The impact of the pandemic upon Talent Acquisition, contingent labour and the demand of skill sets in the Insurance industry. An expert view from Jim Richardson, Director Megella Limited.

Here at Avencia we have designed our ‘Avencia Consults’ blog post series to bring you first-hand insight, knowledge and expert advice from leaders within the Insurance industry.


We were recently joined by Jim Richardson, Director of Megella Limited, and a Strategic HR, Reward, Talent Acquisition and Well-being specialist. Jim has extensive knowledge in designing and delivering in-house, RPO and hybrid Talent Acquisition models.


In this blog, Jim provides invaluable insight into how the pandemic has impacted Talent Acquisition’s positioning as a strategic function of HR, the skill sets in demand, and how Insurance organisations can attract and retain talent from outside of the industry.


In general, the Insurance industry has lagged other industries in terms of Talent Acquisition’s position as a strategic function of HR. Why do you think this is?

This rings true for both HR in general and Talent Acquisition functions in the Insurance industry. HR has struggled to play a true strategic role and has previously been perceived as a reactive function. While recruitment technology, operating models and processes have evolved to enable talent acquisition to be proactive in some industries, Insurance has been slower to respond to this.

The Insurance industry still relies heavily on third-party recruitment agencies, whereas other industries including for example the Banking industry have moved away from this. Investing in internal Talent Acquisition functions and turning to recruitment outsourcing to increase the return on investment, quality of hire, and making moving internal talent and acquiring the right external talent externally more strategically aligned to the business needs.

Historically, Talent Acquisition functions have always focused on three key themes: cost of hiring, speed of hiring and quality of hiring. The priority of importance of the three varies by function, hiring level and where we are on the economic cycle. However, it is fair to say that the Insurance industry hasn’t really prioritised the cost of hiring, as they often perceive agencies as being the quickest option, rather than considering direct hiring avenues. Recruitment budgets are often spread across numerous cost centres, rather than being centralised, meaning the true magnitude of total hiring cost does not get the attention it should.

When measuring the quality of hires, the Insurance industry has also lacked the technology and data touchpoints to measure quality of hire effectively. Except, the only real measure of the blunt instrument of employee attrition. However, with the right technologies and skill sets in the HR function organisations can measure quality of hire through performance ratings, number of promotions, size and quality of the internal and external talent pools.


The Insurance industry is in the throes of a sustained period of transformation driven by the need for increased digitalisation and automation, which has been accelerated by the aftermath of Covid-19. What skills do you think the market will need to recruit to meet those challenges?

The pandemic has accelerated the need for Big Data and Digital skills across all industries, including Insurance, and this talent will have to come from outside of the industry, and will be in great demand.

It has also highlighted the importance of having the necessary softer skills within a team. Empathy and adaptability have never been more important, especially for an organisation’s people leaders. Anyone within a managerial position will need to lead through enormous change and pressure. The ability to attract, manage and develop talent, as well as looking after their own well-being are some of the most important priorities leaders will have to manage. It should be a key time for HR functions to add significant value.

With the increased scrutiny of budgets, those organisations who assess their talent populations and have internal mobility high on the agenda will have a greater chance of thriving. Moving internal hires to roles where they would usually have gone out externally is beneficial from both a cost and cultural prospective.

Managers will therefore need to be more open to taking a chance on someone who is not necessarily the finished article. This is where those organisations who can implement strategic workforce planning, alongside bespoke development interventions will succeed, as they will be able to retain their top talent.


What do organisations need to do to be better positioned to attract and retain talent from outside the industry?

Unfortunately, Insurance isn’t deemed as an attractive industry by the younger generation and so employer brand is crucial if organisations are to make themselves more attractive.

The Insurance industry has been notorious for its focus on presenteeism however, times are changing. Organisations need to, and are starting to, embrace the recent changes to adopt more flexible and remote working practices. It will certainly help Insurance become a more attractive industry for future talent and will also help to retain existing talent.

Consideration also needs to be made to pay and benefits. These will need to be either aligned, or more attractive than other industries if top talent is going to turn their head. One thing for certain, those organisations who do not embrace the recent changes in working practices will be hindered in the future. There is no going back to the old ways of working. The Covid-19 pandemic has just accelerated the changes we were already slowly moving towards.


Opinion seems divided on whether the use of contingent labour in the UK will grow as a result of Covid-19, retract as a result of IR35, or remain static (albeit with an increase in PAYE and SOW contingent labour engagements). What do you think?

Before the recent IR35 reform delay, I would have said that the use of contingent labour would have decreased.  

However, the pandemic has forced organisations to become more careful with hiring permanent employees. Many are nervous of a second or further localised spikes and feel that permanent employee headcount could impact economic sustainability and business performance.

Allied with the level of change and transformation that the industry is going through, utilisation of contingent labour, particularly of transformation experts, will continue.

Therefore, I think there will be an increase in non-permanent hiring (PAYE, SOW, PSC) and the unfortunate expected rise in redundancies may mean people are more likely to consider project work or non-permanent positions.

Strategic workforce planning will be the key to selecting the type of hire and skill set required. I can only see this as a positive thing for the future of contingent labour.


In the mid-size sector, I sense that often HR are reluctant to get their arms around contingent labour, IR35 has forced them to. Why is this and what do you think the optimum operating model is for managing total Talent Acquisition?

The main reason why historically the Insurance industry, along with many others, haven’t taken on contingent labour is they haven’t had the skills to do so. This, along with internal politics have made it difficult. However, it absolutely makes sense to have all types of resource managed through one function. If you can truly partner with the business on the type of resource they need, advise, facilitate and source, then HR and Talent Acquisition will be extremely effective.

From my experience this is where recruitment outsourcing providers can really add value and help HR and Talent Acquisition teams bridge the knowledge gap and deliver total talent acquisition in a short timeframe.


If we just focus on the UK market, and looking at Financial Services in general, for the past 5 years the pendulum has swung toward building in-house Talent Acquisition teams as opposed to recruitment outsourcing. Why do you think this is?

The pendulum changes direction regularly, and most recently towards in-house.

Some RPO firms have typically struggled to keep up with the times. They are often too slow to understand what organisations want to achieve through outsourcing. They often take an off the shelf product and have tried to hammer this home – it doesn’t work anymore. They will need to listen to the client’s needs more than they have been.


As a result of Covid-19, will the pendulum swing back?

The pandemic is certainly going to help the RPO industry. Any organisation with medium to large in-house teams will be carrying large fixed costs and so there is an opportunity for an RPO to come in and take over all or part of the permanent hiring activity whilst the future is unknown. If an RPO can flex their commercial model and service to help clients navigate the next 12 months of uncertainty, I can see some interesting conversations happening.

If your organisation has been building an in-house team, who have been furloughed, and you are looking at making redundancies. Switching the pendulum back to RPO whilst we navigate through the potential rollercoaster of hiring over the next couple of years makes good commercial sense.


For an HRD, or Head of Resourcing what should they be considering when selecting a recruitment outsourcing partner?

My advice would be slightly different if a tender was for a first generation RPO solution or a re-tender of an already outsourced solution. However, there are a number of consistent things I would suggest:

Be confident in what you are looking for. There are now a variety of different ways you can use RPO and there is now a great number of smaller RPO firms who are looking to add very different solutions. It may help to have someone who understands talent acquisition functions and the RPO industry to help navigate what you really need and who could help you.

Culture fit is key. You are entrusting your employer brand and reputation on how well your hiring is delivered. That reputation extends internally as well as externally. You want to be very sure that the RPO firm you partner with is going to be easy to deal with, partner closely on fixing issues, and more importantly will flag potential issues to you before you hear them from the business.

Use the expertise of RPO firms to improve your talent acquisition processes during the implementation stage. Most RPO firms have developed consulting services alongside their RPO delivery service. This includes best practice advisory across employer branding, internal mobility, strategic workforce planning, cost saving strategies, selection techniques with the latest AI technology and onboarding.

It would be smart to extend the implementation stage by a short period to ensure you are getting the very latest best practice across the whole talent acquisition life cycle. This is particularly relevant to first time buyers of RPO.

You will need to ideally work alongside the procurement function on a tender but ensure the partnership is balanced. Be aware that the cheapest option isn’t always the best option. In fact, it can end up costing more money over the period of the contract.

If possible, include contingent hiring and even consultant/SOW activity alongside any permanent RPO tender. It may take more time to set up, but the benefits in the medium/long term will be significant.

As part of the tender process, you need to meet the key on-site team before you award the contract. The contract also needs to be flexible enough to allow you to ask the RPO to work on specific items that are not necessarily outlined in the contract and won’t incur additional costs. Therefore, a strong relationship with the RPO firm is key.


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