The top recruiting challenges for insurance firms in 2025—and how to overcome them

The insurance industry is facing significant recruitment challenges. With pressures from an aging workforce, rising candidate expectations and tougher competition for talent, plus a skills gap fuelled by technological advancements, it’s clear there are many obstacles in the way for insurance businesses looking to hire this year.  

With these recruitment challenges having such a large impact on many firms in the industry, our latest Davies People Report sought to explore the top hiring challenges. Here, we’ll be highlighting the top six issues that came up, and sharing ideas on how firms can turn these obstacles into opportunities.  

1. Salary and benefit expectations 

A competitive job market is a challenge in itself, but it also comes with many knock-on effects, including higher salary and benefit expectations from candidates. This is adding extra pressure onto firms to be competitive, with our People report finding that almost half (43%) of organisations say they struggle to meet candidates’ salary demands and 36% say their benefits offering isn’t compelling enough to differentiate in a crowded market.  

Since the pandemic, employees and jobseekers have become much more concerned with having their expectations met, and we have observed a shift between the employee-employer dynamic, where employees and jobseekers are driving high demand for purpose-led organisations that align with their own personal values. This means that employees can afford to be choosier in who they work for, and firms are certainly feeling the impact of this, with almost a quarter (24%) of organisations citing this as a hiring challenge.  

For firms to compete in this fierce competition for talent, the pressure is on to ensure pay aligns with roles, responsibilities and is in line with what’s being offered on the market. These should also be regularly assessed to keep colleagues feeling valued, and motivated to stay with the company. Similarly, firms need to curate a generous and competitive benefits package that aligns with the needs of employees and jobseekers today. For example, in this new era of flexible working models, firms who offer neither hybrid nor remote work are struggling to retain their staff and failing to attract top talent during recruitment. Whatever you decide to include in your benefits package, be sure to tailor it to the needs of your own workforce, rather than mirroring what other companies are doing.  

2. Workplace flexibility 

The world of work has become a lot more flexible over the past few years, with estimations revealing that global digital jobs are expected to grow by around 25% to over 90 million roles by 2030. Alongside this, the demand for hybrid working is also up—with figures reporting more than a quarter (28%) of working adults in Great Britain were working hybrid during the tail end of 2024. But, for a minority, office-based working is their main preference.  

While having an array of working options has its positives, we found that it is also causing an obstacle for some firms. Our report revealed that 38% of organisations struggling to offer the desired balance between remote and office working, creating an additional barrier to attracting talent. Firms can overcome this by limiting the restrictions (where possible) and maximising the flexibility aspect of “flexible working”, giving their colleagues freedom over their working locations—for example, by allowing remote working when no face-to-face meetings are taking place and keeping the office open five days a week for any colleagues who do wish to come in. By enabling the aspect of choice, businesses will show value, consideration, and trust towards their colleagues, proving more likely to attract and retain talent.  

3. Career progression transparency  

Improving career prospects is becoming increasingly important to the modern workforce, with our study finding half of the respondents indicating they are ‘…continually looking for new, or better, employment opportunities’. This was particularly true of those aged 18–24 (58%) and 25–34 (56%) age groups. Additionally, 65% agreed they would like better access to advice regarding career progression and professional development.  

This means it’s crucial for firms to be upfront from the get-go on what the progression path could look like. So, be sure to have clear career paths with defined roles, responsibilities, and routes to progression, and to be explicit about this with your existing workforce, and candidates. Similarly, letting candidates know if you have any personal development programmes such as training programmes or mentorship programmes, and what learning and development initiatives you have on offer will help them to envisage what could be achieved.  

4. Perceptions of the industry  

One of the main recruiting challenges for the insurance industry is based on how people still perceive the industry. Our research revealed that 61% of professionals believe insurance still suffers from an outdated image, which makes it harder to attract young, diverse talent. And despite already making headway in creating an environment of diversity and inclusivity, by changing the narrative of the industry being dominated by white, middle-class males, and working to repair the trust the industry has failed to build previously, there are clearly still some outdated views around it.  

With transparency and strong moral values so important to the younger generation in today’s workforce, it’s important for insurance firms to address common concerns and highlight the positive aspects of the industry. For example, by committing to simplifying policy language and transparent pricing models and structures. Similarly, adhering to ethical practices and being upfront about mistakes you may have made previously, and how you have or will correct them, will be much more appealing talent. Not only is this important for tackling recruiting challenges, but also for compliance with industry regulations that place a lot of value on transparency.  

Similarly, firms can encourage younger, more diverse talent into the industry to tackle the aging workforce by providing opportunities to kick-start their career without holding industry-specific qualifications prior. This can be done through apprenticeship schemes which show candidates what the industry is truly like and the opportunities it offers, while preparing candidates with future-proof skills and supplying knowledgeable and credible employees for the business.  

5. Digital skills shortages 

While the rapid advancement of technology has provided a great opportunity for the sector to innovate and modernise, it’s also placed a lot of pressure on workforces to have the skills needed to properly leverage these new technologies. In fact, 63% of senior managers in our study acknowledged that there was a digital skills gap in their teams, with 30% of them describing it as a “very serious issue”.  

Addressing digital skills shortages in the insurance industry involves a combination of strategies to attract, develop, and retain talent that hold the necessary digital skills. For example, more firms need to be investing in training and development with initiatives like digital learning programmes, and encouraging certification—maybe even covering the cost of qualifications, if they’re in a position to.  

Insurers can also collaborate with educational institutions to create specialised courses and programmes tailored to the needs of the industry. Similarly, for improved talent attraction, firms should be willing and able to offer competitive salaries and benefits to attract and retain talent with these skills. Not at least meeting the market salary rate for these skills will see your candidates taking their highly coveted skills elsewhere! 

6. Untapped talent pipelines  

Despite 85% of employers saying professional apprenticeships foster loyalty and long-term career development, our study found that only 57% currently run these schemes, highlighting that many are still missing an opportunity to grow talent from within.  

Apprenticeships are shaping the future of work in insurance, delivering great value for both the organisation running them, and the apprentices themselves. By removing the need for university degrees and certain qualifications, insurers can uncover fresh, diverse talent who are open-minded to the industry and can be trained to provide the skills the industry requires.  

These six recruiting challenges are at risk of holding the insurance industry back. But it’s not too late for employers to turn it around. Insurers should be embracing the change we’ve seen to the world of work, being guided by what the jobseeker wants—transparency, clarity, and high moral values.  

By standing against the stereotypes of the industry, focusing on the creating fruitful opportunities for young, diverse talent, and embracing the technology we now have available to us, firms can evolve their employer brand and face the challenges of hiring with confidence.  

Need help overcoming the recruitment challenges of your business? Our Talent Solutions team are experts in both finding specialists to plug the gaps in your workforce and developing the talent you need to take your business to the next level. Want to find out more? Get in touch today.