Adjusters Like Their Jobs Despite Workload and Staffing Complaints

Despite low staffing and high workload and changing legal and regulatory environments, claims adjusters like their jobs.

They are also less worried about losing their jobs than other professionals.

According to the Claims Journal 2012 Job & Salary Survey — a whopping majority say they enjoy working for their employer. According to the exclusive survey, 88 percent of independent adjusters and 84 percent of insurance company adjusters reported that they like working for their employer, while 91 percent of company management say they like working in the industry.

Even though job satisfaction ranks high, common concerns emerged when it comes to the claims industry.

“Based on comments, reduced staff and increased work are top complaints,” said Paul Osborne, senior consultant for Demotech Inc., who analyzed the results.

According to adjusters from 22 states who responded to the survey, claims department staffing in 2011 remained level with little increase or decrease in staff size.

While workload concerns were high, the average number of hours worked per week hasn’t changed in five years.

Thirty-eight percent of adjusters reported working between 41 to 45 hours while 53 percent indicated this number has stayed the same during the past five years. This data is on track with results from the latest American Time Use Survey, conducted by the Bureau of Labor Statistics (BLS), which found that in 2010 the average American worked about 8.39 hours per day.

Despite constant media reports highlighting a dire job outlook, more than 75 percent of adjusters surveyed said they are not worried about losing their jobs in 2012. While 67 percent of respondents did not expect their claims departments to add staff in 2012, a recent labor study conducted by The Jacobson Group, an executive search and staffing firm for the insurance industry, suggests these professionals might be underestimating the potential. The 2012 Insurance Labor Study conducted by The Jacobson Group revealed that more than 50 percent of all companies say they will increase staff over the next 12 months.

“That’s the greatest percentage increase in the history of this study,” said Dave Coons, senior vice president of The Jacobson Group.

The increased need for staffing is the result of business growth and volume, he said.

Another strong indicator that the economy and the industry are improving is that 60 percent of small carriers also plan to add staff over the next 12 months.

“When you start to see small businesses having a more positive outlook on business growth and planning to add staff as a result — that’s a very positive sign that the economy is, in fact, improving,” Coons said.

Technology, underwriting and claims are key areas of expected job growth. Coons said that’s because there’s pent-up demand for talent.

“…These areas were some of the most heavily affected by the downturn in the economy. They experienced some of the most significant reductions in force to begin with, leaving fewer employees to handle increasing workloads,” said Coons.

It’s also significant that the insurance industry unemployment rate is very low compared to the national average, Coons said.

Just this year, Progressive Insurance Co. announced 1,100 new jobs. Katie Koch, recruiting director at Progressive, said that added growth spurred the hiring. Progressive currently employs 25,000 employees handling more than 12,000 in claims alone.

Challenges Facing Claims Teams

While the job outlook for claims appears to be improving, adjusters remain concerned about workload. Many feel their departments are understaffed to handle a growing workload and that companies have been reactive rather than proactive in filling those positions. According to adjusters, other issues including a lack in clerical help, over-management, regulatory and technology changes also affect their workload.

As one adjuster put it, “We are always two to three people short of what we need to handle the workload.”

Some feel the increased workload is having negative effects. An Illinois company adjuster stated, “The quantity of work is impacting the quality.”

Adjusters say that in addition to concerns over reduced staffing and increased workload, they worry about losing and recruiting talented claims staff to their teams.

“Staffing a new position with a quality staff member is more difficult each year. College graduates are not interested in sitting in a cubicle everyday putting out fires. [The] industry has become so ‘procedure driven’ — we are producing claims processors and not adjusters…In 10-15 years who will be manning the claims desk?” asked one adjuster.

Adjusters aren’t just concerned about attrition; they also fear their counterparts might leave the company or field entirely.

“Management doesn’t understand the complexity of our work… There is definite leakage of talent to other carriers…We are starting to see a breaking point. All the fat has been trimmed and we continue to be stretched to the point that many, many talented adjusters across the country are looking to go elsewhere or pursue different career paths,” said one concerned adjuster.

Aging Claims Workforce

“The aging workforce and the onset of high volume retirement is certainly contributing to a shrinking talent pool,” said Coons.

Fifty-three percent of survey respondents were adjusters between the ages of 51 to 60 with the next closest group, ages 41 to 50, at 30 percent.

Also, 39 percent of respondents have in excess of 21 years of claims experience — experience not easy to replicate.

How can the insurance industry handle a mass exit of claims department employees who are closing in on retirement?

One answer is by continuing to employ older workers, according to research conducted by the Sloan Center on Aging & Work at Boston College. The Generations of Talent Study, released late last year, found that employees aged 40 years and older are the most engaged and demonstrate the highest level of organizational commitment, while employees aged 50 and older are the most satisfied with their jobs.

Keeping aging employees on the books may not be as difficult as it might seem. That’s because older workers are continuing to postpone retirement, according to research by the Employee Benefit Research Institute provided by the Health and Retirement Study.

According to a 2012 analysis of census data by BLS, the share of the labor force that is 55 and older will increase to 25.2 percent in 2020.

Performance Appraisal Conundrum

Of the 95 percent of survey respondents that reported receiving an annual performance appraisal, 60 percent say these were made up of a combination of employee and management input.

Samuel Culbert, a professor at the UCLA Anderson School of Management and author of the book “Get Rid of the Performance Review: How Companies Can Stop Intimidating, Start Managing and Focus on the Results that Really Matter,” said performance reviews are indicative of bad management.

“At their heart, they are intimidating, guaranteeing that the subordinate will keep the truth from the person who’s going to be reviewing them,” said Culbert. “It’s only human. Who wants to say something that the boss won’t agree with, only to have the boss turn around and use it against him or her six months later? Nobody, that’s who.”

According to the UCLA professor, it doesn’t matter how an employee is reviewed — by the boss only, by the boss and employee, or by the boss, employee and coworkers.

“No, they all stink. They all lead to dysfunctional behavior. Each one has a different nuance. Take the situation where the employee is supposed to review himself or herself first. The employee’s really in a jam. ‘I know what my boss thinks is my fault. I think the boss is wrong, completely ignorant of how I compensate for my so-called weakness. Now, do I have to mention this, even though I think it’s nonsense? Because if I don’t mention it, I may be graded down for self-candor.’ It just leads to games,” Culbert said.

Employees aren’t the only ones who lose out on performance reviews. So do companies, Culbert said, because the reviews are rarely objective.

“It’s not objective. You want a different review? Change bosses. That’s easy. Because that’s what the studies show. The studies show that the best way to get improvement is to change your boss,” the professor said.

The problem isn’t in performance appraisals as a whole, but rather in how an individual company conducts the evaluation, according to Donna Ronayne, vice president of marketing and business development for Halogen Software Inc.

“Unfortunately, performance appraisals in many organizations…are still very much a one way conversation,” said Ronayne.

The software company’s customers include Safe Auto, PEMCO, Employers Insurance Co. of Nevada and the Injured Workers’ Insurance Fund.

Performance reviews should do more than rate an employee, Ronayne said.

“It (Halogen’s performance appraisal software) also was meant to do more than just rate and rank an employee. It was meant to help develop an employee,” said Ronayne, who likened a performance appraisal to coaching tips.

The company’s system can be set up to allow for journaling capabilities, allowing year round feedback; a feature that may address Prof. Culbert’s recommendation of performance previews versus once a year reviews.

Ronayne said performance reviews aren’t going anywhere and companies should consider an employee’s performance as the hub of the organization.