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An aging workforce presents strategic risks for companies across various industries and disciplines — including insurance and risk management — as a wave of retiring baby boomers threatens to leave employers facing a “knowledge gap.”
To address the issue, companies are going to have to find ways to keep older workers in place in ways that allow them to mentor younger, less-skilled workers and transfer knowledge to them, while also competing for those younger workers and giving them the skills to learn quickly.
Ron Davis, executive vice president, head of market customers at Zurich Global Corporate in North America in New York and president of the Spencer Educational Foundation Inc., said companies need to be aware of that potential loss of experience and how they're going to replace it.
“This is a challenge that any company has,” Mr. Davis said. “You're not going to be able to bring in and replace somebody who has 40 years experience.”
The issue is one that's strategic, not tactical, said Scott H. Steinmetz, assistant vice president of risk services and solutions with Fireman's Fund Insurance Co., Novato, California, and has to be addressed at a high level. “This isn't something you just push down to lower-level people as an assignment,” he said.
“You need to be strategic about how to keep (older workers) engaged and valued,” Mr. Steinmetz said. “You're not just adapting the physical environment to them. You're employing them differently.”
Companies need to invite the older workers to consider tapping their career experience to include becoming a master and teacher as part of their role, Mr. Steinmetz said, and invite them to leave a legacy.
Businesses also should acknowledge that there are some people who will need to work longer before retiring and make the arrangement an efficient exchange for both sides, he said.
Michaela Grimm, senior economist at Allianz Group Economic Research and Corporate Development at Allianz S.E. in Munich, said the issue is even more acute in Europe, where the labor force is both aging and shrinking as birth rates decline.
“Nowadays some companies compete even for older, experienced workers,” she said, with competition for educated, well-qualified immigrants increasing, too.
Many older workers want to have flexible work hours, she said, adding, “We think there's an increasing need to make paid or unpaid leaves available.”
“It's not only flexibility in the workweek itself,” Mr. Steinmetz said. “Part of it is about creating a bridge” between a full-time career and the true end of an older employee's career in order to retain services of the people who have knowledge about loss control or highly protected risk engineering, for example, until that knowledge can be adequately transferred to a new generation, he said.
Mr. Steinmetz said he's seen some clients such as some Fireman's Fund leaders looking to create flexibility to use people more strategically in knowledge transfer, skill development and career development.
“There are tools and resources out there,” Mr. Steinmetz said.
He said his team also has had some success working with a large hospitality company that has utilized the AARP Workforce Assessment Tool, “which really is a valuable resource.”
The tool can help companies assess the effect of retiring workers, address skill shortages that might result and manage multigenerational workforces.
Mr. Davis said that the Spencer Educational Foundation Inc. has several programs aimed at bringing talent into the insurance and risk management industry, as well as tapping experienced risk managers to help with that knowledge transfer such as the Risk Manager in Residence program. That program enables experienced risk managers to teach and mentor students in college insurance and risk management programs.
The Risk Manager in Residence program has been in place for nearly 20 years, and so far this year the Spencer Foundation has awarded grants for the program at 20 colleges including Ball State University, Illinois State University, Florida State University, Temple University, Troy University and California State University, Fullerton.
“One part of it is attracting the right people,” Mr. Davis said. “But the other part of it is you have an aging workforce, a lot of knowledge and experience that is gone.”
In addition to looking to attract and develop young workers, the insurance industry also can look to experienced workers in other industries who have applicable skills to insurance and risk management, Mr. Davis said.
“That allows us to also talk about the ability to fill some of those gaps that might exist for a company,” he said
Who students, recent graduates and other job candidates know can be just as — sometimes more — important than what they know when it comes to landing a job in the well-connected insurance industry.