Insurance offers an exciting, challenging and financially rewarding career. But unless bright graduates agree, the industry could rapidly face a recruitment crisis. Amanda Swinburn reports.
Ireland has shed its old image as an area with high unemployment, and has emerged as a Celtic Tiger in the EU, with an unrivalled growth rate of 11%. Even with the US economy cooling down, analysts predict that this period of hyper-growth will continue for the next three years, dropping only to around 8% by 2004.
These are exciting times for the insurance industry in Ireland, but with full employment has come another problem - a shortage of skilled labour. Unemployment is around 4%, down from 16% six years ago. Dublin has been outstandingly successful in positioning itself as an international financial centre. According to the International Development Agency of Ireland (IDA), the financial services sector is growing at almost 25% in employment terms per annum. For insurers and brokers, that means that they are competing directly with the possibly more glamorous offshore financial services industry.
The Irish labour market is now very much a supplier's market, with industries competing for employees in every area from IT to management.
The government estimates that by 2006, there will be 350,000 new jobs created in Ireland, with a 200,000 shortfall in employees. Insurers are now faced with a double dilemma - how to retain staff and how to attract new blood to the industry.
New graduate recruits are being targeted from Irish universities which now offer a number of highly-regarded courses in insurance. One of the best is at the University of Limerick, which carries an Associate of the Chartered Insurance Institute (ACII) accreditation from the Insurance Institute of Ireland, and insurers are lining up to snare graduates. Universities are providing a high-quality stream of potential candidates, says Adrian Bedford of Hays Interselection recruitment consultants in Dublin.
"Lots of graduates have done part-time insurance jobs, so they have some experience," he says. Dublin has youth on its side, with 41% of the population under 25 and 69% under 44.
However, the hardest groups to recruit are those with two to three years of experience, and those with IT skills.
A recent independent report by Personics Europe shows that two thirds of Irish businesses do not use the internet for recruitment, even though it can generate cost savings of 35%to 40%.
The report shows that over 70% of people recruited in IT are found via the internet and more insurers need to exploit this resource.
Looking outside the domestic market
Paul Carty of the Irish Brokers Association (IBA) says the only way for the insurance industry to stay ahead is to look at the rest of Europe and worldwide for new employees. "We have just been on a recruiting mission in South Africa," he says. "We were aiming to get 4,000 new recruits but ended up getting 20,000, as unemployment there is high."
The Irish market is also attracting many insurance professionals from the UK, as it is English-speaking and has attractive tax rates.
But insurers still have a long way to go in making a career in insurance seem exciting, says Carty. "We need to make employment more interesting, pay more, be ruthlessly efficient and re-engineer our processes, such as getting rid of the paper mountain and removing every process which is duplicated," he adds. People no longer accept wading through paper-based processes: "people are refusing to do paper-pushing jobs when there are better jobs out there."
Insurers are not only competing against each other but against other industries. And, as a result of the labour shortage, Carty believes that service levels are suffering. "We are in a boom but the infrastructure is creaking," he says.
The domestic job market
In addition to recruiting from outside Ireland, Carty is calling for insurers to look at attracting Irish employees back into the market.
"We need to bring in women with families who want to re-enter the job market, by providing crèches and offering flexi-time."
Carty also believes the Dublin market is overheated, with traffic problems and expensive housing and says firms need to look at expanding to other areas.
The housing market in Dublin is now almost equal to London in terms of house prices. Ireland's inflation is the highest in the EU - reaching a high of 7% in December last year.
But, as insurers' recruitment advertisements improve, so too does the flow of candidates, comments Bedford of Hays. "Some of our candidates are looking for a career change, some are older and have no experience but see the insurance market booming."
The most successful insurers at recruiting are those with attractive benefit packages, such as Hibernian, Allianz and Eagle Star.
Paul Cotter, director of Joslin Rowe Dublin, agrees: "Employers need to offer a competitive salary, personal development plans and invest in staff through the provision of training."
Looking to the future
The next few years will continue to be a struggle for insurers to recruit the people they need. But if companies adopt the mindset of their potential employees and look not just at salaries but at career opportunities, flexibility and attractive benefits, they will attract staff and retain them.
Focus on training
St Paul International Insurance based in Dublin is attempting to solve the problem of labour shortage by focusing on training. Fiona Duff, personnel manager says that using continual professional development is essential in attracting and retaining employees.
"We have a huge budget for training," she says. "Our employees can request to do any course they require." She adds that it is important to give people the flexibility to move between jobs if they wish. For example, one receptionist in the company recently decided to move to the PR department and is now doing a diploma.
Employees are encouraged to "cross-fertilise" by looking at other departments, in order to develop long-term career goals. A number of new employees are being tempted over to Ireland from the UK. "Dublin is attractive to young people as it is a dynamic city with a huge number of career opportunities," says Duff. However, she adds that there is a problem getting experienced people, as it is very expensive to recruit. "If we want someone with specified skills, we need to pay them a high salary."
For this reason, St Paul aims to train people from within the company wherever possible. Those who want to do ACII examinations will have their courses paid for by the company.
But Duff concedes that, in order to retain staff, insurers need to pay more. "Dublin is an employees' market and employees demand higher wages when there is so much competition from other companies," she says.
Insurers taking the initiative
Axa in Dublin is currently looking outside the EU to try to fill vacancies. The company has hired a recruitment consultancy which specialises in bringing in staff from around the world.
So far, new employees have been found in South Africa, and searches are taking place as far afield as the Far East.
While Axa has a high turnover of staff - 12-13% are lost every year, HR director Colm McGrattan says it still compares favourably with the rest of the Irish insurance market. "In better times, our turnover was 7%," he says. "But in the market at the present time, the average turnover is around 25%."
One of the major problems Axa suffers is a shortage of skilled technology professionals. In order to address the problem of labour shortage, Axa has undertaken a number of "outreach" programmes, in which representatives are sent to schools and colleges in order to encourage new recruits. The company is also promoting its enhanced benefits package. Staff who have left the company are being attracted back with a guarantee that those who perform well will receive a generous pay increase each July. "At present, it is almost exceptional not to get an increase in pay," says McGrattan.
He believes that key to retaining employees is having concrete career structures in place and making sure potential employees are aware of the opportunities to move up within the company. Axa offers employees the chance to progress from a call centre in a maximum of two years into any area of their choice, from claims to marketing.