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Industry battles 'talent drought' and spiralling wages

Insurance brokers are facing a serious shortage of talent as a result of the ongoing impact of covid-related border closures and heightened wage expectations.

Industry leaders report that vacancies are harder than ever to fill and that the short market, along with the current well-publicised level of inflation, is encouraging some staff to chase better paid roles.

The issue extends to the broader insurance sector, and other sectors too, but Steadfast MD Robert Kelly told it’s causing issues for brokers.

“There is a talent drought within the industry, there are more jobs than people to fill them,” he said.

“There’s a lack of immigration bringing the usual cohort out of the London market to work in Australia.

“It creates disruption, and sometimes people who aren’t up to the job are being employed just to get bums on seats.

“The staff placement agencies are having a ball at the moment, ringing people up asking if they are happy with their wages and saying they can get them more.”

Mr Kelly says Steadfast mitigates the problem by “always trying to meet the market rate on our people”.

“There’s a realignment taking place in the market and when you’re looking at FY23 budgets, you need to take a close look at pay rates.”

Marsh Australia’s Talent Acquisition Leader Ben Whitfield tells the current employment market is “perhaps the tightest we have ever seen or experienced”.

“Australia’s unemployment rate has remained at 4% in recent times with the predication that this rate is likely to fall even lower throughout 2022 and 2023,” he says.

“This, coupled with record job ad numbers, and a negative net migration trend has meant there is less talent available to fill the record job vacancies on offer.

“Whilst the increase in overall job advertisements is good news for job seekers or those considering a new role or career change, it places a significant strain on organisations looking to attract talent.”

Insurance-focused recruitment agency Fuse warns that there’s unlikely to be any change for the next 12-18 months.

“Insurance has always been a tight candidate market and covid has exacerbated that,” Head of Strategy Cameron Watson said.

“We’ve seen a huge amount of counter-offers in the last eight months – employers know how hard it is to find people so they’ve had to look at retention.”

Mr Watson says some wages have gone up as much as 25%, with low to mid-level roles particularly impacted. Some positions that were traditionally paid $75,000 are now attracting $90,000 or more.

But he says the situation creates an opportunity to get new talent into the market.

“There’s an increasing awareness of graduates as an alternative talent source,” he says. “The talent is out there, it’s just harder to find.”

WTW Head of Australasia Simon Weaver says a recent global survey shows 70% of organisations are having trouble attracting employees, with a particular battle around digital talent.

Mr Weaver says WTW locally has retained talent effectively, but “finding people with knowledge and experience of niche lines of insurance, a growth area for our business, remains a challenge”.

“Border closures haven’t helped; we have always tried to ensure our talent is agile and we’ve had a long history of people moving across the globe with ease to support key aspects of what we offer clients and develop our local talent,” he said.

“We’ve used technology to overcome this during the pandemic, quite successfully.”

Aon says “the great resignation” has not eventuated at its Australian business, but many organisations are facing new challenges in attracting and retaining staff.

“Many factors have influenced what colleagues want from employers and how employers are addressing those needs, including remote working, which is arguably the single largest disruptor of the workforce,” Lead People Partner Australia & Deputy CPO APAC Jane Mackney says.

“At Aon, in addition to our benefits program we are committed to flexible working for our colleagues.”

Insurance Advisernet MD Shaun Standfield tells it’s “very difficult” to fill vacancies at the moment.

“It’s taking longer to find candidates and secure them for roles we have available,” he said.

But he says there are “many facets” to staff retention.

“If the culture is right and you have team that works well together, along with an open communication environment I believe you can retain your best team members.

“Also, many team members have had and continue to have more flexible working conditions that deliver win/win outcomes for both the business and the team member.”

CBN CEO Richard Crawford says insurance companies have always competed for talent, but the “smaller talent pool” is highlighting the importance of retention.

“Whilst we can see signs of a great resignation, we like to consider this a great opportunity to attract new talent that aligns with the evolving needs of the business, reconsider the ways we work and the ways we organise ourselves,” he said.

Mr Crawford says CBN has made some changes to the way it recruits.

“While in years past we had a three-tier interviewing process, we have changed our interviewing to one to two rounds, with the contract usually issued within days of the interview – some even the same day where candidates are successful.

“When it is the right person, these days you can’t move fast enough to snap them up.”

He says that it’s now unusual for staff to stay at the same company for a lifetime, as they may have done in the past.

“At CBN, we are committed to bringing together a diverse group of passionate and talented team members, providing first class, career, health and wellbeing outcomes during their time at CBN.

“We do this by: growing and developing leaders; enabling our people to live the CBN values and convey our purpose in our communities; building adaptability and agility to respond to the changing world; offering an experience with employee benefits that sets CBN a class above our ‘people’ competitors; and offering flexible working conditions.”