Good afternoon. Thank you for joining us for today's presentations of the Insurance Labor Market Study. We'll begin in just a couple of moments, but a few housekeeping items. If for any reason you have some issues with any of these systems, we would just ask that you please restart using the link provided. If for any reason you have challenges with audio, again, you can certainly dial in using the telephone number that's provided as well. Keep in mind that if you do have some questions during today's presentation, we'll make every attempt to address those on the call. So please submit those using the QA option on the toolbar provided. And again, we will try to make those answers while we are in the presentation or at the very end.
Outside of that, I just wanted to also let everybody know that we will be distributing the results presentation along with all of the other materials and recordings over the next couple of days, so be on the lookout for an email coming out through that, so at this point, I'd like to present Jeff Rieder, Head of STG's Performance Benchmarking Group with Aon, to kick things off.
All right. Thanks, Vince, and good to be with everybody here today. We'll just briefly, for those not familiar with Ward and STG within Aon, we are a benchmarking division that specializes in the insurance industry, performing various levels of staff, compensation, and expense and business practice benchmarking. For more information, you can feel free to visit our website there, and I'll turn it over to Jeff Blair, who is from Jacobson Group.
Hello, everybody. Thank you for joining us this afternoon. Quick little bit of info about the Jacobson Group. Jacobson Group is the leading provider of talent to the insurance industry. And we offer executive search, professional recruiting, temporary staffing, and interim experts. So virtually any need that you might have, you can capitalize in the insurance industry. And also feel free to visit us online.
All right. Go ahead, Jeff. Go ahead and kick us off. And I think for many of everybody here, it's welcome to you. I think handing over from Greg Jacobson. So we're great to have you on the study today or presentation today.
Thank you. Big shoes to fill. We'll see how I do. Okay. So just overall, some of the objectives of our study is to analyze current labor trends and future staffing expectations in the insurance market, provide an overview of some of the staffing challenges that we're seeing and that were shared with us through the survey by discipline, and also provide some commentary on the industry's overall labor market. Once again, I'd like to thank all our participants on the call. We've had strong participation again for this survey. As you see, we have a nice mix across business sector and also by company size, which I think has given us some pretty robust results to share with you today. Okay. Go to the next slide. Excellent. So now we're going to start hitting you with the data to help you understand where we are.
Good place to start is to see how the overall unemployment rate has behaved over the past year and how the trend is going. The industry unemployment rate continues to stay below overall national averages. And just to give you some perspective, over the course of 2024, if you averaged the unemployment rate in the insurance-related sector, it was 2.1%, which is only up from 2.0% last year. So remaining below the national averages and fairly flat year over year. And if we look at the overall insurance carrier employment, remaining relatively flat over last year and still coming down from the peak of pre-COVID. Okay.
Yeah. And I think as we look at the kind of revenue expectations too, it's very interesting to see how this is changing over the last few years. The decrease in staffing there on the left, or the increase in staffing and decrease in staffing, only about 12% of companies are responding that they're expecting to decrease staff over the next 12-month period. And about 13% are expecting to maintain. When you look at that with the 55% expecting to increase staff, how that correlates to the revenue expectations, this has been interesting that for many of you that may have participated in some of these studies in the past, we saw that the expectation to grow staff and revenue were very highly correlated. But that is moderating a bit, where with 74% of companies expecting to grow revenue over the next 12-month period, only 4% decreasing.
Normally, if we were looking back 10 years ago, we'd see that typically that had a direct correlation of almost, we'll say, roughly 60%-70% expecting to increase staff, and that's not really holding true here in the last really three cycles now of the study. As we move to the next slide here, we can see how this is changing over the time period that despite the revenue growth expectations, 55% expecting to grow staff, it is up slightly, but really it's a relatively small number. You can see it's down significantly from where we were kind of emerging from the pandemic. Still at 55%, that tracks about on par with what we've seen over the last, we'll say, 10-year period.
For many of you, you may recall that we started this study back in 2009 as we were emerging from the recession at the time. One other, perhaps a bit of a surprise, is still seeing the percentage of employers that are expecting to decrease staff at 12%. I think as we go through here, we'll see that there are perhaps different factors that are impacting that. We've had a lot of questions that came through in terms of the impact of artificial intelligence, automated processing, and how that's impacting certain areas. In general, the automation that companies have put in place, really those major system changes that occurred, say, since 2015 and still continue, we are seeing that those are having some significant improvements around areas for policy processing, data entry.
Certainly, we have things that respond to policyholder inquiry, billing inquiry that can be handled through chatbots and other tools like that. So there still is that perhaps somewhat impacting these staffing plans are that companies are expecting to still gain greater efficiency. Also, as you think about, particularly for the property and casualty market, that much of the growth in revenue that has occurred over the last three-year period has been more related to growth in rate rather than growth in unit counts. So to some extent, as companies have repositioned their portfolios, specifically those companies that have exited or paused on their personal line of writings, these are perhaps still coming through that now they see that with fewer policies, that means there's fewer claims, there's fewer calls, and things like that that still appear to be impacting these staffing levels.
And then the last piece I'll add to that is, despite the improvement in the general economy, especially as we recover from the hyperinflation in 2023, that there still is some uncertainty around profitability. And in the Q4 , we know that the storms that came through with Milton, Helene challenged those carriers that were operating in the south. And then we know that the wildfires having a significant impact in California and related exposures there still remain a challenge. So I think broadly, while we are seeing some, I'd say, pause in terms of significant increases in headcount, that may be just more broadly due to good, but still perhaps a little bit of uncertainty in the overall financial situation here.
We'd like to share a little bit about the 12-month staffing plans regarding the increase versus expected revenue growth. 74% of the companies that we surveyed are expecting revenue growth. And while this is a significant number, it is down a little bit from last year. In nearly 50% of the responses, increases are really being laid at the feet of increased market share, which is really driving growth. There is a slight increase in the number of companies expecting to decrease revenue year over year. And this tends to be focused in the personal lines carriers, or the P&C carriers that have a balanced portfolio, including personal lines. And it really ties into what Jeff was sharing, the impact on the personal lines business in the last year. From a staffing standpoint, 12% expect to decrease staff size, which is down from July.
So I think overall, fewer companies are looking to do that. Expected increases in staff are highest in our P&C commercial carriers and our balanced carriers. Additionally, the national carriers seem to have bigger plans for increasing staff. Expected reductions in staff are highest in personal lines and also in life and healthcare. One of the things that struck me as I was reviewing this chart is overall, the folks who are filling out our survey do a pretty good job in projecting. I think what you're finding is the overall staffing plans for 2024 were fairly close. Now, you're always going to get the maintains. Some are going to slip above, some are going to slip below. But what we saw is more than twice as many companies added staff than reduced staff last year. And I think you can see that through the chart. Okay.
Yeah. I think the piece here is we're looking at some of those staffing expectations. One note, you can kind of see the vast difference, if you will, between the actual staffing and plans between the life and health industry there on the right versus the P&C industry on the left. But the biggest change was just looking at what actually happened versus the expectations last year on the life side, with 40% of respondents decreasing was a pretty notable difference. The other piece that we also saw on the P&C side, similar trends, not quite to the degree that we saw on the life and health side, but 19% of companies actually having a staffing decrease compared to what was expected to be only 10%.
In some cases, we know that there were some of the larger companies that were public about the information and some of the decreases. But I think one of the larger things that we see as a common theme going through here is just on that kind of portfolio rebalancing that happened on personal lines that really had a significant impact for a lot of companies. What was unique, though, for 2023, I'll say unique, but different compared to the prior years. In 2021, 2022, and 2023, companies were not able to meet their staffing plans because of the very significant recruiting challenges. There was a lot of turnover that was occurring. And as we'll see here later, turnover still remains high, but it has improved.
But where in the past, some of the challenges for companies to meet their staffing plans was due to their inability to recruit and onboard people as quickly, now we're seeing that in 2024. This is likely more reflecting what I would term be trying to maintain efficiency in their expenses and reducing headcount intentionally versus not being able to meet their staffing plans. And then on the next slide here too, this just gives a view in terms of the job openings in insurance and finance more broadly. So we'll see that the job openings here have relatively kind of consistent with what we're seeing. They're down a little bit from 2023 in terms of the annualized average, only going from 346,000 to 342,000. But we did note that in December, specifically, that number has dropped to 291,000.
While that is, we'll say, roughly 50,000 fewer openings at the end of December 2024, that has historically been consistent in most years that the December number is generally lower than the overall annualized average. So I guess the general theme here that we're seeing emerge is there's probably going to be a bit more, well, I'll say stability in terms of hiring. We probably won't see massive increases in those hiring expectations. And I also do want to touch on that as we think about, yeah, we talk a bit about the property and casualty segment, but in the life segment, there's also been a lot of companies that have also done some of the changes. We've seen some mergers, and I don't say mergers, but acquisitions and sale of businesses recently from a number of companies that are exiting pension risk transfer.
We've seen some that are getting out of the employee benefit space and things like that. So a lot of this appears to be kind of that shifting more broadly where companies are focusing on their core businesses. But pretty interesting just to see that the trends here kind of moderating quite a bit from that peak in 2022. All right. And then I know on this slide here, we're looking at the kind of expectations for 2024 compared to 2025. So this is, again, looking at that January to January lift there. One thing I'll note is the percentage of companies that are decreasing employees has still been pretty consistent in terms of what their expectations are. We're just seeing that the number of companies that are maintaining size there just grew slightly.
What's really interesting is that when companies are expecting to grow, we're generally in that, say, 0-9% range in terms of total headcount. Overall, it's been pretty consistent here in terms of looking at the staffing plans in aggregate compared to just about a year ago. And Jeff, I think one of the things, one of the questions that came through here is, are we expecting any changes in hiring as it relates to any of the kind of recent changes from the government, whether it's the impact of tariffs or anything like that? I don't know if you've seen from your view, kind of hands on the ground, has that changed anything directly in terms of what you're seeing more recently in any of these figures?
I have not seen anything on the ground. I think the uncertainty has probably caused quite a few meetings, and there's a lot of discussion, but at this point, I haven't seen anything because I think there's a lot of unknowns that still need to be worked through.
Yeah. Yeah. I agree with that. We have seen, particularly as it relates to some of the concerns around tariffs, again, just adding to a little more uncertainty that is giving some companies some pause. The biggest challenge that that could have, particularly for property casualty companies, is on the impact of claims. And similar to what we saw in 2023 with the hyperinflation, some of these tariffs could also cause those claims costs to increase. And I wonder if that's going to give some further pause to companies going forward as well. But great question. All right, Jeff, I'll let you get back to this question here or this slide here.
Okay. Wait. Sorry. So if we look at the 12-month staffing plans here, what we're seeing is overall that there is a plan to increase staff in property and casualty. And you see even higher for those that we spoke to on the life health side. But what's interesting, what I found interesting is it really seems to be a tale of two cities with life and health because we have the highest group of increasing staff, and we also have the highest in decreasing staff. So I think there's pockets here in some of the different things that these companies are facing in the market.
And some of the issues that Jeff brought up previously, I think, really point to it really starts to become specific to those lines of business. Again, going in from a property and casualty standpoint, relatively flat year over year, but slight increase on the increase in staff, and again, tying back to something we provided earlier, it's really about gaining market share, which is driving us.
Yeah. I think as we look at the impact on some of these figures by company size as well, we essentially have broken this out between small, being companies under 300 employees, medium 300-1,000, and then over 1,000. And what's interesting to see here, for whatever reason, this has been a consistent theme in terms of when we look at companies that are expecting to decrease employees, you'll see that the larger companies typically are more on that end. What is unique, though, with this year, with 15%, that's marked by the gray bar there. What is a bit unusual is that while the large companies were most likely to decrease, we also saw that they were the most likely to increase at 64%.
And so this has been a little bit different than what we've seen in the past, that the large companies have a little bit more disparity in terms of those that are increasing or decreasing. But overall, since the July study of this has been done semi-annually here, expectations to add staff increased by about three points. And again, with the larger companies dominating that as well. And one comment I should mention too, with the market share, for a lot of companies as they're thinking about what their market share would be, in most cases, that typically has been around their, in this year cycle, I'd say around their core product offerings.
Whereas in prior years, we were seeing companies that were trying to expand into new geographies, new territories. I don't think we'll see quite as much geographic expansion in 2025 that we had seen in prior years. In fact, I think we'll see more consolidation as companies have announced exiting, whether it's states like California, Florida, Texas, or other areas that have been more prone to catastrophe activity, and so this may be also impacting these numbers here.
So regarding the use of temporary employees for the next 12 months, as you can see, 80% are saying they maintain it and increase is 8% and decrease is 12%. What was interesting is the most significant projected increases in temp usage were in personal lines and PNC carriers that also have a balance with personal lines, which is interesting because there does appear potentially to be a little bit of reducing permanent headcount through decreases in staffing, but there may be an increase as needed for temps to fill in. And this can particularly be the case if some of these reductions are in the claims organization and during catastrophes, you can increase with temp. The most significant reduction in temp usage was in the life and healthcare business, where clearly that came across as significantly higher than what we had seen in the other lines of business.
But overall, this is fairly consistent to what we've seen in the past. Interestingly, when we look at the voluntary and involuntary turnover rates, voluntary turnover rates results are down year over year. So a little bit down. And also, as an industry, I mean, these numbers compare very strongly to the turnover rates that you would see in voluntary in a broader professional services, which will be north of 13%. So differences in those businesses, but again, professional services. Involuntary turnover has also remained steady and also continues to appear stronger than professional services, which tends to be more in the 6%, 7%, 8% for involuntary turnover. Some of the changes you see between the 6-month and 12-month is really hitting when actions may have taken place, which can impact sort of the numbers depending on when you're looking at them.
But again, the trend is the combination of job openings are remaining about the same. Turnover is still within the range that we expected last year and then this year. So there is a very calm market from that standpoint and not an over-significant amount of churn. I think also you tend to see voluntary turnover go down a bit across industries and also in the insurance industry when there's more unsure feelings about the market going forward from an employee standpoint. So I think with all the things going on with the economy, I think maybe there's a reduction also in voluntary turnover as people are tending to want to stay with the jobs that they have.
Yeah. I think what's interesting too with that kind of 4.1% or so on the involuntary turnover, at least the 12-month figure there. Historically, as we've been kind of tracking involuntary metrics really since dating back to around 2005, normally in most years, that typically hovered around 1.5%-2%. So at 4%, it is still relatively about double what it was. I do think that there are two components that could also be driving this. One is more rigor around the performance management and expectations for employees. That has come up quite a bit, particularly in the virtual or hybrid work environments that companies have seen certain employees perhaps not performing well in that environment.
And then the secondary, again, that we'll touch on is as companies have been making more improvements in their operational systems and processes, they tend to find that means that there's areas where are candidly just overstaffed as well. So my expectations is that we will see this involuntary turnover remain a little bit higher compared to those, we'll say, 20-year historical averages probably throughout 2025 as well.
Yeah. I think that's a good point, and while the pandemic might seem like it was a long time ago, if you look at the surge of employment that took place, it is only natural that we would find the new stasis point, and especially as people are coming back into the office, there may be some also additional understanding. There might have been some overhiring, and that has led to some of this also.
Yeah. That's a really good point too because we saw earlier where there were those huge spikes where companies were expecting to grow and grow profitably. That really probably hasn't materialized to the way that they anticipated in 2021.
Okay. Okay. So if we look at sort of notable survey trends, overall employment in the industry has remained stable, growing 1.17%, which is slightly below what we had, what was anticipated. As we've touched on a number of times, companies with personal lines in their books have been more volatile. I mean, it's been sort of the headlines in the market. And personal lines companies are expecting further decreases in the 12-month headcount compared to 2024. And a big piece of that is when you exit markets, and particularly in the personal lines. And based on the headlines, that is going to be a piece. And from some of the discussions we've been having, that is we're going to see more of that in the coming months. The total industry 12-month turnover, both voluntary and involuntary, is slowing down.
But again, it is really based on which market segment we're speaking about. Well, one of the things when I look at this and we look at the results, regardless of the level, there are challenges in recruiting. Recruiting has become more difficult for all the reasons that we have a very well-employed employee population with low unemployment, which scales and makes it more difficult at times to fill roles. What we're seeing is the difficulty persists. And six out of 11 categories, we're seeing from your feedback, more difficulty in hiring. I'm seeing the same thing on the executive level. And the challenges of getting high-quality candidates to switch companies is a bit more challenging and has been more challenging. But again, I think the areas actuarial and executives are at the top, and those match our experiences at Jacobson.
Yeah. I think what's really interesting here too is that technology has dropped to the fifth number, and we'll say all through 2000 to 2020, it felt like that usually technology was the number one area most difficult to recruit for. Every now and then, it would drop down to number two. It's just interesting to see how much further it's dropped.
I also think that as you look at areas like certainly actuarial analytics and then the underwriting, what I would call is really the bread and butter for the core insurance value offering in terms of how companies are trying to think around their product management approach is certainly the analytics and actuarial that are being used to model risks, especially with the heightened wildfires and tornadic and severe convective storms. So I think a lot of that is really driving some of the core insurance skills that you think you'd want to maintain. Unfortunately, for me, being a CPA and accountant by background, I guess accountants are pretty easy to find, but I still hold out there for our accounting brothers there at the bottom.
Well, I would say that based on my experience, if we combine technology and executives for technology executives, that would give actuarial run-throughs money for difficult positions to find.
All right. Yeah. And this slide then just talks about the ability to hire from a year ago compared to a year ago. And really an amazing slide here that only 14% of companies said it was worse, either 11% at moderately or 3% at significantly worse. Whereas the vast majority here, 65% responding that it's about the same. So the piece here really is there was a period of time, particularly in 2023 and 2022 for that matter, we were seeing companies responding that everything was just substantially worse and much more difficult. What also is perhaps telling in all these trends, we haven't touched on the compensation aspects and how this is changing that as well.
The average compensation in terms of merit increase across the insurance, this was true for both the property casualty and the life, health, and annuity segments, was typically around 4.2% for merit increases in 2022 and 2023. In addition to that, we were seeing companies make significant market adjustments. So overall, year-over-year compensation was changing about 5% on average. As we fast forward going into 2025, we're now expecting that those merit increases are likely to be closer to 3.2%-3.5% at median, which is getting us back to where we were in the mid-2010s. The other piece is that the number of market adjustments has changed dramatically too, both in terms of, we'll say, the magnitude of those market adjustments and the roles in there, where there'll be significantly less mid-year market cycle changes in compensation.
But with that, I do want to put one other color aspect is that incentive compensation still remains a high priority in terms of how companies have put that into their plans. So we're seeing short-term incentive plans being offered typically to all levels of employees down to the frontline individual contributors. And then we've seen for on the executive piece, kind of tying back to the recruiting piece on the slide earlier, a growing number of companies that are introducing long-term incentive compensation plans to their executive populations. And historically, for a lot of the mutual companies that are participating on this call, there was perhaps 10, 15 years ago, only 10%-15% of mutual companies had those long-term incentive plans. Whereas now, it's more likely that closer to 60%.
Certainly, once companies get over a billion in premium, it's a dominant practice that all those companies would have a long-term incentive program. That's really all these changes in incentive compensation are really to create competitive compensation programs that companies can attract talent. All right. I know a question came through. We don't have a compensation slide in here directly, but we do separate compensation studies, but we didn't pull that into this labor study specifically. All right. Then, Vince, I think if we can move on to the next slide here, and that'll talk about the increase in staff. Jeff, I'll hand it back to you.
Okay. This gave an interesting look. I mean, one thing that jumped out is technology is back here, particularly. I'm sorry. Sales and marketing and executives are the only two that were our results came back as increasing likelihood year over year. And I think the sales part makes sense, particularly because of the focus on growth. And I think additionally, large and medium-sized companies are most likely to hire the technology roles in the next 12 months. And I think that's really about, again, trying to achieve these efficiencies using new technologies. And there may be a bigger budget to expand and invest in these things where the smaller companies, while technology is on the list, claims tends to be a bigger piece. Technology leads from a likelihood of increasing staff for life, health also.
And again, I think that there are consistent opportunities that the industry sees in these investments in both serving our insureds, our clients better, but also changing how we deliver our products. So again, I think really technology, staff, underwriting, and claims continue to be the greatest needs, which are the two are the core of the business.
Yeah. I think one thing that could be interesting is certainly you can see the technology kind of spike for those balanced P&C-focused organizations. To some extent, we are seeing that where, again, the last 10 years, a lot of the technology additions to staff often related to core system replacement or upgrades, enhancements. Some of those systems have been now replaced with cloud-based solutions, which means that a lot of the development, maintenance, and even some of the infrastructure activities in technology are essentially gone because of the cloud platform. My instinct and what we saw with some of the commentary that also came through from the responses is that more of the technology investments going forward will be perhaps addressing some of the artificial intelligence developments that companies are beginning to invest more heavily in.
Certainly, we know that there's a lot of regulatory oversight in terms of how AI is being used, particularly around some of the underwriting and even in some cases, the claims areas. But we are seeing significant advancements in fraud, areas like subrogation, and just overall claims management that I do expect that to continue to be a higher proportion of the overall budget. So that could be what's driving some of that technology piece a little bit more here in this year cycle.
Yeah. That's a good point. And one of the things that I know has been coming up in a lot of conversations for leadership roles in MGAs and in underwriting situations is the executives' understanding and sort of openness to how technology can be used to eliminate some of the repetitive aspects or the lower-level aspects of underwriting and really push the human part to the more complex risks and the more complex underwriting. But I mean, it's showing up in more and more conversations where in the past, technology wasn't part of the position profile we were putting together for these executives.
All right. And that's just showing that slide there. I should say this slide is just showing that change kind of year over year by study period. So I guess the biggest surprise is really just seeing how much it's come down since 2022. Again, consistent with everything else we were finding, but particularly around technology just dropping so much over this period of a four-year period.
Yeah. I think a question actually came through in the chat room too, which was a great segue to this slide here, is as companies were looking to add staff in the next year, overall, only 16% of the staff were expected to be at an entry level, and there was a question that came through in terms of how the decrease in entry-level hirings affected by the drop in birth rate. That's kind of an interesting piece that could be tying here that because of the birth rate drop 20 years ago, that there isn't the entry-level positions or people to fill those current roles. At 16%, this is the lowest number that we've seen for the entry-level positions in aggregate, and I believe this is about a five-point drop from the 2024 study. What this means is that there's a lot of reasons that could be driving this.
One, we saw that the higher levels of turnover that kind of persisted still in the last couple of years may mean that as companies are doing more involuntary turnover, that means there's positions available for companies to recruit from. And I've heard many anecdotal stories where companies operated by perhaps a national carrier that closed a call center or other activities that now they had the ability to hire from experienced talent locally that wasn't there as well. And not necessarily locally because the virtual and remote hybrid environment allows for positions to be filled anywhere in this case. But I was very surprised to see this large drop in the underwriting activities.
The concerns that I have tie into that birth rate discussion, but more broadly around companies as they think about succession planning and building the talent pool for the future that this perhaps paints a little bit of a bleak story for the ability for the industry to create those roles going into the future. So just a very interesting and staggering piece here from my perspective looking at this slide.
It's interesting. Back when I joined the insurance industry decades ago, the joke was none of us majored in this, and here's where we all ended up in the insurance industry, and on the one side, it is now a college major. We are starting to create that, but I think bringing new people into the industry is a challenge that's faced by a number of industries, and I think there's a lot of effort being done, and Jacobson is a sponsor of some of this, of how do we get to college campuses, get people excited, and really recruit into the industry so that we have that? Because just like many industries, we do have an aging population. This is proving already. We're starting to feel this at the executive side with increased retirements and the challenges in finding replacements. But these statistics start to give you the precursor of, are we hiring less entry because we need less, or is it because we can't find them?
Yeah. The one thing too is we added loss control. So this is more of the risk management loss control function about a year ago in here. And I was recently working with a carrier that, as we were looking at the overall turnover levels in their population, their loss control/risk management function had the highest level of turnover. And they were also expressing challenges about just filling those roles. And when you look at an area like loss control that in this study view here, nobody responded that they were expected to hire entry-level employees. And obviously, that creates a significant challenge when you think about companies that are trying to either service their existing insurance clients, do that survey work, the pre-bind, post-bind type work that needs to be done on inspections and things like that, that it definitely creates a challenge to retain those employees.
And then if everybody's going after experienced staff, that means that there's going to be an increase in compensation as you're pulling those employees away. All right. I'll get off my soapbox there. So we'll go to the next slide. So as we look at some of those reasons that companies were expected to increase staff, again, the anticipated increase in business volume was the number one area, number one reason cited, I should say. And that was followed by expansion of business or into new markets. And those new markets typically from the responses were generally commercial lines focused or organizations. And then areas being understaffed was the number three response here. So it kind of gives you a view in terms of when companies are increasing, logically, these would be the reasons that you would expect that to be.
On the counter to that, when we look at the staff decreases, here we can see that, again, there were fewer companies there, only about 12%-13%. But reorganization was an area that came up as a number one response. A lot of times those reorganizations, as we talk about the companies that have gone through perhaps portfolio changes and things like that, or if they're consolidating field offices, that tends to mean that there are either fewer areas that they need additional management, oversight, etc. But that reorganization has popped up a little bit higher. And this could be also an impact as companies think about their work model post-pandemic and where that work is being performed, impacting that. And then automation, as we touched on earlier with the systems, was the number two cited reason, which somewhat correlates with the area then being currently overstaffed as well.
Also, 7% of respondents here were saying that the contraction of business or discontinuing operations was also a driving factor. So we can, I think a lot of those reasons that they're decreasing staff are somewhat intertwined because they tend to touch on pieces there. All right. And then the next couple of slides here just talk about where the workplace flexibility. So the dominant practice with 83% of companies offering flexible work hours. And that has increased a little bit just with the kind of virtual hybrid environments that companies are comfortable now that employees can get their work done even if it's on those 8:00 P.M., 9:00 P.M., 10:00 P.M., 11:00 P.M. But we're seeing a lot of that being provided. And then the next slide here talks about more about the next slide there if we can advance there, the required in-office experience.
We can see that the changes here compared to 2024 is that in the gray compared to the current cycle in the blue, the number of days being worked in the office at three to four days per week in that hybrid environment has slightly increased compared to what it was a year ago. Again, this is kind of a tale of two cities to some extent because we also see on the far left that the percentage of companies that are expecting employees to rarely work in the office is also up 4% to 22%. The kind of telling thing here in general, and we've seen this every day, expectation in the office usually hovers around the 4% or 5% range. Here was at 3% of companies expecting that in-office experience.
So it's very, I guess the broad theme is that the remote environment or hybrid environment is likely here to stay. Whereas I would also say when we see a three to four days per week hybrid work environment, that it's most typical. Companies were expecting a three-day work experience in office. It kind of gives you a little bit of view in terms of those in-office expectations.
I find this slide and this data really interesting because this is a good example of if you just follow the headlines, it feels like everybody's going back to the office five days a week. And the reality is the headlines are the specific large companies that are doing it, but we're not. This data is telling us that it's not as much a common theme. And more of what we're seeing is the hybrid approach as something more prevalent in our industry.
Yeah. I would agree with that as well. And then even here going forward, that expectation in terms of using the same model for the next six months, only about 10% of companies will require employees to be in the office more than they currently are. And again, we saw it earlier. It's essentially going from a two-day in-office experience to a three-day in-office experience most typically. And we do know that there's a lot of even challenges with companies getting that extra day of employees into the office as well.
Yeah. I think the number one challenge from talking to folks that have been in this is I now go into the office twice a week to do my Zoom calls from there. And I think companies are still trying to figure out how do we make this effective when people are in the office and not just make this decision without figuring out how to change the workflow.
Yeah.
Okay. So a few closing thoughts for you to take away and some of the headlines. And I know we're going to be sharing the deck, but 55% of the companies we surveyed are looking to or likely to increase or plan to increase staff in the next 12 months. And life health is driving a significant part of that. And 12% is companies are planning on reducing staff. And this is slightly higher than a year ago. As I said earlier, there is a skew towards larger companies who are more likely to add staff in the next 12 months. And this is from a little bit to significantly higher than small and medium-sized companies. 74% of the companies expect to grow their revenue, which is still slightly lower than a year ago. And commercial lines, P&C companies are the most optimistic of the segments we look at.
Overall, 49% of the companies stated that the change in market share will drive the expected revenue. The primary reasons that companies plan to increase staff in the next 12 months is an increase in business volume or to a slightly lesser degree expansion of business or new markets. Reorganization is the number one reason for companies that are considering reductions in staff.
And then when we look at the roles that are being expected to grow, technology, underwriting, and claims roles in that order are expected in the next 12 months. Loss control, actuarial product management, and accounting are the areas where companies are most likely to add experienced staff as well versus those new entries, which were more common in the claims and operational areas. In terms of the most difficult position to fill, actuarial, executive, and analytics. And then 14% of companies feel that the ability to hire talent has become more difficult. It's up slightly from July at 11%, but still smaller than what it was two years ago. And at 5.8%, the six-month voluntary turnover is 2.7% lower than the 12-month average of 8.5%. So again, improvement there. But the involuntary turnover was also lower at 2.9% compared to 4.1% for 12 months.
And we do expect that over the next six-month period, 75% of companies will continue to work in that hybrid schedule. And then only 11% are changing their approach to require more employees in the office more. And then lastly, just 3% of companies are requiring their staff to be in office every day, which was down from 6% in last year's study. And so if we look at the projections going forth the next 12-month period, overall, this would model out that we should see about a 1.08% increase in total industry employment over the next 12-month period. But we do see some disparity in terms of where that is. So on the life health side, we only anticipate about a 0.4% increase compared to about a 1.4% increase on the property casualty side.
But no surprise, that is largely dominated by the commercial lines, which is expected to grow at 2.4% compared to a negative decrease there on the personal lines side. So a lot of interesting trends kind of modeled out with what we're seeing in the industry. Jeff, I had one question. I was thinking if you were talking about the hybrid experience too. I know you're doing a lot of recruiting for executive roles specifically and helping companies fill that. Is there any change in terms of how companies are expecting where their executives are? Do they want them in the office, or how often are they allowing the hybrid or even virtual environment for those executive roles? And then does that change at all by the type of executive? Is it different for an underwriting leader versus claims versus technology?
It's a good question. I think what we're seeing is, one, more companies, if they have requirements for the non-executives, they are trying to not have a special deal for executives. So if they're requiring people to be in the office a certain amount, they really don't want to have haves and have-nots when they're doing their recruiting, especially if they've converted executives they have into this. So I think that is one piece. I think the challenge is working remotely has become a perk. And if you are trying to attract an executive who is moving from a totally remote into an office scenario, that is likely going to spill into the compensation discussion, is something that we're seeing more and more. What's interesting is I think there's less negotiation about it because, again, they don't want to create special circumstances for one executive if other executives and the wider team are following being in the office.
Okay. That makes sense. Well, great. Well, it doesn't appear that there's any additional questions that have come through. But we will be conducting this survey again in July. If you'd like more information on how to participate or have any general inquiry, you can certainly reach out to Jeff or myself and also Vincent Albers there at Vincent.Albers@aon.com. We really appreciate you providing your time today to participate here. For all those that also complete the study, thank you very much. We know it takes a little bit of time to fill it out, but the insights and information that we gained from that is valuable, and we hope it helps inform the industry in terms of how you're thinking about your future staffing plans and operating model considerations. On behalf of Aon and the Ward Group, thank you very much. And Jeff, I'll let you take away. Close.
Yes. Also, thank you for all those that joined us today. And for those that filled out the survey, really appreciate it. And I hope we were able to provide to you the insights you were looking for. And I mirror what Jeff said. Feel free to reach out to either of us or Vince if you have any questions or comments. We would love to connect with you. So thank you, everyone, and have a great rest of the day.