The potential riches awaiting insurance companies that do a good job meeting the needs (in terms of products, service and delivery channels) of the soon-to-start-retiring baby boom generation are well-recognized, as I&T Senior Editor Anthony O'Donnell discusses in an insightful article in this issue (page 28). But before carriers revel too much in these revenue-generating prospects, they should consider a potential dark side of the aging of the boomers: the impact on their own workforces, especially in their IT organizations. As skilled, loyal professionals who understand the business (both technology and insurance) start to retire, insurance IT organizations inevitably are going to take a huge hit, which would put many companies at a serious disadvantage in terms of being able to compete, innovate, respond and provide service.
To make matters worse, it looks like there's going to be an overall IT talent shortage, spurring competition for the most-skilled executives (a competition in which insurers often are at a disadvantage). The Association of Executive Search Consultants reports that nearly one in five headhunters it surveyed recently expect a shortage of CIOs, CTOs and other top IT leadership talent. Financial services and banking professionals were named as the No. 1 most-sought-after talent in 2006, with more than half of respondents naming that sector as one of the biggest growth markets for talent this year.
A growing number of companies in all industries have awakened to the pending crisis and launched initiatives to try to get older workers to stay in the workforce longer. For example, a group of about two dozen industry associations, ranging from technology to trucking organizations, recently came together to create a new Alliance for an Experienced Workforce, a collaborative effort aimed at getting employers to develop strategies for keeping aging American workers viable in the workplace.
But for companies that are not able to persuade seasoned IT professionals to postpone retirement, outsourcing may be the only alternative. Clearly, the business case for outsourcing and offshoring in insurance is going to shift away from the pure cost play and move toward the desperate need to find IT talent at all levels in order to help companies meet their growth, compliance and service goals.
Hey, baby boomers, isn't it nice to be popular?
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio