Battle for Talent

Published in

Koble

5 min readAug 25, 2020

Driven by emerging technologies and a new customer-centric approach, the insurance landscape is changing. In a series of articles, Koble is looking at the state of digital insurance in 2020 and beyond. In part two, Sergi Baños Lara, our CTO at wefox Group, takes a closer look at the challenges of the skills shortage in tech, and how the fierce competition for top talent is impacting strategic decision making in the insurance industry.

Digital insurance and the battle for talent

Today, value is increasingly added online and business growth is powered more and more by software delivery. Software, in other words, is eating the world. With its potential for unprecedented customer engagement, optimization, and automation, it gets injected into every corner of a business.

To say that almost every company is turning into a technology company doesn’t send shivers down the spines of CEOs anymore. What does, though, is the question of how to find and retain the highly digitally skilled workers to deliver this change.

The skills shortage slows down technological change.

Arguably, if you are a developer, software engineer, product designer, data scientist or just someone who can code you can consider yourself part of the most valuable resource in the labour market. Combine a general skills shortage, with an ageing population, and you find what some commentators don’t hesitate to call a “war for talent”.

What does this mean for insurance?

With its complex products and often home-grown legacy systems, which only a handful of developers know how to operate, the industry might seem a bit late to the party. But insurance’s digital transformation has certainly gathered momentum in recent years. Its appetite for digitally skilled employees is growing fast.

When it comes to parties, who else is there is even more important than the timing. The question is, who is insurance competing with for talent and what does best practice look like?

With their innovative approach and unmatched affluence, Alphabet, Apple and other tech giants are among the most popular employers globally. At the other end of the spectrum, an ever-growing number of start-ups are reinventing entire industries with new software, attracting the same rare top talent which incumbents are keen to get their hands on.

The playing field isn’t level

For insurance carriers and distributors this means they suddenly find themselves competing with the biggest brands on the planet. Not to mention the Korean mobile phone manufacturer, German automotive giant and South African fast-food chain; all looking for Java developers, backend engineers or digital architects.

And that’s not all. Similar to other sectors like banking, insurance struggles with slow processes due to legacy structures as well as an ageing workforce. The industry “suffers from an image/desirability complex with Millennials and Gen Z”, according to Majesco’s Future Trends Report. “80% of Millennials have limited awareness of the industry’s employment opportunities, 44% say that the insurance industry is boring, and only 4% are drawn to insurance as a career opportunity.” Under the top 50 of the most attractive employers worldwide, there isn’t a single insurance business.

Even if you find enough experienced people for a whole team of, let’s say, Node.js developers, you are facing an additional set of challenges. Once hired, this highly sought after workforce wants to play with the newest technology, learn, grow and discover. To retain them is an art in itself.

https://hackerlife.co/blog/san-francisco-large-corporation-employee-tenure

When tech blog HackerLife did a survey amongst software engineers in Silicon Valley a few years back, they found that almost half of all engineers even leave Google, Facebook and Amazon within two years. “Some software engineers will jump ship as soon as they get bored or get a better offer elsewhere. Others stay to get a ‘full credit’ of working at a company”, the authors concluded after looking at more than 10,000 public profiles of professionals in the field.

Strategy is essential

The scarcity of much-needed resources has changed the game. This has implications for IT strategy. If you aren’t one of a hot few companies that can attract a highly desirable and specialised workforce, you have to ask yourself the right questions and approach things differently.

For example, what are your chances of hiring and retaining the experts you need to deliver your digital initiatives? Do you want to invest time and resources into building your own team and risk paying too much for too little experience? Would you consider partnering with another company to gain access to the technology and skills for the job?

With the necessary talent in short supply, some businesses have to put a herculean effort into building quality digital services in-house. While many players could create the solutions they need themselves, there are services or functionalities that simply would cost too much to build from scratch.

Don’t go it alone

People are tech-companies’ and start-ups’ most important assets. Partnering with them means the best available tech talent builds the solutions you need.

In regards to Slack, Atlassian, Zoom or Lima, there is no doubt that buying a product or service you can’t produce yourself is the better option compared to reinventing the wheel. In this instance, harnessing the output of experts that live and breathe corporate communication channels and integration is a no-brainer. More broadly speaking, it is also a paradigm shift, a change of a mindset many incumbents hold very dearly.

When a greenfield approach doesn’t seem viable, expanding your core capabilities with the help of another company and their talent can go a long way. However, whether to build, buy, or acquire the technology in question is one of the toughest decisions to make in digital transformation. That is why considering your talent pool and adjusting your strategy accordingly should be an essential part of the journey.

Resources and additional readings:

You can find Sergi Baños Lara on Linkedin.