How to Build A Great Insurance IT Workforce

Insurance & Technology, May 9, 2014 | Kathy Burger

CIOs from USAA, Unum and other insurance organizations shared secrets to attracting and retaining IT talent during a panel at the 2014 ACORD LOMA Insurance Systems Forum.

Although technology is changing at a mind-boggling pace, some of the toughest challenges facing insurance company tech executives have nothing to do with systems and tools. Rather, it’s the changing demographics of the IT workforce, along with intensified competition for talent with skills in hot areas such as analytics, mobile and agile development, that is simultaneously frustrating and inspiring today’s insurance CIOs. That was a dominant theme of the C-Suite Panel Discussion that took place at the just-concluded 2014 ACORD LOMA Insurance Systems Forum in Orlando.

Moderated by Dan Roberts, president & CEO, Ouellette & Associates Consulting, the panel covered everything from outsourcing to mobility to customer engagement. But the discussion kept circling back to the importance of developing and retaining a versatile, talented and committed IT workforce. The panel of current and former insurance tech bosses concurred that, while these issues can be vexing, addressing them effectively is critical to success in today’s increasing customer-focused, digital financial services environment.

“I always thought the job would be easier if it weren’t for people,” kidded panelist Allan Hackney, a long-time financial services executive who most recently served as SVP and CIO, John Hancock Financial. Getting serious, he noted, “At the end of the day we ride on the shoulders of really great teams — they do all the work.” Having worked in mergers and acquisitions, finance, operations and IT, Hackney observed, “At the end of the day it was always about the ability to deliver tangible results.”

One organization that seems to have found the right formula for leading a skilled, productive and happy IT workforce is USAA, although panelist Greg Schwartz, SVP and CIO, said, “I wish I could tell you there’s a blueprint.” Part of the culture at USAA, which consistently racks up awards for being a good place to work in IT, is recognition that “it’s absolutely critical to be focused on that as part of your IT strategy, not just architecture or platforms,” Schwartz said. Furthermore, when it comes to recruiting for IT positions, “People want meaningful work. We are selling careers, not jobs. We tell you, if you’re right out of college, that we want you here all your career. The good news is, the IT field is growing, so we can do that.”

Panelist Katherine M. Miller, SVP and CIO of Unum, concurred. “People want challenging work,” she said. The challenge, she added, is, “How do you empower the workforce?”

This is particularly urgent considering the looming retirement of many baby boomers and even Gen X’ers from the IT workforce. Miller warned against any “neglect of the incoming pipeline of skills and expertise” and said she is very focused addressing the capabilities and expectations of the Millennials to “make sure we have the right pipeline of talent coming in the door. We’re being prepared for the shift of skills, as well.”

The implications of the demographic shift “is one of my favorite topics,” USAA’s Schwartz said. CIOs should know what percentage of their staffs are likely to be retiring in the near future — a number that “is going up every year,” according to Schwartz. “We’ve been looking at this problem for long time. One of every two open jobs we fill with college student rather than an experienced [IT professional]. One-third of my workforce is millennials. We really have five generations in the workforce today, and they have to coexist. You do not want to wake up on other side of 30% of your staff retiring.”

The multi-generational character of today’s IT workforce can be tricky to manage but also creates some interesting growth opportunities, the panelists agreed. Referring to millennial employees, Hackney noted, “The people who work with them and supervise them have to change. They have to find ways to work together and communicate.” It’s also important to make sure that older professionals don’t get locked into one role — something that often occurs because their skills and expertise are so valuable in a specific capacity. “Make sure that the folks who are retirement risk or nearing it are not getting stuck in a job,” he warned. “A lot of these folks have enormous institutional knowledge, they get pigeonholed and stale. Move these people around the organization and give them opportunities to continue to grow and learn. It’s hard to let go [of that expertise], but when you do you find you have a stronger workforce.”

It’s A Small World
But that doesn’t preclude the need to find and cultivate the next generation of IT workers, Hackney emphasized. “If in your companies you don’t have internship programs focused on colleges, universities, even high schools, I can promise you’ll fall behind,” he said. This is further complicated by the increasingly dispersed (often globally) nature of the insurance enterprise. “The world is a small place, and it’s no longer the case we all work in the same building,” Hackney said. “We need to spend time figuring out how to communicate and collaborate across boundaries — geographical and cultural.” One type of initiative Hackney advocates as a way to build these connections is what he calls “skills-based volunteering,” that connects IT employees with local non-profits to engage in “real-live projects in the community. This builds that feeling of being proud of the company you work for. I can’t say enough about that type of approach.”

These cultural and demographic changes are happening in a business world where the credentials and “skills in demand” are in a fluid state. A lot of this is being driven by the shift from in-house developed systems to packaged and cloud-based or hosted solutions, noted Unum ‘s Miller. This is having a big impact on traditional software development roles, she said. “We have a large legacy debt, but the roles going forward are more about understanding process, data and integration; understanding the tools and software that are available, and how to apply this from a data and integration perspective – how to put the puzzle together.”

USAA’s Schwartz concurred. “The skill set absolutely is changing,” he said. “In our world, we don’t look at coding as a core competency.” Where USAA does hire people to start as coders, “We advance them pretty quickly, within three years.”

Ultimately, it comes back to the leaders of the technology organization to create the opportunities — not just for growth, but for innovation and competitive advantage. Panelist Gray Nester, SVP, BB&T Insurance Services (the insurance division of North Carolina-based bank BB&T), related how he has worked to get his organization to understand that growth and market leadership involve some risk-taking. “I come in and say, ‘There’s an opportunity to make some investments, some will be great, some will not be great. [But] it’s not whether or not the investment makes money. The culture change is: What did we learn and how can we apply it to other business areas? How do you take failure and turn it into success by changing the nature of what success looks like? It’s not all profit and loss.”

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