Insurance industry needs young blood

A clear strategy, diversity and business innovation are some of the most important components of an attractive work environment.

Jeff Hughes of GAMA International, who’s based in Virginia, suggested those key strategies for developing the next generation of leaders at the 2011 Distributors’ Summit.

“Learning what each group wants out of their workplace can help veteran leaders determine how to meet their needs,” he said. “Generation X might be looking for opportunities to show their individual talents [while] Generation Y may be looking for opportunities to show their team-based talents.”

Willingness and ability to manage sociological and business objectives simultaneously are what will define successful leadership in the future, he added.

That future is teams. Change is inevitable, and for this industry to survive, awareness of an evolving world is of utmost importance. The old boys’ club must now cater to a variety of ages, genders and races to accommodate immediate and sustainable growth.

“Generations X and Y must be trained and recruited to fill the positions, but we have to consider first what they are looking for. The horse that got us here is not the same horse that is going to get us there.”

The number of insurance companies in the U.S. and Canada recruiting inexperienced advisors has sharply declined over the last few decades. These are the challenges of impending retirement of our industry, said Hughes.

“With change comes opportunity. To understand how to appeal to the younger generations, we need to make some politically correct generalizations,” he said.

Compare and contrast

Boomers are workaholics, they don’t want to retire, are loyal to the organization they serve, embrace teamwork and are motivated by money.

On the other hand, Gen X (those born between 1964 and 1980) is individually focused; works to maintain a specific lifestyle; is generally mistrustful; and is motivated by security.

“They have been in the workforce for a while now and are ready to transition into leadership positions,” said Hughes. “But it’s our responsibility to mentor and grow them into those roles.”

So what will attract and retain this relatively small generational group? For starters, offer them the chance to prove their mettle. “We’ve got to provide opportunity for them to strike out on their own, offer clear communication of our expectations,” he said.

“A corporate identity and a company’s ability to build trust are central to them; they value the team, but also individual contribution to the team.”

Trouble is, Gen Xers feel they’re being overlooked, wedged between “workaholics” (boomers) and “entitled brats” (Gen Yers).

“These [so-called] entitled brats are our future advisors and ultimately are future leaders of our industry,” he said.

“They are interested in making a positive contribution to society, are most diverse, they embrace teamwork and require flexibility.”

The people in this group are not afraid to share their opinion and are much more comfortable with diversity.

The insurance industry lacks appeal to Gen Y, asserted Hughes. The recent economic downturn cast the entire industry in a poor light. Yet Hughes argues the industry has three benefits that will attract Gen Yers: compensation, control and contribution.

“There is no cap on commission [in the insurance business], so the sky is the limit for sales personalities,” he said. “They have full control over their success and failure, which appeals to both Generations Y and X.”

If the insurance industry emphasizes the social responsibility aspect of life insurance and other financial services, it would most definitely aid in recruiting a younger demographic by giving them a sense of purpose, he added. Technology is another aspect that the industry can no longer hide from.

“Get used to it,” said Hughes. “Gen X and Gen Y have grown up on technology; they value flexibility and that is what technology gives these individuals.”

If insurance companies offer digital mentoring programs and if senior management becomes technologically aware, the younger generation will become familiar with the organization and feel valued by higher-ups.

“Don’t forget: customers are becoming savvy and leveraging technology is the sweet spot.”

In the end, Hughes said, a firm’s strategy for growing its distribution management and developing effective succession planning will determine if it will succeed in adapting to a changing landscape.