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When you hear the words “gig workers,” you probably think about carpenters, rideshare drivers for Uber, or perhaps freelance graphic designers. And until recently, that’s been a mostly accurate picture. But the gig economy has been growing over the last few years and is reaching into unexpected industries–insurance included.
Talent acquisition continues to be one of the biggest struggles for insurance organizations in the post-Covid landscape, and the most proactive employers are looking to ever more creative hiring strategies to fill their labor needs. So while gig employees may not fit your conventional idea of building strong and adaptable workforces, insurance employers shouldn’t write off this alternative talent source.
In this blog, we’ll dig into current gig economy statistics, explore how gig workers are impacting insurance recruiting strategies and why it’s essential for insurance employers to strike a balance between meeting short-term needs and establishing long-term stability.
Gig workers, often referred to as freelancers, independent contractors, or contingent workers, represent a growing segment of the modern workforce. They are individuals who engage in temporary, project-based, or on-demand work arrangements, offering their skills and services to businesses on a flexible basis. Gig workers are not bound by traditional, full-time employment contracts and are typically compensated based on specific projects or hourly rates.
These workers come from diverse professional backgrounds, including IT professionals, marketing specialists, writers, designers, and more. And the gig economy’s reach continues to expand. Up to 35% of US workers engage in gig work for primary or supplemental earnings and that number is predicted to reach up to 50% by 2027. What distinguishes gig workers is their autonomy and the freedom to choose the projects they take on, often working for multiple clients simultaneously. This flexibility appeals to individuals seeking greater control over their work-life balance and schedule, the opportunity to explore different industries, or the ability to pursue multiple income streams.
In the context of the insurance industry, gig workers can range from actuaries and claims adjusters to IT consultants and data analysts, offering their specialized expertise on a contract basis to address specific company needs. The gig economy’s rise has reshaped the way businesses source and utilize talent, making it an essential consideration for insurance companies seeking to stay competitive in a rapidly evolving landscape.
With a constant need to adapt to changing market conditions, respond to catastrophic events, and navigate intricate legal frameworks, insurance companies often find themselves in urgent need of specialized talent. On top of this, insurance employers have been facing record numbers of unfilled jobs over the last 3+ years, compounded by mass retirement, high turnover, and a lack of experienced candidates. In this difficult staffing environment, the gig economy has emerged as a valuable resource for insurance companies for a few key reasons:
The insurance industry faces constant market fluctuations, from natural disasters and economic crises to regulatory changes. Gig workers can be quickly onboarded to address these challenges, providing the agility needed to respond to unexpected events. Additionally, their faster sourcing and onboarding means insurance organizations can quickly fill holes in their teams when full time staff members leave suddenly.
Insurance companies require a diverse range of skills, from underwriting and claims processing to data analysis and technology expertise. Gig workers often bring specialized skills and experience that can fill gaps in the workforce on a project-by-project basis. With skills and experience already difficult to find as employers seek full-time candidates, this can be a huge benefit of tapping into gig employees.
Hiring gig workers can eliminate some of the overhead costs associated with full-time employees, such as benefits and payroll taxes. And, since gig employees often arrive with a specific skill set suited for an individual project, they can require less training which can also save money. When their project with your company concludes, you can let them go without the additional cost of unemployment.
Gig workers provide the flexibility to scale your workforce up or down as needed. This scalability can be especially valuable during seasonal peaks or when responding to sudden increases in insurance recruiting demand. As many gig employees in the insurance industry perform their work remotely, this also means scaling your staff up doesn’t require increasing office space.
Gig workers often bring their own tools and equipment, reducing the financial risk associated with providing resources for full-time employees. They come with an expectation to leave at the conclusion of their contract and while you should still treat them with care, they may not require as much attention as a new full-time employee.
All this to say the gig economy offers undeniable benefits but insurance companies must also acknowledge and address the challenges that come with relying heavily on gig employees:
By nature, gig workers are typically not committed to a company for the long haul. This can lead to a lack of loyalty and emotional investment in the organization, potentially impacting the company’s culture or even the quality of the work. It can be difficult for managers to achieve the same level of accountability with gig employees who don’t share the long term goals of the company.
Building a strong pipeline of future leaders and key talent is crucial for the long-term success of your organization. Relying too heavily on gig workers can hinder succession planning efforts and leave the company vulnerable to leadership gaps. As insurance workers continue to “age out,” gig work could in fact create rather than solve staffing issues.
A cohesive company culture is often cited as a key driver of employee engagement and satisfaction, as well as increased productivity and profits for the organization. Gig workers, who may work remotely and briefly, may not fully integrate into the company culture, potentially eroding the sense of belonging among permanent employees. This can also affect full-time insurance recruiting efforts, where company culture is a key factor in a candidate’s choice of employer.
Gig workers may take their knowledge and expertise with them when their contract ends, creating a potential knowledge drain for the company. Internal staff can be essential to training new employees, upskilling current staff and encouraging consistent professional development. When your most specialized and knowledgeable employees are in and out the door, this culture of learning can stagnate.
Gig workers offer valuable short-term solutions to hiring challenges in the insurance industry. However, maintaining a balance between gig workers and long-term placements is essential for a thriving, sustainable workforce. The key is to leverage gig workers strategically while investing in a core team of enduring employees who can drive the company’s long-term growth and success.
Insurance organizations should also consider how they can apply their retention strategies to gig employees in an effort to usher them into full time employment. Let their time as a freelancer at your business demonstrate the support you provide to your staff, your commitment to their personal goals, and the opportunities for career growth if they choose to stick around. In this way, insurance companies can harness the best of both worlds, achieving adaptability and stability in an ever-evolving industry.
If you need help filling gaps on your team–whether short term or long term–our experienced insurance recruiters are ready to jump in and find staffing solutions that fit your needs. We’re all about building long-term relationships with both our clients and our candidates and can tap into our network of insurance talent whenever you need. We’ll work with you to identify opportunities for short term employment and strategies for making lasting placements. Just give us a call to get started!