Filling the Surety Industry's Generation Gap

Word of the construction industry’s labor shortage is being heard loud and clear: Two-thirds of U.S. contractors are having a hard time finding qualified workers and possess a virtually nonexistent backfill of young talent entering the industry. But what about the surety professionals working behind the scenes? Are they facing the same challenges?

They are indeed. Both surety companies and agencies have a short pipeline of talent, with companies and headhunters alike struggling to fill well-compensated positions for strong corporations. To add to the dilemma, the large generation gap in the surety and insurance industry forces companies to choose between an individual who has perhaps five to seven years left of their career and a younger, mostly unproven (yet more motivated) individual to drive their business into the future.  

Keeping in mind that a large portion of surety business doesn’t frequently move (and long-term relationships reign), this presents a large question mark. 

“Starting in the late 1990s and continuing through the 2000s, the insurance industry was largely forgotten as the hot ticket, with college graduates centered around Wall Street and the booming tech environment,” says Randy Noah, vice president of surety at Cincinnati-based AssuredPartners. “The insurance industry did a poor job of recruiting, training and retaining surety and insurance professionals during this time. Now, as the industry once again seeks talent, it is important to remember that insurance remains a strong and vibrant industry with immense opportunity in both the sales and underwriting arenas.”

Qualified applicants currently trade back and forth among companies—looking for a change in scenery, upward mobility or perhaps a monetary increase. When an individual leaves one company, the incumbent company is often left scrambling to retain the business and begin the long process of hiring the right replacement, imposing an extra burden on others within the organization to pick up the slack in the interim. 

Job openings often can last a year or more. Combine that with “job hopping” becoming more normalized, and the backfill becomes more important than ever.

With a lack of formal surety education (many in the industry will describe how they “fell” into the field as opposed to choosing it), surety knowledge is largely gained by way of a finance or accounting major, on-the-job training and reading technical books. The pipeline for talented individuals begins post-college, making early recruitment difficult. 

Finding Talent
So where is talent found, and how does the surety industry go about avoiding another wave of the 20-year gap between the future leaders (with the majority now in their 30s and early 40s) and incoming industry talent? Encouraging new employees to participate in local and national surety and insurance organizations, and establishing mentoring relationships between surety professionals and insurance professionals, may provide key opportunities.   

Now is the time to address educational involvement by collaborating with business and construction school programs. For example, a surety professional can volunteer to speak on behalf of the industry at colleges offering finance, business and accounting tracks to spark some interest in students who may not otherwise have a clear career path. 

Presentations for students are available for download on the Surety Information Office website (sio.org).  

In addition, getting students started early with internships (both high school and college) provides a path to future employment. Just don’t forget to involve them in more interesting parts of the job, not just mundane tasks such as typing reports and entering WIP schedules. 

Once those students are interested, encourage them to leverage their vast alumni networks at colleges and universities throughout the country—providing another business opportunity for not only themselves, but for the company as well.

This year at the Gamma Iota Sigma conference in Dallas, The Surety & Fidelity Association of America (SFAA) expanded its efforts to recruit on behalf of the industry. Gamma Iota Sigma is an international business fraternity for students of insurance, risk management and actuarial science. Special webpages were created with links to member companies’ recruiting websites and two industry professionals delivered a presentation to explain the role of a surety professional. The event was a success and SFAA looks forward to expanding its efforts in the future. 

Mentoring Through Local and National Organizations
Industry groups such as SFAA and the National Association of Surety Bond Producers, along with several local surety and construction groups, serve the interests of the industry well and provide opportunities beyond daily work life. Active involvement in these organizations can be a targeted effort on the part of surety companies and agencies alike; don’t wait until employees are five years in to get them involved.  

Individuals willing to immerse themselves in the field provide a voice for the industry; plus, they are much more likely to stay in the field and advocate on the industry’s behalf. It’s no secret that employee engagement is one of the keys to retention, and these groups provide yet another avenue toward achieving this goal.

Collaboration and mentoring are great tools for senior leaders to educate the industry and ensure business continuity. The Mentoring Quick Guide was developed by the SFAA Diversity & Human Resources Advisory Committee’s Learning & Development Work Group. This toolkit, available at surety.org, has comprehensive information focusing on four areas: leadership commitment and organizational accountability, talent acquisition strategies, learning and development, and engagement and networking.

From a surety perspective, while some agencies and brokers have dedicated surety departments and experienced surety producers, not all of them have the knowledge or the resources to provide formal bond training, yet most agencies still handle bonds. Mentoring helps agencies become more successful and well-rounded while expanding their role as a full-service fiduciary. 

Preventing another talent gap in the surety and insurance industry will, like most things, take time to develop. A concerted effort by carriers and brokerages to prospect, develop and maintain a steady pool of talent is just as necessary as it is on the construction side. 

The more proactive the industry can be with its recruitment and training, the less scrambling will need to be done. In effect, the generational gap in the surety industry will only be addressed by eliminating its existence down the road. 

Scot Albrinck and Colin Lengyel are bond managers with Old Republic Surety Company, Brookfield, Wis. For more information, email salbrinck@orsurety.com or clengyel@orsurety.com.