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Workforce of the future

Creating the workforce of the future

Transforming an insurance company takes more than new technologies and new business processes. It also takes an entirely new approach to workforce planning and development.

Are insurers ready? Based on the data we collected for this year's CEO Outlook, I'm not entirely sure they are. The problem is that - while insurance CEOs seem to acknowledge their processes and capability requirements are changing - they also seem reluctant to start making any major changes to their workforce.

The bots are coming, AI is a slower burn

For years, experts have forecasted that robots would invade the workplace. And, now, the fact that automation will soon be embedded in processes across the insurance organization is undeniable. While the basic automation referred to as bots is more prevalent, it is clear that artificial intelligence (AI) is starting a slow steady move into the world of insurance. Our survey indicates that 12 percent of insurers have already started to implement AI in some of their processes and another 51 percent have started limited implementations around the organization. More than half also say they expect to start seeing significant ROI on their investments into AI within the next three years.

One would expect this massive rate of automation to have some very significant impacts on the workforce. For one, new skills and capabilities will be required. The CEOs in our survey were quick to note they would need more data scientists, more cyber security specialists and more digital transformation managers in particular.

Yet, at the same time, exactly half of our respondents admitted they probably wouldn't start thinking about hiring these new skills until they start to achieve certain growth targets. My concern here is two-fold: first is that they will not have the skills required to help them achieve their transformation goals; the second is that they may join the war for talent too late to score any significant wins.

What's the plan?

You would expect insurers to be rushing to use contingent workers to bridge the gap. But, according to our survey, the rush has not started yet. In fact, just 16 percent of insurers said they make widespread use of contingent workers; half said they make limited use of contingent workforce models.

Maybe they expect to re-task their current employees to take on new roles and responsibilities. If so, they face an uphill battle. Our survey suggests that 65 percent of CEOs think that AI and robotics will create more jobs than it eliminates over the next three years. Interestingly, Gartner projects that jobs gained will exceed jobs lost due to AI by 20201. Even if all employees are willing and able to retrain on new capabilities (which is highly unlikely), it will never be enough to meet the demands of the business.

Impact of AI on jobs

2017 hype cycle Gartner infographic

Looking at the leaders

In the end, the answer for most insurers will likely be a combination of multiple strategies. Automation will be applied everywhere; employees will be retrained where possible; contingent workers and partnerships will be used to fill gaps; new roles and ways of working will be developed.

Based on my work in the industry, here are five things that many of the leading insurers are getting right as they start to think about creating the optimal insurance workforce of the future:

  1. They are breaking down the siloes. The leading insurers recognize that their workforce needs to be aligned around the customer, not the business function. And that means finding ways to remove the traditional functional barriers and siloes.
  2. They are integrating their workforce plan into their transformation journey. Leading insurers develop their workforce plan alongside their transformation strategy, ensuring they have access to the right skills and capabilities at the right time in their transformation journey. 
  3. They are finding the right balance between growth and cost/disruption. They are carefully and deliberately adjusting their workforce and their capabilities to grow in line with the demands of the business (reflecting the growth/cost balance I raised in my first article in this series). 
  4. They are thinking about the workplace dynamics. Recognizing that the workplace of the future will also change, the leading insurers are now thinking about how they engage and motivate employees that may not work in an office… or may not even be human. 
  5. They are encouraging a culture of innovation. The leading insurers are proactively addressing employees' resistance to change and fears about automation by encouraging innovation and transformation across the enterprise.

Building the insurance company of the future will take more than slick new customer interfaces and automated processes. It will also require a very different set of skills, capabilities and resources. The big question is whether insurers will be ready in time both in the insurance industry and outside with new entrants it's not just about change, it is about the pace of change.

Footnote

12017 hype cycle for emerging technologies, Gartner, 2017.

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