Insurance IT professionals are cautiously optimistic about the staffing and salary outlook, according to InformationWeek's 2013 U.S. IT Salary Survey. IT salaries haven't changed much in the past year, but tech jobs in the sector are thought to be more secure than in the past few years. And the majority of survey respondents say they're satisfied with their jobs, making it challenging for insurers to hire talent, particularly with experience in key areas, such as analytics and big data.
The economic turmoil of the past several years has taken a toll on IT salaries at insurers, but the picture isn't all bleak. Pay isn't back to pre-2008 levels, says Jeff Rieder, partner and head of insurance benchmarking firm Ward Group, but it is inching up.
Base salary for IT staff at insurers increased a median of 1.6% over last year's numbers while managers' base salary is up 2.4%, according to InformationWeek's survey. With bonuses, managers' total cash compensation increased 2.8%.
A majority of staff (75%) and managers (88%) say they expect to receive bonuses this year, usually tied to personal, corporate and division performance, as well as completion of project milestones. The majority of insurance IT staff (67%) and managers (71%) also say they're satisfied with their total compensation package. Sixteen percent of staffers and 24% of managers say they're very satisfied.
IT staff and managers vary greatly in what matters most to them about their jobs and what causes them to look elsewhere for new opportunities, according to the survey. Compensation always is important -- it must be competitive -- but other factors contribute to employee satisfaction.
"When people leave, it's usually around how they're engaged with their employer, if they feel they have a career path within the organization and if they feel their current position provides a rewarding experience," Rieder says.
Tech leaders expect to work in a culture that embraces what they do, says Margaret Resce Milkint, a partner at the Jacobson Group, an executive search firm. Workplace flexibility is critical as well. "They want to work within a culture that lives these values, that recognizes the critical nature of technology to drive strategy, innovation and growth," she explains. "Employees expect that they can work from home, that they can be virtual, at least part of the time. This is a huge culture shift for the insurance industry, but this type of flexibility has become essential."
Fortunately for the industry, a majority of the IT pros at insurers responding to InformationWeek's survey aren't seeking new employment. Only 8% of staff and 4% of managers say they're actively looking for new jobs. (Another 30% of both staff and managers say they're somewhat actively looking for new jobs.) Higher compensation is the top reason these respondents say they're looking around. Aside from compensation, staffers most frequently say they're seeking more interesting work, and managers say they'd like more personal fulfillment. Both managers and staff cite their company's management or culture as a factor in their decision to launch job searches.
Job satisfaction is very important to both groups. It's the No. 1 reason all IT pros surveyed say that they would consider a lesser position or title. The good news is that 66% of IT staff and 73% of IT managers say they're either satisfied or very satisfied with their current jobs. Sixteen percent of insurance IT staffers say they're very satisfied with all aspects of their jobs compared with 12% last year, while 20% of managers are very satisfied with all aspects of their jobs compared with 22% in 2012.
Staffers say that base pay, flexible work schedule and job and company stability are what matters most to them about their jobs. Managers are looking to be challenged by their jobs. Base pay also figures in prominently, as does feeling that their opinion and knowledge are valued.
Where The Growth Is
To do well, insurance IT pros need more than just technical expertise. People with skills as statisticians and computer scientists, as well as those with MBAs, are seeing their compensation grow, says one survey respondent. Insurers go the extra mile to hold on to IT professionals with these qualifications and move them into leadership roles.
New York Life ($4.7 billion in assets, March 2012), for instance, focuses on developing IT leaders who understand the full suite of the company's business lines and what differentiates them to show how they stand out from the competition, says Peter Krockta, the insurer's director of infrastructure. "This makes IT a full partner, not a service provider to its peer departments," he says. "The industry needs to place a similar focus on developing business-savvy IT leaders, striking a healthy balance between technical skill sets and leadership skill sets to best align their IT area and the business."
Insurers also look for IT staff and managers who have knowledge of the insurance business in addition to technical skills. And "soft" skills are becoming increasingly important, nearly as desirable as technology talent.
IT workers have to be adept at business communications and aware of insurance trends. The "game changer" is "the professional who has a holistic profile," Jacobson's Milkint says. "Insurers are looking for IT staff and managers who can communicate, innovate and strategize, those who are charismatic and know how to speak the language of business, build consensus and know how to influence."
Five years ago, IT was striving to get a seat at the table, Milkint says. Today it has that seat and "the opportunity to shape business strategy and business models, not just implement them," she says. "Many of the leaders, managers and directors we talk to are tied hand-in-hand with business units and are working directly with the CIO and CEO."
Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio