communication.

10 Lutgen-Sandvik, P., Tracy, S. J., & Alberts, J. K. (in-press). Burned by bullying in the American workplace: Prevalence, perception, degree, and impact. Journal of Management Studies.

11 Sutton, Robert. The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn't. 1st. New York: Warner Business Books, 2007, p. 180.

12 Thomas, David A. “The Truth About Mentoring Minorities: Race Matters.” Harvard Business Review April 2001.