CHICAGO—Finding, retaining and developing talented employees is one of the most significant challenges facing many insurance and financial services companies in the years ahead, with generational issues adding complications for companies to address.

Speaking last month at the Finance & Insurance Workforce summit presented by the Workforce Boards of Metropolitan Chicago, Andrew Liakopoulos, senior manager in the human capital group of Deloitte Consulting L.L.P., suggested that companies must take a "generational talent management approach" in looking to attract and retain talent.

Such an approach is particularly necessary as companies look to deal with issues associated with workers in Generation Y, the under-25s entering the workforce.

Mr. Liakopoulos said a talent management approach involves considering an integrated set of resources, processes and values designed to attract and retain the talent needed to drive business priorities.

With that in mind, companies need to consider, "How do you engage Gen Y in your talent strategies going forward," he said.

Among generational issues confronting insurance industry businesses and others is the fact that Baby Boomers soon will begin retiring.

"In two years, the first of the Baby Boomers will start retiring," Mr. Liakopoulos said. Meanwhile, there is an insufficient number of young professionals in the workplace, as Generation X—the generation between the Baby Boomers and Gen Y—is smaller in numbers than either the Baby Boomers or Gen Y.

"We are increasingly concerned with our own vulnerability as, over the next 10 years, we stand to lose half of our senior leaders due to retirement," said another speaker, Leana Flowers, executive vp and director of retail and human resource strategies at Chicago-based ShoreBank Corp.

"It's going to be similar to the way it was in the dot-com era, when there just weren't enough people to take all the positions," Mr. Liakopoulos said. "And simply throwing money at the problem won't work."

Companies looking to lure Gen Y workers to fill those talent gaps will face some particular challenges, however. Among them are negative publicity and perception associated with financial services firms in many Gen Y workers' minds, including a perception that some financial services sectors aren't exciting or leading edge, and highly publicized corporate scandals that run counter to a sense of social responsibility that is a strong characteristic of Generation Y, the Deloitte consultant said.

In addition, after many Gen Y children watched their Baby Boomer parents work long hours only to be downsized, many lack the same sense of employer loyalty typically displayed by workers in their parents' generation.

The key for employers looking to attract and retain Gen Y workers is to recognize the needs that characterize the generation, Mr. Liakopoulos said, such as a desire for career development and multiple experiences, a sense of purpose in their work, open social networks embracing honest communications, work/life flexibility and a tech-savvy work environment.

"Gen Y, when they enter the workforce, they don't want to be shown their cubicle and be told, 'Alright, you're going to be in this position for the next five to 10 years,"' Mr. Liakopoulos said.

"You really have to think of this generation as having grown up with the computer," he said. "This generation likes to do everything on the Internet." And, Mr. Liakopoulos advised employers, "They want to work for an organization that—when they have major life changes—that organization will adapt to those changes."

Another speaker at the summit, Joseph Carbone, president and chief executive officer of WorkPlace Inc. in Bridgeport, Conn., said there already are signs that some companies are recognizing those generational differences.

"You're no longer sitting in a cubicle, you're working as part of a team, you are interacting with people. There are TV programs, there's music, there are Starbucks everywhere," Mr. Carbone said. "Companies are already beginning to transition into the new culture to be attractive to the workforce and it's nothing compared to what you're going to see in a few years. Nothing."

Generation Y workers are often less motivated by money and more by the conditions of the company and the workplace, Mr. Carbone said, along with the opportunity to shape their professional experiences and their free time.

Companies' efforts to attract the incoming workforce will be "a case study for marketing that economists are going to look at for the next 20 years," he said. "Those that get it right are going to win it."