Understanding the Costs of Employee Turnover in the Insurance Sector
High employee turnover can significantly impact the insurance industry, affecting everything from customer satisfaction to operational costs. Given the complexity of insurance products and the importance of trust in client relationships, maintaining a stable, experienced workforce is crucial. When turnover rates are high, both internal operations and customer services can suffer.
Impact of High Turnover
Knowledge Loss
One major consequence of turnover is the loss of institutional knowledge. Insurance roles often require a deep understanding of policies, regulatory requirements, and systems. When experienced employees leave, their knowledge doesn’t always transfer easily, resulting in slower onboarding, training delays, and gaps in service quality.
Expense
Increased costs are another concern. Hiring and training new staff takes time and money. According to industry studies, it can take six months or more for a new employee to become fully productive. Meanwhile, existing employees may face heavier workloads, leading to burnout and potentially more resignations—a vicious cycle.
Service
Turnover also affects client relationships. Insurance is built on trust, and customers often value long-term relationships with agents or account managers. Frequent staff changes can disrupt continuity, reduce customer satisfaction, and even lead to lost business.
How Companies Can Reduce Turnover
Onboarding
To reduce turnover, insurance companies should start by improving onboarding and training. A structured onboarding process helps new hires feel supported and confident, increasing the chances they’ll stay long-term. Ongoing training also shows commitment to employee development, which can improve job satisfaction.
Career Advancement
Career advancement opportunities are also key. Many employees leave because they don’t see a future at their current company. Organizations that promote from within, provide leadership development, and offer clear growth pathways tend to retain employees longer.
Culture
Workplace culture and flexibility play a significant role. Encouraging a positive, inclusive environment and supporting work-life balance—through remote work options or flexible hours—can improve morale and retention, especially among younger workers who prioritize flexibility.
Recognition
Recognition and feedback are often overlooked but powerful tools. Regularly acknowledging employees’ contributions and providing feedback can help them feel valued and engaged.
Pay
Lastly, competitive compensation and benefits remain fundamental. Employees who feel they’re being fairly paid and well-supported are less likely to seek opportunities elsewhere.
High employee turnover poses real challenges for the insurance industry, from increased costs to decreased client satisfaction. By investing in employee development, creating a strong culture, and offering competitive benefits, companies can not only reduce turnover but also build a more resilient and successful workforce.
If your company is growing and looking for new people, Insurance Relief can find the top-notch insurance professionals you need. We are one of the best in the business, winning a Best of Staffing® award for excellent client service. Contact us to learn more about our insurance staffing solution.
