By as early as 2025, as much as 75 percent of the global workforce could be millennials, and they will bring a whole new set of demands and expectations to the modern workplace. Importantly, they will also bring new digital skills and tech savviness that will be critical to transforming business.
Coming to terms with millennial employees will be one of the great business challenges in the next five years. This is the conclusion reached in the AGCS Trend Compass 2019, a report that identifies the most important technological, business and socio-economic developments of the future.
This is the first generation to have grown up in the digital era, which means they have the digital, solution-oriented, socially active skills considered essential for future business success. For companies, nothing is more important for survival than recruiting and retaining the next wave of talent. It will become an existential challenge to create environments that this generation not only wants to work at but to stay at for a number of years.
The Shrinking Workforce
Many economies have already reached a tipping point with more employees retiring from the labor market than entering. This trend toward an aging workforce is only partially offset by the inflow of millennials. A “war for talent” is emerging, defined by fierce competition to attract new employees with digital competencies in artificial intelligence, data science or “frontier risk management,” such as managing cyber or reputational risk, as most of these jobs did not exist 10 years ago. The AGCS Trend Compass 2019 assesses 25 trends, such as digital platforms, green mobility and machine learning, with the challenge of the millennial workforce identified as one of the socio-economic trends to have immediate impact on companies within the next two to five years.
The millennial workforce was assessed overwhelmingly to have a very high impact on the insurance industry and our clients’ businesses. Companies are already feeling the pinch, but the impact will be fully felt within the next few years and presents a significant risk for future competitiveness. The failure to attract and retain young talent is one of today’s top risks for organizations.
Work, Life and Satisfaction
So, what do millennials want? A 2017 study by Allianz of over 5,000 millennials in five countries, “Millennials: Work, Life and Satisfaction,” revealed that, when asked, the majority showed a longing for more traditional career paths. When it comes to work, they value security and stability over change and flexibility. Only a small minority (about 15 percent) of those surveyed job-hop out of preference. Clearly, millennials have different career aspirations than those often portrayed.
When it comes to what millennials value most in their careers, you can count on a few things, according to Vertafore, an insurance software provider. In “Millennials in Insurance,” a recent white paper, Vertafore described millennials as prizing a work-life balance and wanting a job that provides them with a healthy compensation and allows them to travel and enjoy different experiences. They also want to feel like they’re contributing to their community and to be able to grow in their careers.
Attracting Talent With Agility
The future of insurance depends on millennial employees. Traditional methods of recruitment, retention and up-skilling will need to be overhauled as part of creating a culture that will attract talent. The mindset of recruitment managers also needs to change so that we are not just hiring for like-to-like roles but to build a workforce with the ability to successfully adapt the business in an age of disruption.
Social media recruitment is only part of creating a workplace that will attract and retain millennials. Culture is key. Research shows millennials have a preference for agile environments that respond quickly to changes rather than having a strict process or procedure. This also means limited formalities and a greater sense of autonomy and flexibility in almost every respect, from working conditions and scheduling to work-life balance and remote working opportunities.
Many millennials are likely to leave a company within the next two years if they are unhappy with their development. Offering learning opportunities and mentoring in an agile culture with low levels of hierarchies, where trial-and-error and open communication is encouraged, could prove to be a winning formula to attracting and retaining millennial talent.
Millennials are already disrupting insurance both as employees and as consumers. Millennials don’t want their parents’ insurance policies, and many legacy products are being challenged by their lifestyle.
Insurance is often bought online rather than through agents. Because they tend to rent, they don’t buy home insurance. Only a quarter are married, and if they do marry at all it is at a far later age, so it far harder to sell them life insurance.
Insurers need to change by creating new products that match the interests of millennials that are based on per use and are far more flexible and available for far shorter periods.
Insurers need to further develop and up-skill their staff for the digital era. However, a large part of the solution will be solved by the talent that is recruited. They will be the ones with the insights, the innovative thinking and, above all, the digital skills that will transform insurance and risk management to ensure it remains relevant for the future.