3 Ways Improved Technology Solutions Can Help Solve Risk Management’s Talent Crisis
Over the past two years, the labor market has shifted dramatically.
In 2021 and 2022, employers struggled with the Great Resignation. At the beginning of last year, 44% of workers were actively seeking new jobs, CNBC reported. Workers left to seek jobs with higher pay, better benefits, or more remote-friendly working policies.
Yet as we enter 2023, the tide seems to be shifting. Amazon, Microsoft, IBM, and Google are just a few of the companies that have announced layoffs this year. Other companies may follow as inflation continues to creep upward and economic uncertainty rises.
In today’s shifting labor market, employees may look for job opportunities that offer stability and promising career trajectories. This represents a significant opportunity for the risk management industry.
A wave of retirements coupled with a lack of young people studying risk management has left the industry unable to fill positions prior to these shifts. Forty-three percent of risk and insurance industry participants said they faced challenges finding skilled candidates, per Deloitte’s 2022 Insurance Industry Outlook survey.
The risk management industry is competing not only with industry peers in the financial services sector but also with tech companies who are scooping up young, digitally-skilled workers. The report went so far as to call the talent crisis the “biggest challenge” the risk industry faced last year.
One of the reasons risk management has struggled to bring in new professionals is the fact that many in the industry rely on outdated technologies. Policy data and information that could be stored digitally with dedicated software are kept as hard copies in filing cabinets or manually logged in clunky spreadsheets.
Fortunately, new digital tools are stepping in to help the risk management and insurance industry compete for new talent. Workers of all ages — but particularly millennials and Generation Z — appreciate the ways in which digital tools save time and allow them to focus on the creative parts of their jobs. Additionally, increased efficiencies created by automation can help talent-poor risk teams manage their workloads and feel less of a strain from the current crisis.
1. Younger Workers Expect Technological Sophistication
First and foremost, risk management’s hesitancy in adopting new technologies has posed a challenge when it comes to attracting younger workers.
Millennials and Generation Z are digital natives, using computers and surfing social media since childhood. Individuals from both of these generations are typically drawn to the booming tech industry once they graduate college. Bulky spreadsheets and manual keying won’t cut it; they are tech-savvy and expect their employers to be too. You need tech tools that make day-to-day tasks more efficient and also natural to workers who grew up using iPhones.
Surveys routinely show that technology in the workplace is important to younger workers. Eighty percent of Generation Z expressed a desire to work with cutting-edge technology, and 91% said a company’s technological capabilities would influence their decision to accept a job offer, a survey from Dell found.
Yet, despite a crucial need to attract younger workers, risk professionals continue to use legacy applications and systems. Updating your company’s digital tools can help younger workers feel more comfortable on the job and help businesses searching for talent take advantage of recent layoffs in the technology sector.
2. Create Efficiency and Automate Tasks
Digital resources can help risk professionals manage the talent crisis by streamlining day-to-day duties and automating repetitive tasks that used to be done manually. Tech tools that reduce the amount of manual keying a risk professional has to do each day help smaller teams accomplish more.
Risk teams that may be struggling to recruit new employees can ease some of the strain through automation. One 2020 McKinsey report found that 10 to 55% of risk and insurance operations could be automated.
Software that can quickly extract claims and policy data and manage routine keystroke tasks, like those involved in policy onboarding and claims processing, can increase efficiency.
Over the last few years, the COVID-19 pandemic, cybersecurity threats, and geopolitical instability have revealed just how important it is for businesses to develop innovative solutions to prepare for the unexpected.
And it cuts down on claims costs, too. Another McKinsey report, this one from 2017, found that automation could reduce the cost of a single claim for risk professionals by as much as 30%.
3. Help Risk Managers Focus on the Exciting Part of Their Job
Digital technologies and automation allows risk managers to focus on the exciting parts of their job: understanding and minimizing the exposures their company faces. The extra time will enable them to develop more creative solutions for their company’s exposures.
Software solutions that collect policy data can help risk professionals visualize areas where they’ve had repetitive losses. Then, they can work to develop targeted solutions to help reduce the number of claims in those areas.
These new innovations can help show prospective talent how exciting it is to work in risk management. Instead of sitting behind a computer, wrestling with a disorganized spreadsheet, risk teams can create incident response plans or develop solutions to challenging or emerging exposures.
Technology speeds up the pace of day-to-day operations, showing workers what a dynamic and fast-paced career risk management can be. On the whole, the insurance industry has a reputation for being a bit boring, but new innovations are helping show what a fulfilling, inventive job working with risk can be.
The talent crisis may continue to be a challenge for risk professionals for the next few years, but new technologies are here to reduce the strain. Better technology systems can help risk teams attract younger professionals, and they can increase efficiency, resulting in overall cost savings. At the end of the day, these tools help risk professionals think creatively and can improve the industry’s reputation.
