Reconciling the Cost of Business with the Cost of People
It’s no surprise that labor costs are a big part of doing business; the quality, experience, culture and talent of the team can make or break a company. Today, salary demands are higher than ever. Couple this with the evolving landscape of remote and hybrid work environments, it’s clear that the labor challenges that companies face have reached new heights.
According to a Willis Towers Watson survey cited by CNBC, U.S. companies are expecting to pay an average 3.4 percent raise to workers this year across all industries. The COVID-19 pandemic of the last several years has accelerated the adoption of remote and hybrid work arrangements. Today, companies and employees alike are grappling with the right balance of in-office and remote work as well as career and personal interests. Reconciling how to keep staff productive, engaged and happy along with overall company goals of earning a profit can be a challenge.
High Labor Costs Stifle Growth Potential
As an industry, insurance is expected to grow faster than average in the United States with a projection of nearly 5.5 percent growth over the next 10 years compared with 3.7 percent national growth.
An article on Insurance Bee attributes this growth partially to an increase in the number of people purchasing both life and travel insurance during the global pandemic. Revenue for both insurance agents and brokerages grew by 2.7 percent in 2020, following an increase in the number of agents by 14.9 percent during prior years.
While more than half of all insurance agencies in the country generated less than $500,000 in revenue, it can be a challenge for new players to enter this growing market due to labor costs. The article noted that nearly 36 percent of revenue for a new agency will go toward labor.
In addition, The Great Resignation and labor shortages in just about every market can make attracting and retaining talent significantly more difficult and costly. This can be a larger problem for small- to medium-sized companies that simply cannot compete with the larger corporations.
In-Office, Hybrid, and Remote Work: What Combination?
Alongside the high costs of labor and difficulties in attracting and retaining talent, insurance companies are struggling to define the best work environment. While the pandemic pushed a majority of white collar jobs home for an extended period of time, the question now is how the flexibility and changes experienced during this period should be implemented in the long term.
On the one hand, the insurance industry seems like a great fit for remote employees. According to a study by McKinsey & Company cited by the Newman Group, more than 800 occupations and 2,000 activities were evaluated and results indicated that insurance professionals offer the most potential for working remotely.
First, the fact that most insurance professionals are educated and skilled make them remotely productive. Second, roughly 80 percent desired a remote arrangement. Finally, the majority of job tasks such as analyzing information, underwriting, and claims processing can be done remotely without a loss of productivity.
While many studies report that employees as a whole desire a remote or hybrid work environment, companies are also hearing from some groups that they want to return to the office. Older employees who have spent their entire careers “going to the office” want to return to that familiar environment. Young professionals just entering the workforce are often seeking the social aspects of an in-office environment as well as the networking and mentoring opportunities that are more easily experienced in-person.
Digital Coworkers Augment Labor Force
To address both the challenges of high labor costs and changing work environments, businesses need to think outside the box. While many organizations are implementing automation solutions, few are considering the role automation plays in augmenting the labor force and addressing these rising challenges.
Roots Automation provides Digital Coworkers to its customers, each trained on very specific tasks to address particular needs that are often closely linked to labor issues. These Digital Coworkers enable growth potential for in-house staff by removing the rote work that can result in disengagement. Additionally, Digital Coworkers are powerful additions to remote and hybrid work environments thanks to the Roots Cockpit, which allows remote management and an at-a-glance overview of work.
As an example, during the pandemic Digital Coworkers delivered in-office services when employees were working from home, such as facilitating the mailing of acknowledgement letters. They can help fill gaps in temporary labor requirements during audits and other seasonal events. By handling many of the repetitive tasks more quickly and accurately than humans, a Digital Coworker can actually enable higher productivity levels from the professional staff who are freed for higher level, more complex, collaborative work.
For more information on Digital Coworkers, contact Roots Automation today.