Good day. Thank you for joining us as we present the results for the Q3 labor market study. A couple of housekeeping items before we begin. Should you have any issues with the video or audio, we suggest simply restarting the application. If there are audio specific issues, you can dial in with your information provided in the email as well. Should you have any questions during today's presentation, please enter those into the toolbar and we'll make attempts to address those during the presentation or at the back end. With that said, I'd like to introduce Jeff Rieder, Head of STG Performance Benchmarking.
All right, thanks and good to be with everybody today. We're excited to present the latest findings of the Labor Outlook Study. There's a lot of very interesting trends coming through here and for those that aren't as familiar with the award and STG Performance Benchmarking, we're a division within Aon's Strategy and Technology Group providing benchmarking and consulting services around really all aspects of the insurance industry, focusing on staffing levels, compensation, business practices, and other areas. If you'd like more information, feel free to visit us on our website. Jeff Blair, I'll hand it off to you.
Thank you, Jeff. Welcome everybody to our twice a year labor study review. A little bit about The Jacobson Group. Jacobson has been the leading talent provider for the insurance industry for over the past 50 years. We support virtually any human capital need you could have, including executive search services, professional recruiting, temporary staffing, and interim experts. Feel free to visit our website at jacobsongroup.com if you'd like to learn more. At a high level, the objectives of our study is to provide an analysis of the labor trends and staffing expectations of the insurance market in the U.S. and provide some insights into some of the staffing challenges that we're seeing by discipline and provide commentary on the insurance labor market. A little bit about our participant profile. As you can see, we have a mix of different carrier sizes, expertise, and also what markets.
To give you an idea of scope and scale, through this process, we are covering almost 15% of the insurance market by employees.
For those that may be interested too, you'll see the average number of companies or employees, I should say, is approximately 2,212, and that would loosely translate on average to companies approximately $2.5- $3 billion in premium range as well. One thing you'll note is that as in prior studies, it's a bit more heavily emphasis on the property and casualty market, representing about 84% of the participants here as well. As we go through, we may skew a little bit towards commentary as it relates to the property and casualty market just because of the profile participant group there. We'll be sure to call out that there are some unique and notable differences that we're seeing between the property and casualty and the life and health market as well.
Where we can start is if we take a look at the overall unemployment rates, as you can see. The national average is at 4.2% and the unemployment rate within the insurance sector is 2.3%. To give you an idea how that compares, insurance is down from a 3.1% unemployment at the beginning of the year and the overall, which was at four, has gone up to 4.2%. The stability of the employment market within insurance has remained strong. There are challenges that come with the low unemployment. It does increase difficulty for recruiting and retaining employees, and it can drive up wage costs. Additionally, it can also limit the industry's ability to grow organically if we don't have enough people in the industry to support the growth. If we look at total carrier employment, it has remained fairly flat.
It's down, let you know, 0.5% since January and has remained flat and below the pre-pandemic results. To give you an idea where some of the growth is coming from, some of the largest growth is coming from the producers, agents, and brokers. Over this last few months we have seen life and health go down by 1%. P&C is up slightly, but overall the industry is fairly flat when it comes to total number of jobs available.
As we look at the staffing plans versus revenue expectations over the next 12-month period, we can see that on a good side that the number or percentage of companies expecting to grow revenue is at 81% with really only a 5% expecting a decrease in revenue. In past years we'd see that the growth in staffing expectations were largely aligned. Now we're starting to see for the same period, now for at least 18 months, that there has been somewhat of a divergence in terms of the companies expecting to grow staff relative to revenue expectations, with only about 53% expected to increase staff. As we look at the trend graph, this gives us a bit of a perspective and I can't believe it's already been now our 16th year of conducting the study.
We started this just as we were kind of going through the recession back in 2008. Back then we saw that the market conditions in terms of overall economic performance relative to industry here, it kind of synced up a lot. We went through that cycle from 2011 through 2020, which was relatively stable before the pandemic in 2020, which then we saw a spike in the percentage of companies expecting to decrease employees nearing 20%. Now as we look at the last three, really four cycles, the percentage of companies expecting to increase staff going back to July of 2023 has stayed right around that 50%- 55% mark. The one thing that is interesting is noting the percentage of companies that are expected to decrease employees during that same period, hovering at 14%.
We've not seen that kind of sustained level near the mid-teen level since the emergence of the recession back in 2010. It's very interesting. There are certainly a lot of color commentary that we can make about this. Again, for the property and casualty (P&C) industry in particular, we had in total very strong sustained growth in premium, not only over the last four-year period, but last five-year period where many organizations grew anywhere from 20% to 40% in premium in many cases. I think what this is showing is that one, that premium was very much driven off of rate growth rather than true organic growth in premium or a policy count or even there was some expansion in the overall underlying coverages.
Companies now are a bit more cautious in terms of their hiring expectations, knowing that the growth was driven off of rate versus, you know, true underlying policy growth. In the last, certainly the last six months, the uncertainty around tariffs and the impact that that was going to have on the business has made companies perhaps a bit more cautious as well. We do know that for many companies they've been exposed to severe catastrophes, convective storms, the wildfires that impacted California the first month or two of this year as well. When we couple that with the backdrop of artificial intelligence and technology gains, we're seeing that in many cases this is perhaps tempering the staffing plans and staffing outlook.
As we look at some of the larger life insurance companies, we've also noted that many organizations have begun to offshore certain activities, whether it's some of the core accounting activities or other activities like that. There has been a shift in larger organizations to offshoring or outsourcing some of those key activities as well. I think as we look at the staffing plans, all of this is coming together to perhaps keep smaller growth in staffing expected. Jeff, I'll let you kind of talk more about these trends here too.
Sure, sure. It is interesting that, you know, 81% of the companies expect an increase in revenue growth and this is an increase from our previous two surveys. I think people, I think our respondents in the market are seeing positive opportunities. You know, I think based on what Jeff was sharing, it is not necessarily aligning with significant staff increases. Now 57% are assuming the primary drive is expected to be revenue changes through market share increase and that varies a bit by product line. Life and health growth is almost entirely being predicted due to market share increase as opposed to getting any sort of pricing increase, which does make sense given the current state of the market.
Additionally, to the factors that Jeff laid out, and I think this applies quite strongly in the health space, it feels like every day different health care carriers are exiting certain markets, which can definitely impact staffing going forward. Regional and commercial P&C carriers are higher than average in looking to reduce staff. I think it does tie into some of our other results around investments in operational efficiencies and things in automation is having an impact, particularly at the lower levels in the organization. If we take a look at the 12-month staffing plan versus actual, the level of gains in the areas that we expected to add staff, we tended to be a little bit more than we expected. Now it's more in the moderate growth, but we are seeing that. Also, the reduction levels in the last 12 months were lower than expected.
I think tying back to something Jeff said earlier, coming off such a strong premium growth year and combined ratio year, it's not surprising that potential reductions may have not occurred because of the financial improvements and the financial results for the year. I also think that we're seeing coming in towards the end of the year that maybe there was some concerns going into this calendar year which may have pared back some of the more aggressive staff increase plans.
This is giving a comparison now against the P&C and the life health industry. What's interesting, you can see on the life health side significantly more percent of companies, I should say, that are expecting to increase employees relative to the P&C side. The dark blue shows the kind of actual staffing plan that happened over the prior 12-month period compared to the light blue, which is showing the plans from a year ago. What we'll see is that on the P&C side, the higher percent of companies last year at this time, 16%, were expecting to decrease employees and that only translated into about 9%. In terms of the expectations to increase, that was pretty consistent on both the P&C and the life side. We did see on the actual staffing for life, about 30% of the organizations actually did report a decrease in staff as well.
There have been, particularly on the life side, the annuity production that has been a challenge for many organizations while it has grown. Whereas on the life side for companies that were focused on life, seeing very strong productions in life premium. Some of this may also be influenced by the product focus within those organizations as well. As we look at the job openings in finance here, we can also see that there's been a notable decrease since the kind of reemergence from the pandemic in 2021, 2022, where we peaked at 393,000 job openings in finance and insurance. The BLS does not break this out for insurance specifically, but I think this is indicative of what we're seeing in our data here with a decrease particularly over the last one-year period, dropping from 327,000- 307,000.
This is an annualized average as we look at the position where we reported from the BLS, that was 246,000 in June specifically. All the trends are really kind of pointing out to perhaps very modest expectations for growth in headcount, particularly as there's fewer job openings, roughly 10% fewer than what we saw at this time two years ago. As we look at the staffing plans, the dark blue is showing July 2025 compared to a year ago with light blue. Not a whole lot of notable changes between the two other than we'll see that both now and a year ago, about 33% expecting to stay flat in total headcount. When we see the % of companies expecting to decrease employees here, we're only seeing 9% expecting less than 2% and 4%, 2- 4%.
What that's telling us is that perhaps a lot of the large reductions in force that had occurred through many organizations over the prior two or three year period are perhaps not going to be as pronounced. There has been recent news from some large national carriers about staffing reductions. When we see the reductions in staff, oftentimes it's fewer than 200 employees or maybe 100 employees or 50 employees here and there. These are significantly smaller reductions in force. In a lot of cases they tend to be areas that are back office support functions, whether that's Finance or occupancy as return to work has limited the need for maintenance staff.
When we look at the growth in areas, what's interesting here is that we'll see a higher percentage of companies that are just expecting to grow staff in that 2%- 4% range, representing about 33% of the respondents here growing in those ranges as well. A couple of points to note here too is that we did see the commercial lines, property and casualty (P&C) companies in particular were noting a greater growth in headcount which translated to about 12 and 9 points higher than personal lines and the balance lines companies respectively. In particular, we'll talk more about some of the changes that we're seeing in the commercial lines sector relative to personal lines as well.
It does appear to be more optimistic for growth in commercial lines and that may be due to the sustained levels of profitability in that sector relative to the personal lines sector as well. As we look at the quick staffing plans on property and casualty (P&C) versus Life, this is a forward looking outlook. Just to kind of summarize the numbers, we just looked at 54% expecting to increase staff on the property and casualty (P&C) side compared to 51% a year ago and then just a slight dip in the life sector at 60% expecting growing compared to 69% a year ago. You can see just a bit more growth on the life side relative to, in terms of number of companies expecting to grow relative to property and casualty (P&C). How this compared by employee size is also notable.
We see some very large discrepancies particularly around the companies that were expecting to decrease employees there on the far right. Here we're breaking up by employee size. Small being under 300 employees, medium being 300- 1,000 and then large over 1,000 employees. There is a very notable difference in the decreasing staff, as smaller organizations only 3% were expected to decrease, whereas you can see 20% to 25% of the medium and large sized companies. That references to some extent organizations that are shifting their business profile, for example those that might be deemphasizing personal lines or perhaps shrinking their footprint for personal lines operations, or in some cases companies that may have both a life and property and casualty (P&C) operation focusing on one or the other. Some of that is really more of an emphasis on focusing on core operations.
Lastly, it is also to note that the impact of a bit of the outsourcing and offshoring is also coming through in particular larger organizations as well.
Okay, if we take a look at the use of temporary employees during the next 12 months, as you can see, 84% are going to maintain, 5% are going to increase, and 11% are going to decrease. To give you some perspective, we are seeing some differences by industry sector within insurance. Life and health actually has the largest, has a much higher percentage increase in temp staff usage, and property and casualty (P&C) carriers and the P&C portion are driving the increase in, or the reduction in, the number of companies increasing their temp staffing levels. The idea of a 5% increase out of the companies that we've in the survey, this is the lowest level of increase we've seen since 2016. While overall, directionally that follows with what we're seeing in the market, automation can be impacting temp usage.
Also, as Jeff mentioned, offshoring could also be replacing some of the areas that temps are being used. We can see some of the lack of increase and more decreasing of temps. Overall, still 89% are planning to increase or maintain their current levels. Voluntary and involuntary turnover percentage, and we're seeing an increase in both voluntary and involuntary at both the 12 and six month window. While these numbers are a little bit higher than we had in the past, they're still well below the professional and financial services benchmarks. You know, when we look and break this out a little bit between industry sector, life and health is driving the increase, and P&C is relatively flat from a turnover standpoint. Within P&C, personal lines has the highest voluntary turnover.
Now, voluntary turnover can also be a result of confidence in the market, employee sentiment, and more willingness to change companies. We saw the largest turnover figures in the larger companies also, and again still within a pretty reasonable range. I think the involuntary, I think there's a combination of things we're seeing. There have been some reorganizations that have driven that, and also as we're in more of a comfortable area from an economic standpoint, I think there's been an increase in performance management and getting back to basics at a lot of insurance companies, which could also be impacting the involuntary turnover. If we take a look at some notable survey trends, the insurance carrier employment expectations increased over the past year. The total headcount grew by 1.37 compared to what we anticipated at 0.58.
One of the things we noticed is there's more volatility in the personal lines, which definitely can make sense given the combination of premium growth and expansion, but also exiting markets. I think the combination has both higher voluntary and involuntary percentages at the same time that the headcount is growing. While we're growing, we also are experiencing turnover. Essentially, we are seeing some change here. Now, when we start looking at different jobs and job families overall, if we look at this, the difficulty as it was rated in these different areas is down in the last six months, or last 12 months, I should say, in nine out of the 12 categories, but the majority remaining above the five, which is where we see difficulty. I think that there is more market stability, which does increase employees' willingness to move, which can create some openings, can create turnover.
At the same time, depending on the type of role, there are definitely some significant challenges. The difficulty in recruiting is particularly high for executives in life and health and in personal lines and with regional carriers. Actuarial and technology are of a particular challenge in the personal lines.
This is just looking at the ability to hire talent now compared to a year ago. The good thing here is that we see only 11% of companies responding that it was moderately worse and 1% significantly worse. I think this really just kind of reemphasized what we were just seeing a moment ago on the difficulty in recruiting challenges. Most of those areas were coming in lower and this reflects this as well. Compared to a year ago, the number was about 11% for the companies that were anticipating that, saying that was more difficult to hire. That's essentially staying about flat. Really good to see that. As we remember back during the pandemic, we were seeing that many companies, more than half, reporting the difficulty in the very challenging labor times.
The one thing that will kind of reflect as it relates to compensation levels is that all of these trends are also resulting in more stable compensation programs, if you will. What I mean by that is in 2022 and 2023 we were seeing significant challenges as it related to companies to maintain competitive compensation levels. Many organizations had to make significant increases in pay levels. In some cases it was for whole job families. At the times in particular we were seeing areas like claims, workers compensation claims in particular, but just claims in general. We saw spikes in underwriting and business development staff where companies were needing to make significant mid market cycle changes and things like that.
That has leveled off significantly over the last year where while companies are certainly maintaining competitive compensation programs, it's not like they're chasing the market the way it was perhaps two years ago.
Jeff, is this one yours?
Oh, okay. Yeah, that's okay. Sorry about that. Yeah. This is just looking at the level of difficulty to recruit by staff and are likely to increase by staff. Really interesting here, two trends that pop out significantly. One is you'll see technology. While it ranked as the number one function, the life organizations marked by that gray bar were responding as the number one area that they were likely to increase staff. If we transpose that to the P&C industry though, you'll see the underwriting function would have actually ranked number one, with the balanced and commercial lines focused companies expecting to grow there and process. Not too surprising. As we've pointed out, some of the changes in commercial lines, there's been an emphasis on companies that may not necessarily just carrier, but a growth in MGA and MGU carrier, or I should say underwriting staff appointments.
As companies are looking to expand their underwriting footprint, in some cases it is new product lines. We've also seen a growth in the specialty and excess and surplus line space where traditional carriers are now entering that market. In some cases it has been through acquisition, but in other cases it's acquisition, I mean company acquisition. Now companies are also looking to build those teams organically, and certainly in personal lines, we wouldn't expect that. Where that is, the underwriting function is highly automated. On the life side, certainly there wouldn't have much of an impact for annuity writers. We're also seeing the expansion of accelerated underwriting programs, which is why perhaps we're seeing more of that investment in technology to offset that.
The other piece I'd add, with technology for the life sector, we have noted that there has been a significant uptick, particularly in the last two year period for core system replacements. The P&C industry really expanded on all those core systems starting back in the late 2000s. Through the 2000-2010 cycles is where heavy core system replacements went into place to replace those legacy systems. Now we're seeing that on the life side. Another component that does stand out here as a bit of a surprise is the sales and marketing, where for a few cycles we were seeing that business development activity spiking up and that has now dropped to the number six function. Offsetting that has been the analytics and actuarial activities.
These would be, as you would expect, your business intelligence actuarial sciences for pricing and product development activities to some extent, but that's more in product management. Also, now as companies are investing in artificial intelligence and the applications there, that tends to fall within this analytics function as well. We should expect to see a high emphasis on the need for staff in analytics. Just one last piece is claims kind of sticking there in that number three spot that has been historically kind of back and forth between two and three in many of the cycle iterations. It's pretty consistent across all levels of, I should say, all product focus, if you will. Many of you may recall that certainly claims frequency dropped significantly in the 2020 and 2021 cycle as business and broader economic activity was slowed during the pandemic recovery stages in most cases.
Now we're seeing that claim frequency has rebounded back to normal levels or even slightly higher as well. What's been interesting is for many carriers there had been a reduction in claim staff during that time period and they lost many individuals, which is now requiring some organizations to rely more heavily on third party adjusters to meet the claims demand. We're also seeing that with the growth in wildfire, the severe convective storms, et cetera, the organization companies that have large property exposures are building out their catastrophe teams again and those had to some extent been reduced in size or scope significantly over the prior 15 year period. Now those property catastrophe teams are being a heavy focus as well. That can also be impacting some of those claims staffing levels too.
One of the things I wanted to add here too, when we're looking at increasing staff, it's also what level of staff, and what I thought was interesting is there seems to be some consist by sector where, for instance, the vast majority of the tech staff that people are looking to recruit or to add is at the experienced level, less than 10% is entry level. Essentially competing for all the same resources. If we look at underwriting, 75% are looking to only add experienced underwriters. Where I saw a little bit of a difference was life, health, and personal lines are looking to almost 50% of their hiring as entry level, which is interesting given a lot that's being invested in the technology, but also points to sort of a shortage of enough experienced underwriters.
I think particularly in the health, life, and personal lines there is some increase in bringing in entry level underwriters. If we look at the likelihood that we're going to be increasing staff, our results are saying 10 out of 12 categories where our survey shows that companies are going to be increasing staff. P&C, the largest increases from 2024 are both in operations and executives from a percentage standpoint. For P&C, the largest decreases are in loss control and claims. To give you an idea of where from a broad picture, interestingly enough, apparently accounting has popped up on the life health for largest increase in needs, and there are some decreases in overall underwriting and sales and marketing. While across the board, we're not at levels that we were at in previous years, we have seen a slight increase in comparing year- over- year.
This kind of speaks to your comment too, Jeff, regarding the level of employee coming in. Overall, we can see that companies were expecting to increase, or I should say add employees, 20% at that entry level position. This is up a little bit over the last, certainly since our January cycle. You can see operations folks, which makes sense. Those are call center, typically your entry level type positions. 44% would be entry level claims due to some of the challenges in labor. 29% are expected to be entry in terms of the competitive environment there. What's interesting, as we look at the areas that were more focused on entry levels, including the underwriting, actuarial, accounting functions, the flip side of that, for technology, only 8% of roles are expected to be filled by entry level positions.
Some of these areas around, whether it's technology, compliance, or product management, as companies are looking to add experienced staff, that oftentimes will have an impact on the compensation levels there as well. Meaning that in some cases there you'll be filling positions with incumbents that might be coming in at a higher level than the outgoing individual as well. I think it's good to see that there's more of an emphasis on those entry level positions that may require companies to invest more in their training programs as well to support that as well. Typically, training is one of those areas that when times get tough in terms of meeting financial projections and growth, training tends to fall a little bit to the wayside. Hopefully, this means that there'll be more investments in training programs as well.
As we look at the reasons for companies as they are increasing staff, and this will add up to more than 100% because companies could respond to multiple responses here, 35% of those organizations that will be increasing. Again, this is 35% of the roughly 50% expansion into new markets or new business, compared to 32% showing an increase in business volume and 23% reflecting that the area was currently understaffed. One thing that came out loud and clear as we look at the individual results by a company, the commercial lines sector in particular was responding at a significantly higher level of the expansion into new business or new business markets. That is again, not surprising. Again, reflecting on the specialty E&S and some other market spaces that have been significantly more profitable.
I believe now the E&S space represents more than 25% or roughly 25% of the overall commercial lines premium, which has more than tripled over the last 20 years in terms of the percentage of business. There's the other piece that as we look for the personal lines side, it has taken a good solid two years for companies to implement their new rating and pricing programs to reflect the essentially to meet their profitability targets. Now that we're seeing the personal lines sector back to historical profitability levels, we are starting to see some of the first lines companies responding that they're expecting to grow business and that'll be through policy count growth and things like that as well. That tends to be right now more focused on the larger direct and captive agency organizations that are focusing on growth in personal lines.
Whereas with many of the independent agency companies, there's not as much growth that we're seeing there relative to the direct and captive peers. Looking at the staff decreases here, while there were fewer, again only about 14% of companies expecting to decrease staff, many of the primary reasons given were automation requiring fewer staff and staffing reorganization. You can see 7% also overstaffed, which may be due to the improvement in automation as well. Again, fewer companies expecting to decrease staff, but those were the leading reasons as well. In terms of flexible work hours that are being offered, we can see that the vast majority, we'll say 85%, are offering flexible work hours and just more broadly, flexibility in work, no surprise, has expanded significantly. Only 15% of respondents here have that they do not offer flexible work hours.
While it's not a direct compensation element, Jeff, I think you can particularly speak to the impact of flexible work hours and remote and hybrid work environment, the impact that that has on recruiting and retaining staff.
Yeah, I mean, I feel like I'm saying this on a regular basis, but the genie is out of the bottle and it is a real factor depending on what the environment the candidate is coming from and what the environment is at the recruiting company. If we are moving from a hybrid or remote to in office, all can be a significant challenge. There are people who want to be in an office and that is not an issue. For those that have already moved out and have this sort of flexibility, you know, I'm counseling clients that this does have a compensation impact. It's viewed as a perk or a benefit that could be taken away. It's also in the other direction, can be viewed as something that provides more flexibility if you move from a more restrictive to less restrictive.
I think the other piece too is, I think there is a broad range of solutions we have. It is a smaller percentage of the market that requires all their employees to be in the office five days a week. There are companies that are very successful with that. As we're saying, we're seeing that the majority offer some sort of flexibility and part of it is really to be able to open yourself up to a larger job market. That is increasingly important when we're looking at current employment levels, the needs we need in specific areas. This flexibility goes a long way in finding good candidates.
Yeah, I think the next slide also kind of gives that view on the in-office expectations. I was a little bit surprised to see the increase there on the far right in terms of 8% of organizations expecting to require every day full-time office environment versus the number or percent of companies that are in one to two days versus three to four days has still been kind of hovering right around that 70% mark, actually coming a little bit above that at 78%. What's interesting is I'll be curious over time if this changes a bit based on the experience of the employee or the tenure of the employee. Jeff, I don't know if you have any market intelligence of what you're seeing there, if companies are moderating that by experience.
I know for some organizations they're doing it at the executive level where they're requiring executives to be in office at least four days a week, if not five. Have you seen any changes in how companies are adopting that?
Yes, I mean, I have seen an increase as we move back that at least the top team is expected to be in the office four or five days a week, relocation if that's required. There's likely either an equal or a little bit less expectation at lower levels. I think the challenge is, you know, there are exceptions and some companies have taken a very hard line on exceptions, but there is still some movement in this direction, I guess. Jeff, one of the things I'm interested in your view on is, is this, are we reaching the end of this part of the transformation? We had this jolt with COVID and then in pandemic and then there was a push to get back into the office, it slowed.
Are we reaching the end of the transition or do you think this is the new normal and companies are going to move across this spectrum?
Yeah, I think personally I actually do think we're probably near the end of that. There's in fact an article that came out today with a large national organization that was kind of pushing for in office and had to retract a little bit. I've seen that from a handful of companies. I'd say the biggest difference is it's easier for smaller and rural companies to adopt the in office experience. They'll often always make exceptions for key positions where they're trying to get, say, an actuary or underwriter or even.
You.
Know, a nurse case manager as an example where they're looking for specific skills that will require them to look on a national basis. At least at this point, I think that we're probably closer to stabilization of where companies are going to land on this issue in particular. The other piece is there are some real cost benefits that can't be ignored. I joked around about the occupancy and maintenance or kind of commented about that. It wasn't too long ago, you know, 10, 12 years ago, that for most organizations they were spending about 1.5% of premium just on their occupancy or footprint for that specifically. That number has dropped drastically to where most organizations are now spending less than 0.5% and sometimes even only 0.3% of their premium on occupancy costs.
That does translate into real savings, real benefits to the policyholder in terms of providing some pricing competition as well.
Right. I think the other thing too, you had mentioned the home offices that are in smaller locations. I mean, these are essentially, they can be like company towns, and even when people were working at home, they weren't hiring nationally. For the most part, they stayed local. It is a different transition to bring employees that were specifically in the office back into the office, and they're all local. I think what we've seen is quite a bit of the industry use this opportunity to do more national hiring or regional hiring, and then it becomes much more difficult to put the genie back in the bottle at that point. Yeah.
The last piece here, as we're looking at the expectations going forward, only 6% of companies are expecting to see employees in the office more, whereas 93% expect the model to be about the same. I think this speaks to our earlier conversation that we're probably closer to where we'll end up just based on these expectations as well.
I do want to talk to the companies that are going to require people to be in there less. I'd like to know a little bit more about that. Okay, in summary, 53% of companies plan to increase staff in the next 12 months. As Jeff pointed out earlier, life health is at the highest level and 14% are planning to reduce the number of employees. This is the same total, it's relatively flat. 66% of small companies, so smaller, plan to add staff in the next 12 months. This is higher, this is 10% and 29% higher than medium sized companies respectively. That is sort of from a staffing standpoint. From a revenue standpoint, as we said earlier, 81% are expected growth and that is a higher expectation than seen last July.
Personal lines, property and casualty (P&C) are the most optimistic and 94% expect growth compared to in the 80s and into the 70s for other P&C lines of insurance. I think that also tracks with what we're seeing in the market, what we've seen with rate relief and what's going on on the personal lines. 89% of the life health companies expect an increase in revenue and as I mentioned earlier, coming mostly more market share increases. The primary reasons the companies are looking to expand staff is business at new markets and an increase in expected business volume. The higher premiums raising appetite, driving more business in and automation, as we would expect, is the most common reason companies plan to reduce headcount in the next 12 months.
I think the conversations that I've been having and the things that I've been seeing, the automation, a significant amount of the automation is not wide scale. It is more scaled for specific tasks, jobs. You're not seeing double digits reductions in headcount because the smaller investment automation improvements are getting their ROI but on a smaller percentage of employees. Additionally, looking at overstaffing, that again could be automation but also I think there is still a little bit of a post pandemic hangover where there was so much hiring and now even as results have become strong there are instances where it's out of line with staffing and adjustments are being made.
As we look at the areas for growth, technology, underwriting, and claims roles will be expected to have the largest growth levels over the next 12 months, and compliance, product management, and technology are areas where companies are most likely to add experienced staff compared to operations and claims roles having more likely to add entry-level positions. The actuarial, executive, and analytics functions remain the top three most difficult areas for companies to recruit for, and that is now the fourth consecutive survey period where those have all been consistent. In total, 12% of companies feel the ability to hire talent has become more difficult compared to the prior year, and that is up from 11%. Very negligible increase there. The six-month turnover was 6%, which was 3.2% lower than the 12-month average turnover of 9.2%.
The average involuntary turnover was also just slightly lower at 4.2% compared to 4.3% at the 12-month cycle. During the next six months, 85% of companies are expected for most of their employees to work a hybrid schedule, and after the next six months, only 6% are expecting to change their approach requiring employees to be in the office more. Lastly, 8% of companies will require their staff to be in the office every day, and that is up from 4% in July last year. As we aggregate all the information here and we look at the staffing expectations over the next 12-month period, this would translate into an anticipated increase of 1.03% in industry employment over the next 12 months, creating more jobs. As we look at that by sector, not a whole lot of difference between the life versus P&C, both hovering right around 1%.
We did note that the P&C balanced organizations in particular were expecting to grow 2.4% and balanced commercial lines up about 1% compared to about 0.75% in the personal lines space. We will be conducting this survey again next January and will likely have those results ready for publication in the first or second week of February. If you'd like more information about how to participate, feel free to contact vince.albers@vincent.albersann.com. We did get a couple of questions and have some time for those as well. There was a question that came through on do you have information on salary difference between personal and commercial lines specifically for claims and underwriting positions. It's a good question. What's been interesting, we have seen those salary differences narrow over the time historically going back 10 or 15 years.
The commercial lines, underwriting and claims positions for that matter often have commanded higher levels. There has been less of a difference. Commercial lines still does typically have a slightly higher level in the total increases in salary, but not quite to the degree that it had been many years. In part, part of the reason for that is personal lines underwriting has been very much automated. The positions now that are being recruited for are sometimes more complex, that it's a portfolio manager or territory manager, require more skills around the broader aspect of personal lines versus individual underwriting, individual account underwriting aspects. Claims, the more notable difference has been particularly around workers compensation claims where that role has been in particular in demand in the past couple of years, but not as much of a difference as what we had seen in the past.
There was a question, we unfortunately didn't have enough information on the health sector specifically to track projected growth levels there. We do not have that piece. The question also came through in terms of retirement expectations within the insurance industry. What's interesting is the level of retirements for, and Jeff, I'll let you come in if you see anything different. We've seen the percentage of employees, we do a separate study. The percentage of employees over the age of 60 and over the age of 70 have continued to increase and has become a large proportion of the employee population. We have noted that for most companies, when they track the retirement levels on their turnover levels, it typically now is 2- 3% for retiree turnover, which is significantly larger than historical levels.
We do anticipate with the still increasing of the baby boomer, which has become a smaller and smaller portion of the workforce, we'll likely see that retirement specifically will likely be 2- 3%. In terms of affecting employee turnover over the next year, probably in the next two to three year cycles as well. Jeff, I don't know if you've seen anything different for that as well.
No, it's an interesting topic because I think there's been identified a challenge in the insurance industry of we have the senior leaders and experts and people with significant experience and then there's a gap and how are we going to close that gap? I think we've avoided the issue a little bit in that people are working longer, especially over the last couple of years where there was, you know, maybe retirements weren't as likely, it wasn't financially as sound. People have hung on. Now, the question is, are we going to start to see an increase or a catch up on people that maybe would have retired previously but held on? I feel like that, you know, let's watch the 401(k)s and that's going to, you know, when people are able to retire.
One of the things that we talk about with our clients quite a bit is this potential expertise gap and how do we make sure that the individuals that are getting close to leaving the organization, leaving the industry or getting ready to retire or people that are in that frame, how are we getting the best development of successors, knowledge transfer? I think the reality is we're not going to be able to solve this problem by recruiting people from other companies. There's going to be a shortage in this group and I'm hopeful my generation, the Gen X, can step in for the boomers that are leaving. I think that is a challenge.
All right, I know we are at time and appreciate everybody for participating. Your information, your responses provide great content, and we hope this is informative for you as you think about staffing plans and models there. On behalf of Aon, we'd like to thank you very much for participating. Jeff, I'll let you close it.
Yes. Also, thank you everyone for taking the time and filling out those surveys. Looking forward to connecting with you again. We're going to send out the materials, and please feel free to reach out if you have any questions. Thank you, Vince, for your help and Jeff, and look forward to our next webinar. Have a great rest of the day, everyone.