As insurers begin to reopen physical offices and adapt to the post-pandemic workplace, strong leadership and fluid strategies are key components for successfully moving forward. However, the industry’s talent landscape remains competitive, especially in terms of attracting and retaining those at the executive level. We’re seeing increased movement in the leadership ranks, as professionals who were delaying career moves due to the uncertainty of COVID-19 are exploring their options and evaluating their long-term career plans. Organizations must remain future-focused, build loyalty among leaders and their successors, and approach executive compensation through a new lens.
Growing Competition for Talent
Industry unemployment has reached pre-pandemic lows and insurers are competing for talent both inside and outside the industry. The Wall Street Journal reports executive pay increased in 2020 (in an analysis of the 300 largest U.S. public companies) despite the pandemic, largely due to equity awards and cash bonuses. Even within smaller organizations, executive pay increases are less than what individuals would receive if they took on a role with a new company.
Insurtechs and other startups are vying for the experience and knowledge of seasoned insurance leaders and making substantial investments in the human capital that will build their organizations. While there’s risk associated with joining a startup, it’s often outweighed by the unique experience and substantial amount of equity these companies have to offer. Consider how your executive compensation package compares not just to other carriers, but to adjacent industries, and determine how you can adjust base salaries and incentives to be most appealing.
Comprehensive Succession Plans
Succession planning has been an industry focus for many years, due to the aging workforce, expanding mid-level talent gap and emphasis on leadership diversity. While many companies are developing succession plans for their CEOs and other key members of the c-suite, subsequent tiers of leadership must also be prioritized. High performers in the mid-level leadership ranks are primed to continue moving up within their organizations, eventually becoming trusted and effective executives with a wealth of historical knowledge and experience. Including them in succession planning and compensating them accordingly will help ensure a strong bench of talent is ready to take on both planned and unforeseen future needs.
Clear Development Opportunities
In addition to a broad and deep succession plan, ensure individuals both within and nearing the leadership ranks understand their value and long-term role within the organization. Work with them to build development plans that outline how they will progress to the next level, while providing necessary support and guidance. This could include executive coaching, assistance with executive MBA programs and structured mentorships with company leaders, among other tactics. Additionally, encourage open dialogue to better understand what would compel them to accept a position with another organization and how you can best meet any unfulfilled needs.
Ensure you’re giving individuals a reason to stay, leveraging both annual and long-term incentives. Design your incentive programs to serve as a performance reward and motivation tool. Seek feedback from your organization’s leaders to understand the perquisites they value and how you can continue to evolve your executive compensation program to be most relevant. By developing goals that support long-term and annual incentives, prioritizing talent management and embracing creativity, even smaller organizations can build compensation packages that are competitive across multiple industries.
The professional world’s shift to fully remote work will undoubtedly have a lasting impact on expectations around where and how work is completed. While most organizations will offer increased flexibility for employees, consider how you can create additional space for executives to recharge and find the balance necessary for peak performance. This could be in the form of unlimited PTO, sabbaticals to pursue other interests or the ability to work from another geographic location for extended periods of time.
Of course, physically going back to the office will not mean returning to the pre-pandemic work environment. Most employees have experienced fundamental shifts in priorities and values, both from professional and personal standpoints. New technology, enhanced automation and increased transparency are disrupting all industries. Encourage new ideas and processes within your own organization and evaluate the relevance of your total rewards program and compensation structure. Aim to disrupt yourself and lean into these changes proactively, before someone or something disrupts you.
As the industry adapts to a new working environment and faces new challenges, retaining effective and agile organizational leaders is crucial. Competitive compensation programs, strong talent development and retention strategies, and enhanced succession plans are vital for staying ahead now and into the future.