Featured Health Business Daily Story, Sept. 28, 2017

Aging Workforce and Hot Market Spark New Hiring Strategies, ‘War for Talent’

Reprinted from HEALTH PLAN WEEK, the most reliable source of objective business, financial and regulatory news of the health insurance industry. Subscribe today!

By Meg LaPorte
September 11, 2017Volume 27Issue 31

Finding the right candidates to fill executive and managerial positions in health insurance plans has become a “tremendous war for talent” among recruiters and the companies themselves, some industry insiders suggest. What was once an insular method to recruitment is now an outside-the-box and outside-the-industry approach, says Margaret Resce Milkint, managing partner with the Jacobson Group, a Chicago-based insurance executive search firm.

“There is a tremendous war for talent and we have a convergence of issues creating a bloodier war than we’ve seen in a very long time,” says Resce Milkint. “We are looking for a new breed of leader; they are looking for someone who is very, very tech savvy and agile, with analytics and with social media expertise. We are looking outside to national carriers and completely out of industry to those who bring in customer experience, finance and other skills experience.”

Driving the need to look outward is an expected growth in hiring and a drive for higher revenue, according to a recent study of the insurance labor market recently conducted by Jacobson Group and Ward Group. “The industry continues to face an increasingly competitive recruitment environment. This tightening market is being driven by virtually non-existent industry unemployment, a growing talent gap, a shallowing talent pool and increased staffing demands,” the study concludes.

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In particular, the study found that 62% of life/health insurers plan to increase staff during the next 12 months, compared with 10% of companies expecting to reduce staff during the next 12 months. What’s more, 75% of small companies plan to add staff during the next 12 months — that’s 13 and 27 percentage points higher than medium-sized and large companies, respectively. On the revenue side, 81% of companies are expecting to grow by 10 percentage points. According to the report, this is the first time since July 2012 that expectations increased from the January to July survey period.

For smaller insurers, there is an added layer of difficulty that comes with recruiting executives and managers. For Capital District Physicians Health Plan (CDPHP), based in Albany, N.Y., geography is a challenge, says Scott Klenk, senior vice president of human capital management. “Being in Albany, it’s difficult to compete with both for-profit and not-for-profit plans,” he says, adding that another challenge is getting candidates to relocate to the region, unless they have family or other ties to it.

So how does he tackle the problem? “One thing we do is we impress upon people our culture and our mission. We are not-for-profit and our mission is to provide quality health care at a reasonable cost. That’s in our culture and we sell our culture here to execs,” says Klenk.

For IT, analytics and HR positions, Klenk says he has ventured outside the industry — to financial services and even the New York Stock Exchange — to fill the openings. “Although the majority of our IT execs have come from outside the industry, for operations, marketing and sales, you still need industry experience,” he explains.

Both Resce Milkint and Klenk agree that in this highly competitive environment, social media and data analytics are important skills to have for all executive types. In fact, the Jacobson study found that analytics, executive and actuarial positions are the most difficult to fill.

More traditional methods of recruitment are still useful, according to Klenk, who finds that LinkedIn, Indeed and Twitter are very useful search tools for all levels.

Resce Milkint touts the importance of developing leaders through an internal pipeline, “but that takes time.” She says other pathways “can give you immediate access to fresh ideas and perspectives as well as the ‘lift’ that the health care arena needs right now to set the tone and agenda for innovation.”

Among the factors behind this new workforce landscape are aging executives and managers and a new workplace, which demands a new type of leader, she adds. “We really look for a future leader. We have more of a focus on Millennial and Gen X talent, and that’s important in terms of inclusivity,” Resce Milkint asserts. “The insurance industry consists of an aged workforce and we want to fill the gaps because we have droves of people retiring over the next five to seven years.”

Also affecting health plans is the fact that the health industry itself is going through tremendous disruption, transformation and innovation. “To extend the battlefield analogy, it’s a VUCA environment, which in military parlance means: Volatile, Uncertain, Complex and Ambiguous,” says Resce Milkint. “We are looking for leaders who will win in a VUCA environment. And this is especially true for health care today as we move to a less hospital-centric, more consumer-focused model. There are new skills that are needed in health care, such as technology, analytics and customer experience, à la the hospitality industry.”

For instance, Resce Milkint recently placed a top executive at the Blues plan in Arkansas.

“The new chief marketing officer for the Arkansas Blues plan we brought in had in-industry and out-of-industry experience. He didn’t come from another Blue,” she says. “He had a little bit of knowledge of the health insurance industry but he also brought in a fresh perspective.”

Although Blues plans have been known to recruit from within and among one another, many are now turning to other industries for transferrable skills that can refresh the workforce, Resce Milkint says.

What’s more, while an executive search firm is certainly one of a number of avenues for finding executives and managers, both Klenk and Resce Milkint acknowledge, there are multiple pathways to find talent. “Most organizations still retain executive search firms because they are looking for a firm that can be an ambassador who can tell their story and who can entice talent that is currently happy and successful, and not thinking about change, and getting them motivated to say, ‘what about this and what about now,’” says Resce Milkint.


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