(Image credit: Dollar Photo Club.)
We are on the far side of the Great Recession, and demographic shifts are underway which will have millennials representing fully half of the US labor force by 2020. It may well be time for insurance carriers to re-think human capital management policies. Several recent trade industry articles highlight this point. One notes that underwriting skills are increasingly difficult for carriers to find. Another observes that both technical and actuarial skills are so hard to come by that carriers need entirely new recruiting mechanisms to entice the best and brightest to consider a career in the industry. A third points out that for members of the millennial generation, the idea of reaching a 10th anniversary with any company is considered not just a failure but an “epic fail.” All of this bodes for an interesting new day as CIOs and their management teams grapple with transformational efforts spanning many lines of business.
In fact, there is a clear parallel within the technology world. Many IT organizations are now thinking about their portfolio in a bimodal fashion. Old, legacy, frequently mainframe-based applications may well be 30 or 40 or even 50 years old. The business case for replacing some of these can be daunting at best. As a consequence, thinking about how to wall these items off and run them in a safe manner with minimal change in their environment can be a winning solution. Stabilizing these systems can allow them to run remarkably well and inexpensively for an extended period of time. Finding the skill sets to support these applications, which are frequently dependent on a combination of COBOL and Assembler, is generally not that difficult. The systems will never be flexible or agile, nor will they allow for rapid product development, but that’s not the point. Used as utilities to perform the basic functions that they were originally designed to do can allow these systems to persist for an extended period. It is entirely likely that some of them will outlast the careers of the people currently supporting them. And, in many cases, the people who are supporting them have had careers that have lasted for 20 or 30 or 40 or more years as well. There is an interesting reciprocity in that.
(Also by Rob McIsaac: Wearables and the IoT: More Bang Than Bling?)
Modern systems are flexible and configurable, and as a result they are the cornerstone of transformational efforts. This leads to another noteworthy parallel. The systems are designed in such a way that they will have a much shorter useful life than the systems that they replace. The natures of technology dictates this trend, considering how quickly things go from “state of the art” to “yesterday’s news.” Architecting transformational projects to recognize this is one important success factor for organizations to consider. Another, which is frequently overlooked, is the implication for human capital. Having cracked the code on hiring millennial team members that are able to support new and emerging technologies, carriers are finding that this cohort has a very different expectation for the durability of a relationship with any employer. Rather than 20 or 30 years of commitment, they are much more likely focused on a two or three year time horizon. To an employee, the benefits of this approach allow them to augment skills, continue to stay current, and of course not tie themselves to any specific situation which might go sideways.
While there maybe actions that one can take which will extend this timeline a bit, it is unlikely that it will be altered by a factor of five or ten. This has significant implications for how one hires talent and considers replacement activities. Just like technology, which has emerged into a near constant refresh cycle, many IT organizations will have to consider a similar path for maintaining human capital. While it was undoubtedly true that 20 or 30 years ago that people came to carriers with the idea that it was a place that a full career could be enjoyed, carriers themselves have worked to dispel employees of that notion. During a time of high unemployment this factor was undoubtedly masked in the general economy. We have now experienced a decade where a new generation of prospective employees have been able to adjust their behavior. This is a critical part of the “new normal” which carriers will need to factor into transformational planning. The future is here now and it is going to be a very interesting run!