Beating the brain drain

Vol: 43 Issue: 3 | Oct 2020

As the population ages, many in the insurance profession are concerned about the risk of ‘brain drain’ or the loss of organisational knowledge and relationships as older workers retire. 

In fact, according to ANZIIF’s Aging Workforce Study, nearly 80 per cent of organisations expect to lose valuable skills and knowledge — yet only 11 per cent have made any attempt to plan for those losses. 

‘It’s a real concern for the industry that so few respondents have a plan for retaining older talent or capturing their expertise,’ says Rebecca Slingo, ANZIIF’s general manager, learning. 

‘Insurance professionals are valued for the quality of their decision-making, which is based on years of experience working in grey areas. It’s not something you can learn overnight. People need opportunities to develop and grow their skills through both formal and informal learning experiences.’

The danger of skills loss is most evident in certain specialist areas. 

‘Some do tend towards longer tenure, including risk surveyors, loss adjustors and underwriters,’ says Catherine Dixon, executive general manager, people experience, at Suncorp New Zealand.

‘A number of employees in these areas with extensive institutional knowledge are nearing national superannuation age.

‘We have to work carefully on succession planning and talent acquisition strategies to make sure we are identifying, developing and retaining employees who can fill those specialist disciplines.’

THE ISSUE OF LEADERSHIP

Leadership is also under threat. Deloitte’s Human Capital Trends in the Insurance Industry report found that insurance sector executives consistently rate leadership as a top human capital concern.

‘Given the many factors contributing to a volatile landscape in the insurance sector — including regulatory uncertainty, an increasingly challenging cyber environment and evolving customer needs — having effective leaders who can provide strategic clarity is crucial,’ the report states.

‘This conclusion is reinforced by a 2015 survey conducted by Deloitte, where 87 per cent of insurance respondents agree that leadership is an “important” or “very important” issue. 

Yet, only 33 per cent believe their leadership pipelines are “ready” or “very ready” to lead and respond to these business challenges. This gap can impact insurers’ ability to navigate through challenges and it may affect the bottom line.’

WHY IS AN AGING WORKFORCE A PROBLEM?

Australians are staying in the workforce for longer across all industries. 

The latest edition of the federal government’s Older Australia at a Glance report revealed that, in January 2018, Australians aged 65 accounted for 13 per cent of the workforce compared with 8 per cent in 2006.

And Australians’ changing attitudes to retirement suggest this trend is likely to continue. 

Over the 12 years to 2016-17, the number of Australians aged 45 and over planning to stay at work until they were 70 rose from 8 to 20 per cent. It’s a similar story in New Zealand, where one in five people aged 65 and over are still working. 

The government predicts this figure will climb to one in three by 2031.

FILLING THE SKILLS GAP

Clearly, retaining older workers could help to fill a growing skills gap. They could also help insurers stay relevant for an aging customer base.

Yet some face discrimination from younger employees who assume mature age workers lack skills in technology or that the older generation is impeding the career development of younger counterparts.

ANZIIF’s Aging Workforce Study found this concern was more pronounced in China and South-East Asia, though companies such as Prudential Corporation Asia are working to change this thinking.

‘In 2018, we were the first financial institution in Singapore to remove the official retirement age for our workforce,’ says a Prudential Corporation Asia spokesperson. 

‘We are also helping our workforce stay competitive and relevant so they can enjoy extended careers by encouraging them to upskill with courses in artificial intelligence, innovation and entrepreneurship.’

REVERSE MENTORING

In Malaysia, Prudential’s reverse mentoring program enables younger employees to coach their senior colleagues in areas such as social media.

‘We hope this will enhance workplace diversity and encourage innovative thinking as it promotes collaboration among all generations of our employees,’ the spokesperson adds.

Prudential has also been developing a future-ready workforce and encouraging employees of all ages to embrace a digital mindset. 

As a result, they were well prepared to meet the challenges of COVID-19. At the height of community quarantines and lockdowns, as many as 11,800 Prudential employees across Asia were working from home.

RECRUITMENT AND RETENTION 

Suncorp New Zealand runs a number of initiatives to attract and retain mature age workers.

‘We are using targeted recruitment for different generations to attract people across a wide range of ages,’ says Dixon. ‘In terms of retention, we have a huge focus on flexible working. 

'This lends itself well to mature age workers who want to work a few hours from home or periodically in a progression towards retirement.

‘We also invest heavily in reskilling all of our employees and helping them to proactively manage their career, wellbeing and financial security irrespective of age. As a result, our workforce is currently 16.8 per cent mature age workers — well above our target of 13 per cent.’

OLDER WORKERS ARE VITAL

Franz Josef Hahn, chief executive officer of Hong Kong-based reinsurance specialist Peak Re, says experienced workers are vital to nurturing young talent in the industry.

‘Our internship program is an important initiative that we see as impacting our talent pipeline and providing valuable experience to the younger generation, as well as promoting our industry,’ he says.

‘Every year, we provide training opportunities, both internal and external, to our employees, especially high-potentials and senior managers.’

‘We have found the experienced ones are often the educators and the younger ones are the innovators.’