Good afternoon, and thank you for attending today's webinar, the Insurance Labor Market Study from the first quarter of this year. If you do have any difficulty or issues connecting, we would ask that you just please restart using the webinar link that has been provided to you. If for some reason you have any audio issues, you can certainly elect to dial in with the information that's on the webinar invitation. And while we are in today's presentation, we also ask that if you have any questions, please go ahead and enter those into the toolbar. We'll be able to try to answer any of those during today's presentation. At this point, I would like to introduce Jeff Rieder, Partner of Aon and head of STG Performance Benchmarking, to lead us off.
All right. Thanks. It's good to be with everybody today. I am joined by Greg Jacobson here, and I'll let Greg introduce himself as well. We have a lot of exciting information to cover on today's call and some really interesting trends that we're starting to see come through with some of the labor market data. But for those not familiar with STG Performance Benchmarking and Ward, now we are using the branding around Performance Benchmarking, which is now a division of Aon's Strategy and Technology Group, also known as STG. Our division within STG provides consulting and performance benchmarking for the insurance industry. Specifically, we focus on staff levels, compensation, and other business practices around company operations. If you'd like more information about our services, go ahead and visit our website there at ward.aon.com. Greg, I'll let you introduce yourself.
All right. Thank you, Jeff. Thank you, everybody, for joining us. We've got a big crowd here. The Jacobson Group, for those of you who are not aware, is the leading executive search and staffing firm and specifically focusing on the insurance industry. We provide a variety of solutions for talent, including executive search, professional recruiting, temporary staffing, and providing interim experts for special circumstances and consulting. Thank you for joining us today. We'll jump right into the study. I'll give you a little bit of a preview of what we're going to be doing today. We've been conducting this study twice a year for the last 15 years. The focus is on analyzing the labor market within the insurance industry and really more specifically within carriers in the industry.
We'll be talking about some of the staffing challenges, by discipline, the outlook in terms of company growth or labor market growth, and in general, just providing commentary on the industry's labor market. Again, as Jeff said, if you have any questions, please put them into the chat. We're happy to respond. Our study today go on to that. Thank you, Vince. Our study today covers about 275,000 employees, which is roughly 17% of the market. So it's a pretty sizable study. 46% of the companies are considered regional and 54% are considered national or multinational. The study is weighted towards property and casualty. As you can see, 80% of the companies are property and casualty companies. Only 19% are life and health. Part of that is just the nature or the number of companies that there are in the market.
Then we'll reference companies by size in the study. So there are small companies, medium-sized companies, and large companies. The smaller companies tend to be companies under 300 employees. That represents about 40% of the study. Companies between 300 and 1,000 employees represent 19%. Over 1,000 employees represent 40% of the study. So with that, we'll jump right into some of the labor market statistics from the BLS. To be honest with you, I'm not sure this really is really representative of what's going on in the market. It is interesting, though. We know, I'm sure you've all heard the unemployment rate for the general economy is hovering near all-time lows at 3.7%.
The insurance industry, which is the darker blue bar below and then the red trending line for the prior six months so moving average over six months, is showing that the unemployment rate is hovering around 2.5% for the insurance industry. Interestingly, if you look at only the last three months, there's actually a little bit of an uptick to about 2.5%-2.6%. I don't know that it's that material, but maybe the biggest take-home here is that we're going to see we're going to be talking about the market slowing down and so forth, but we're not necessarily seeing that in the unemployment rates. The unemployment picture in the insurance industry is very, very stable. Probably will continue to remain there, but there is a significant change happening in how companies are viewing their staffing situation.
So the other thing that I'd like to start out with here is total insurance carrier employment. It's now at 1.625 million people in the United States. That actually is slightly down over the past six or eight months. Not by much. A lot of people may be surprised that maybe they're not. Maybe you won't be surprised that the industry has really been pretty steady for the last six to eight months. We're down about 4,000 jobs in total since August of last year, 2,000 in property and casualty and 2,000 in life and health. But given the numbers, it's relatively immaterial.
One thing I would say that's interesting here is if you expand this number, the number of total employees, to the entire industry, so beyond just insurance carriers and related activities, which includes brokers and service companies, we actually hit an all-time high last month in terms of total employees, three million employees now work in the insurance industry overall. That's up. Like I mentioned, that's an all-time high. The majority of that growth is coming from agents and brokers, which added about 15,000 jobs over the last six months. So we're not seeing a lot of growth in insurance carriers, but the brokers are certainly picking up part of that.
Yeah. And I think, Greg, that point too. I wonder, to some extent, how much of that's being impacted. We've seen growth in the MGA, MGU environment as well. And particularly as we go through later on, we'll notice some changes between, particularly on the P&C side, between personal and commercial lines carriers. And for many of those who were in our December presentation for the year in review, we made a note there around the explosion in growth, I would say, in the commercial specialty market and some of the emphasis there on many carriers. Much of that business is being distributed through MGAs, and that could also be impacting why we're seeing perhaps a small shift in where the employment is.
We did have a question that came through, and Greg, this is probably suited to you as well, but is any of this being impacted by offshoring currently?
Good question. Jeff, you may have more information on this than I do. I don't see a dynamic change in the amount of offshoring that's happening. This has been something that's been an ebb and flow of that for the last 10 years. So we're not seeing that. Have you seen anything different, Jeff?
Not significantly. We have seen a smaller number, I'd say, of the large carriers. And by that, I would define those as companies with more than 5,000 employees that tend to have a bit more of their business that may be offshored. But I wouldn't characterize it as a dominant trend but more consistent with some of the large and then perhaps publicly traded organizations. But that may also be as a result of some of the challenges that companies have had too with hiring in the last, we'll say, two-year prior two-year period. But as we see, that'll be a little bit smaller as well. Oh, another question just came through as well. Acquisitions by agents and brokers may also be having an impact on distribution. Yeah, I do agree. I think that is something to be considered here as well.
Certainly, we know that there's a lot of consolidation going on in that market, and that may also have an impact not only on the availability of talent but to some extent, when companies do make those acquisitions, if you will, or consolidations, in many cases, some of the back-office areas for technology, HR, finance, other support functions tend to be impacted greater where they see redundancies in activities. All right. And then on our next one, this is looking at the revenue expectations and staffing expectations. And in the past, a lot of times, these charts tended to look a lot closer to each other, but we're starting to see some variation. And Greg will talk more about this on the next slide here. But overall, 52% of companies are expecting to increase their staff over the next 12-month period.
And now a larger percentage at 38% are expecting to maintain staff and 10% decreasing. But that compares to about 77% that are expected to increase growth or revenue and 21% flat growth. One thing that is interesting is while we know that there have been rate increases that have been dominant throughout the personal and commercial line segments, we know that the annuity lines have seen some significant growth over the last year as well. In some cases, that growth in revenue is disproportionate to the growth in exposure, meaning that companies may have actually had a reduction in their policy count but are having growth in premium that is perhaps going to start outpacing their surplus positions. And this is causing some challenges for companies that are now seeing higher leverage ratios than what they historically would have.
So that is starting to impact a lot of this as well. And then, yeah, we did have a question that came through that said, "Why are the growth trend premium inverse proportional to employment trends for carriers?" And I think that is really the impact there is that companies are also seeing some changes around automation. We know that there's been investments in artificial intelligence and some other things. We'll talk more about that towards the back end of the presentation. But in some cases, I think companies are seeing some of the efficiencies of their technology are also improving as well. And then another kind of comment came in around the baby boomers leaving the industry and the impact that will have is also yeah, I would say it is an interesting observation.
We've noted in some of our other studies, in our latest study in 2023, that the average age of the industry, an average tenure of the industry this was specific for P&C, admittedly, but had decreased for the first time. And the average age now was under 46.5 years. And the average tenure per employee dipped to about 9.6 years, which was the lowest that we've tracked since we began tracking that in 2006. So that's going to be impacted by turnover and some of the other things as well. And we'll touch base on some of those aspects in a moment too. Greg, I'll hand it back to you.
Yeah. So just to add on to that, it seems like some of the excess retirements versus the average have already taken place. There's been talks about this for 20 years. And so now we're starting to see a slightly younger market than we had before, and that will delay some of the turnover that has always existed for the last at least five to 10 years. So this study is this chart's really interesting. This is showing, I think, what's happening and a pretty significant change in how companies are viewing their plans for hiring over the next 12 months. So you can see the top line, the dark blue line, is showing what number of what percentage of companies are planning to increase their staff over the next 12 months. And we're at 52%, which might sound great.
Might sound like, "Okay, half the companies are planning to add staff." But that 52%, actually, if you take out the pandemic year, that's the lowest that number has been since 2012, just when we were coming out of the financial crisis. So there's been a significant change in thought process as it relates to companies looking to expand their hiring, and it's slowed down fairly significantly. That said, this does not mean - and we have not seen this - that there are going to be mass layoffs that are going to be impacting the industry. Now, that's not to say there aren't going to be layoffs. There have been layoffs. There was an announcement this morning in the life and health sector about layoffs. And we've been seeing more and more news about this. But those numbers have not been huge numbers.
In fact, with 10% of the companies planning to reduce staff over the next 12 months, that's not that different than it has been. Obviously, you can see it's gone up since, I think, at one point, it was 4% a year and a half ago or two years ago. It's nothing close to what it was during various recessionary periods. I think that overall, what this is saying is that there's a significant pause, at the very least, in terms of the amount of growth that's going to be taking place in the industry but not necessarily mass layoffs, as 38% of companies are planning on just keeping the same number of staff as they had over the last 12 months.
I think to some extent, that might be, as companies are evaluating their, again, their product and geographic portfolio, if you will, that to the last two years, there's been the rising inflation that was much more pronounced in 2022. 2023, it's come down. 2024, it's expected to moderate. Already has. And particularly on the property and casualty side, as companies begin to realize the rate increases that they've seen over the last two-year period, this 2024 renewal cycle will essentially have the full impact of those rate increases coming through and that earned premium coming through as well. So by all accounts, we should be at a much stronger position by the end of this year, barring any major catastrophe or other event. And this could then position companies for more expansion going into 2025 as well.
And as we look at the next slide too, this will just give that view in terms of where we have seen a much more highly correlated view on growth in terms of premium by the top line and then number of employees being added on the bottom. So this is certainly the first time where we've seen such a disparate view on those two metrics. But again, I think right now, the general theme is companies are perhaps being a little bit more cautious in terms of their staffing expectations. I've talked to a number anecdotally that in some cases, they may have overhired in the kind of rebounding from the 2020 or I should say the pandemic. And then the underwriting ratios are also, I should say, expense ratios are also coming down to historic lows, perhaps the lowest we've seen that we've been tracking it as well.
But a question did come through too is, "How much has P&C automated underwriting projected in the last 20 years where companies thought it would be impacting their expense ratios?" The automated underwriting, and I'd say this has also been true for some of the automated life underwriting processes, has had some impact. For the personal line segment, it has been pronounced, particularly over the last 20 years. We've seen significant reductions in headcount relative to premium and policy. In the commercial line segment, we have seen greater improvements, particularly in the workers' compensation and small commercial. However, when we look at the impact that automation's had on mid-market and larger accounts, I'd say that the underwriting efficiency has not improved significantly. However, it has made the underwriting quality increase significantly.
So companies are getting appropriate rate, understanding their economic capital models, and applying the right type of rate increases and price increases at a very much more targeted approach as well.
Hey, Jeff, let me add on to something you said. It was interesting that you mentioned the policy count per employee head. But at the same time, the cost of employees per premium dollar has not necessarily gone down, which means that more sophisticated employees have been employed to a more sophisticated business over the last 20 years. And likely, that's going to continue even with AI. We'll talk more about that in a moment. But would you not agree that it's not necessarily the headcount has changed, but the sophistication of the employees and the compensation of those employees has not necessarily gone down as a result of automation or in general?
Yeah. Yeah, that's a good point. It's almost a shift in the distribution of employees. 30 years ago, when we first started doing a lot of our studies, you might have only seen 7%-8% of the workforce that were kind of technology roles. And now, when you take technology, analytics, and some of those other activities, it's not unusual for companies to have 15%-even 20% of their employees in those roles, which are obviously much more highly compensated and require much more technical background. Okay. So on our next slide then, as we look at this, I think what this is doing is it's comparing the staffing plans that occurred in 2023 compared to how companies were expecting this to happen in last year. And it's really interesting.
The blue bar is showing the actual staffing that occurred, whereas the teal bar is what was expected to occur. Similar to what we're seeing here, a much heavier emphasis on companies that maintain staff. We did see a handful of organizations that did grow above 10%-20%. But in most other cases, the growth areas were below what was anticipated. You'll also note that, as expected, slightly more employees that decreased by 2%-4%, 5%-9%. So the number of employees that decreased were just slightly higher. That might also reflect the challenging economic conditions that continued through 2023.
Hey, Jeff, we do have a question that I'd like you to opine on. There's the divergence, as you display it, influenced by rate increases, pushing revenue up. I think we talked about this, pushing revenue up while automation is limiting the number of employees needed to handle that revenue. I think we did address that. The answer is, I think it is in terms of the number of employees, yes, but in terms of total compensation per premium dollar, not necessarily. Although we'll see what happens in this new environment where the rates have gone up pretty significantly, especially in personal.
Although the other thing too, though, is I don't want to minimize the impact that we've seen several national carriers that have pulled out of markets such as California, Florida, Texas, companies that have decided to make the difficult decision to exit out of personal lines, for example. So there have been a lot of organizations that have specifically reduced their footprint, which is also then going to mean fewer policies, which then means fewer claims. And then when you say, "Okay, we have fewer people there," that means we need fewer back-office people to support that. So some of that is also being impacted by an actual reduction in policy count.
In personal lines, my guess would be when we swing into more of a soft market, that's going to change as well because there will probably be new entrants that come into the market or aggressive plays to expand books of business.
Yeah.
Okay. So we'll go to this. Yeah, this is a little bit of a breakdown. Before I do this, I'll share with you that. So last year, 67% of companies were planning on increasing staff, and only 55% of companies actually did increase staff in the last year. That's probably a bigger difference than we've seen in the past. We always see companies that are being a little bit more aggressive in their thought process than they actually execute on. I think the difference this year, especially over the last six months, is that more and more companies are choosing not to fill those positions that were open as opposed to they were trying to fill the positions, but they just couldn't fill them. There's been a bit of a change there.
Here, you can see the breakdown between property and casualty and life and health, where 54% of companies were planning on increasing their I mean, I'm sorry, 69% of companies were planning on increasing their staff in property and casualty, and only 54% did. And then 13% of companies actually decreased staff when only 9% were planning on it. Much more stable, I think, in the life and health market, where 50% were planning on increasing their staff, 53% did, so slightly more. And slightly less companies actually reduced staff in life and health than were planning on it. So we'll talk a little bit about this. This is an interesting slide here. This is the total number of open jobs in finance and insurance as reported by the JOLTS study by the BLS. And I don't think this really tells the whole story.
We do this on an average yearly basis because the numbers kind of fluctuate a great deal. So you can see the average in 2022 were 400,000 for the year, 400,000 open jobs in finance and insurance. And that dropped to 344,000 in 2023. However, in December, if those numbers are to be believed, the drop actually was down to 303,000 jobs. So we're talking about going from actually a year, December of 2022, it was about 445,000. So about a third less oh, no. Well, yeah, about a third less jobs open at the end of 2023 versus the end of 2022 in finance and insurance. So it's a pretty significant slowdown in terms of the number of open opportunities.
So this is, again, kind of syncing up with the earlier slide. But this is now just comparing the plans for 2024 compared to 2023. And we reviewed those plans for 2023, which was the teal. But as you look at the proportional changes here, again, as we mentioned, 38% of companies expecting to stay flat. When there are the decreases, they are fairly nominal. With about 8% of those staff reductions are expected to be under 4% when you combine both the under 2% and 2%-4%. So not massive changes, but that will have somewhat of an impact. And then as companies are looking to grow headcount, it is interesting. It's fairly evenly distributed in that 2%, 2%-4%, 5%-9% range with about 13%-15% in those areas.
It is interesting to note that of the companies that are expected to grow, 66% of commercial lines companies, in particular, were expecting to grow, which was 32 points higher and 16 points higher than the personal lines and balance lines companies, respectively. So no surprise they're seeing a lot more emphasis in that commercial lines segment as well. Then on the next slide, comparing those staffing plans between the two segments or two-year studies, this is just looking at the P&C on the left, life on the right, and again, coming down just a little bit for the life segments where the notable change is on the P&C segment with 53% expected to grow compared to 69% a year ago.
It was interesting to note, too, just a slight decrease in the number of companies that were expecting to decrease staff for the life segment compared to a modest increase from 9%-10% on the P&C segment. And then lastly, on this next slide, it's just does the impact of employee size as we're seeing here that the smaller companies, perhaps not too surprisingly, are expected to be a bit more stable, small being under 300 employees. And the largest companies, over 1,000 employees, were expected to have the largest percentage that were decreasing staff. But it was fairly consistent with the medium at 13% as well. So notably higher for all of those impact there.
We'll see that later on when we talk a little bit about involuntary termination. I think that the larger companies are being much more aggressive. The smaller companies probably tend to focus a little bit more on those relationships and keeping people because they know how difficult it had been to get people in the door and then to develop them. We're also seeing a bit of a slowdown on the temporary employee utilization as well. 16% of companies said that they were planning on decreasing their use of temporary staff. That actually tied an all-time high in our study versus about five or six years ago. The 8% of companies that were saying they're going to increase their use of staff was near the bottom in terms of that metric as well.
So we're seeing a bit of a slowdown in temporary employees' usage as well as in hiring overall. So next slide, we'll talk about involuntary termination. I already referenced this about the larger companies and the smaller companies taking sometimes a different approach. What you can see here is on the left, the two graphs on the left are showing the voluntary turnover. Then the two graphs on the right are showing involuntary turnover. You can see that actually, the amount of voluntary turnover is coming down pretty significantly. If you look back 12 months, companies are saying it was over the last 12 months, we've gone from 11% voluntary turnover down to 9.3%. Over the last six months, so it's even accelerating, slowing down even more so, we've seen voluntary turnover go from 8% down to 6.2%.
In terms of involuntary turnover, we're actually seeing an uptick if you look at it over the last 12 months, but a downtick in the amount of involuntary turnover over the last six months. I know that's all confusing, looking back at different periods. What I would say, though, is that in general, we're seeing less employees leaving on their own, slightly more employees leaving their organizations on an involuntary basis. In fact, I looked back Jeff and I had a discussion about this. I looked back at the numbers from a year ago. They actually have come down a little bit in terms of the amount of involuntary turnover, especially if you look at it over the last six months. But it's still probably at a little bit of an elevated basis right now.
But again, I mean, we're seeing more and more companies that are announcing layoffs, but the number of layoffs are pretty small numbers. So I don't think we're seeing huge dislocation like we've seen in the past.
It is interesting to the extent that this 4% range or so will be the new norm, if you will. Where it's tracking over the six months at about 2.4%, that's more typical to what we'd expect to see. If we go back 15-20 years, involuntary turnover rates of about 1%-1.5% were much more common. So we're probably running, over the last 12-month period, about double what we would have historically expected to see. And those involuntary turnovers in those days were more due to performance issues, individual employee performance issues, whereas now these are things that are more to address the challenges that businesses are facing.
It is interesting, though. I looked at the JOLTS study for layoffs. And actually, layoffs were slightly down this year versus last year in finance and insurance. I don't know what that means. It seems a little counterintuitive because we've been hearing more in the news. But at least in finance and insurance combined, that's what the JOLTS study is showing.
Yeah. Okay. And so I think on some of the notable trends here that we're seeing, so total headcount grew about 1.17% versus the expected rate of 1.67%. So slightly lower there. The P&C headcount grew about 1.2% versus 2.07%. And then as we look at the life industry, this actually grew a little bit more than anticipated at 0.7% compared to 0.5%. And overall, turnover, when we combine both the voluntary and involuntary turnover, was about 13.5% over the past 12 months. And that 13.5% combined is a little bit lower than what we saw in 2022, but certainly higher than what most insurance companies would expect to see when they were typically operating, probably close to the 9%-11% range in most other years.
All right. We'll jump to recruiting difficulty. And then we'll try and get back to some of your questions. I know the questions are we're going to be getting flooded with questions, and we're skipping over, and we'll try and get back to them at the end. Recruiting difficulty, it remains high, but it's waned a bit. In fact, I think if you look at the average difficulty for all positions in both industries, life and health and property and casualty, the number is 5.7% right now versus 5.9% in June. So it's gotten a little bit easier, not significantly easier. So the hiring has slowed down. But as I said, the unemployment rate hasn't gone up. So it's a little easier, but not necessarily that much easier. So several positions have gotten easier over the last 12 months: technology, underwriting, claims, and so forth.
Interestingly, the one outlier is executives. As people were retiring, the industry is thin in terms of its development of senior leaders. And that is having an impact in the difficulty to hire people. Overall, I would say that we're seeing more difficulty in hiring life and health people than we are in property and casualty. The average number for life and health is 6.3% on this scale versus 5.6% in property and casualty. And life and health actuaries and analytics people are kind of going through the roof. I think the number was about 8.0% or something. It was very, very high for life actuaries and analytics people. And then we asked the question, is it just to kind of further solidify what we're seeing here? Are you seeing are companies seeing it more difficult or less difficult to recruit people than it was a year ago?
53% are saying, "Hey, it's about the same." 28% of companies are saying it's a little bit easier. 4% are saying it's more than a little bit easier. It's significantly easier. Still, 14% are saying it's either significantly or moderately worse. It's clear from this slide and the slide prior, it's getting a little bit easier to recruit people, which is great because we've been at historic highs in terms of the difficulty.
All right. So then looking at the areas that companies are more likely to increase staff and we broke this out by industry segment for P&C balanced, P&C personal lines focused, commercial lines focused, and life-health. You'll note that the segment that tends to be quite a bit lower than all others in most activities is, again, that personal lines focused organization, which is the third on each of these charts here. Essentially, in just about every category, not all, but most categories, that tended to compare near the lowest. Whereas we see that commercial lines focused, which is the teal, the second teal line, tend to be more likely to be above in each area. To Greg's earlier point, you can see the life actuarial and, interestingly, the operations component were areas that companies were also expected to increase staff here.
But I find it also very interesting to note the difference in a couple of roles. One will be for the underwriting function, which is the second to the left or from the left, I should say. And you'll note that for personal lines balanced, commercial balanced organizations, that was the highest for commercial lines in particular. And claims actually was even higher than the technology roles for those commercial lines focused organizations. So that, again, might be reflective of both the opportunity to grow premium and revenue right now as well as the better profitability that we are seeing in that segment. And then likewise, as you look at the I mentioned on the life side, but just that growth. But we did see that technology in aggregate across all four segments does remain the number one function that companies are hiring for.
And then when we look at the next chart here, this will show it by year. It's very interesting to see as companies were coming out of the pandemic in January of 2022, kind of a full year of kind of getting back to normal, if you will. But technology has shown a sharp, sharp drop in the expected likelihood to increase since that 2022 segment. And it even came down in 2024 compared to 2023. And that's despite the availability of talent that is now there. As we've seen that many of the insurtech organizations have had some pause in their ability to operate. There have been notable layoffs that we've seen across some of the large technology giants outside of insurance as well. So there's a lot of availability of staff, but companies aren't perhaps hiring as much for that.
The other piece is just noting the interesting trend around underwriting and claims, arguably the two core customer-facing activities for many insurance companies. Kind of post-pandemic of 2020 and 2021, those remain very high, that companies still are hiring at levels that are even higher than the pandemic-level areas. The other thing that I thought was interesting is looking at the sales and marketing component here. As we've seen that where companies are perhaps not emphasizing growth in terms of their exposure count and policy count, we've seen a reduction in growth in sales and marketing. I've seen also other comparisons looking at things like advertising spend coming down as well.
So that emphasis, we'll say, or lack of emphasis perhaps on sales and marketing might also be more reflective of going after kind of existing known opportunities versus trying to build out new markets or territories. All right. And then this last one is looking at the employee levels by job function. And this is consistent with the last year's view that about 72% of positions are expected to be filled by experienced staff and 27% by entry level. One thing that did pop out a little bit more is the underwriting function. We can see now that 21% of roles that has increased a little bit are expected to be entry level or only 21%, I should say.
We know that while underwriting remained the number two function in total, and it was the same thing with technology, number one f unction, with companies expected to hire in those two areas and more experienced staff at 81% and 77% respectively, that can still cause some challenges from competitive pay programs and perhaps expected higher levels of attrition. There was a question that came through that I noted on merit increases and just the impact that all of this is having on merit increases. With the declines, we have started to project that merit increases for 2024 are likely to be approximately about 0.5 point lower than what they were in the prior year. As companies are repositioning and trying to have more cost control measures and looking at their overall staff profile, that's also resulting in lower merit increases.
For many organizations, incentive payments in 2024 based on 2023 results are going to be lower. There's been many organizations that we work with that the short-term incentive programs in particular have zeroed out in some cases. It is impacting employees in the wallet as well. Okay. Then our next slide here is just talking about why companies, if they are expected to increase staff, 34% are expecting an increase in their business volume. 30% are expected to have an increase in their business and new product if they are increasing. And others, 22%, feel that the areas are understaffed. When we look at the most common reasons, top three for companies to decrease staff on the next slide here, the most common reason that companies are expecting to decrease staff we can just advance forward one screen there.
The automation improvement was the most common response that companies were stating, 5% having reorganization, and then 3% were anticipating a decrease in business volume. One thing that I think is interesting, however, is it only showed up at 1% here, the correct manager-to-staff ratio. I can tell anecdotally and from several engagements that our firm was involved in last year, many organizations are evaluating this manager-staff ratio now that they've seen the automation improvements, which have reduced the number of frontline employees. There's been a heightened sense to evaluate the job leveling within companies and determine if they have the right number of VPs, AVP, director-type positions with the sense that many companies have felt that they are perhaps bloated in the upper executive levels compared to the size of the overall organization.
There have been several companies that have made some quiet changes to evaluating that overall executive level or senior-type officer position as well. That might have greater impact as companies try to truly evaluate what the management levels that they'll need to support the organization are.
First of all, we had a couple of questions. There was a question or maybe it came up more than once. Will you be able to get these slides? Yes, we will be sending out the slides with all this information out to everybody who's participated in the study and everybody who's participated in this webinar. I think it should probably come out tomorrow depending on editing. But you will be receiving those slides. The other question, which I think we'll be about to address, is do you think voluntary turnover is occurring due to back in the office increasing? I think that flexibility is an incredibly important thing that, in general, the industry does a pretty good job with. This slide is actually showing you that 86% of companies are offering, at the very least, flexible hours. 14% do not.
What we're seeing anecdotally is when we're recruiting people from one company to another, the first question they always ask is, "How often do I have to be in the office?" And there are, primarily with larger companies, kind of a return to work, return to the office focus with some of them. We'll see it's not wholesale changes, but it is increasing. And we do see that those are employees who tend to look at their situation and try and figure out if they can make a change that will allow them not necessarily to have to come into the office as much.
Yeah. And then on the next slide, this gives us a view in terms of the required work-in-office experience for the majority of employees. So 6% of companies were expected to be in the office every day. 46%, one to two days. three to four days was at 30%. And 18% at rarely. What was interesting here on the rarely comment is this same question when I asked in July of 2023, that was close to one-third of companies were expecting employees to be rarely in the office. So there is a movement to get employees back in more frequently to provide both the training and learning that companies have, but also to help build the culture. And I would say that many companies felt that the surge in productivity that occurred when everybody first went home during the pandemic has dissipated significantly.
They're seeing that there's been a deterioration in the quality of work as well as the volume of work that employees can support as well. So that may continue to push a little bit more for employees to be there in much more. But at least for now, the one to two days is most prominent. And then for the requirements for employees to be in the office more, with that being said, only 84 or actually, only 16% said that they will require employees to be in the office more. And 84% are projecting to be about the same. So it was interesting. No company did expect that they would be in the office less in the next six months. So not a significant shift, but if companies are changing anything, just a slight shift to be in the office more over the next 6-month period.
So we'll just wrap up with some summary thoughts. Then if there are additional questions, we're happy to answer them. If you have any questions that are real specific or if you want us to look into some of the data a little bit more carefully, feel free to reach out to either Jeff or myself. Here are some of the summary of some of the key points here. 52% of companies are planning to increase their staff over the next 12 months driven by property casualty, the property casualty segment at 53%. But like I said, that's down significantly from where it has been in the past. Companies are still hiring, but it's slowing down. 10% of companies are planning to decrease their number of employees. This is the same total expected in both the January and July 2023 study.
We're not seeing an increase in terms of the number of companies that are planning to reduce staff. 53% of both medium-sized and large companies plan to add staff during the next 12 months. This is two points higher than smaller companies. I think we are seeing, in general, larger companies are adjusting more quickly either in reductions or in increases than their smaller brethren. 77% of companies expect to grow revenue during the next 12 months. This is five points higher than the July survey. But as Jeff has talked a lot about, that revenue is often coming not from policy count increases, but from rate increases, especially in personal lines. Commercial lines property and casualty companies are the most optimistic to increase revenue at 84% of them expecting growth compared to 78% in personal lines and 75% in property and casualty multi-line companies.
71% of life and health companies are expected to increase in their revenue. Overall, 46% of companies stated that the change in market share will drive their expected revenue change while 37% cited pricing factors. That's interesting. We'll see how that works out over the next year. This is the first time since July 2012 that P&C companies responded that the primary driver for revenue change was expected to be pricing at 43%. Property casualty companies are more focused on the pricing changes, which makes sense. The primary reason companies plan to increase staff during the next 12 months is an expected increase in business volume. 34% of companies listed this as the primary reason to hire, followed by expansion of business and new markets. Automation is the most common reason companies are planning to reduce headcount over the next 12 months.
But I should point out that that number was 8% of the 10% of companies who were looking to decrease their staff. So still a pretty small number.
Then technology underwriting claims roles are expected to have the greatest growth during the next 12 months. With 90% of companies planning to increase or maintain staff this year and voluntary turnover showing slight signs of slowing, recruitment will still be a challenge for the industry throughout 2024. Insurers will concurrently be focused on retaining top talent as they continue to navigate shifting complexities and expectations. Product management and sales marketing are the two top areas where companies are looking to add experienced staff while operations and claims roles are identified as most likely to add entry-level positions. Actuarial, executive, and analytics positions continue to be the most difficult to fill. And in total, 14% of companies feel the ability to hire talent has become more difficult compared to the prior year, which is down from 25% a year ago.
At 6.2%, the six-month voluntary turnover is three points lower than the 12-month average of 9.3%. The average six-month involuntary turnover is also lower at 2.4% compared to 4.2% for the 12-month period. During the next six months, 76% of companies are expecting most employees to be in the office at least one day. Over the next six months, 16% are expecting to change their approach to require employees to be in the office more. Last, 6% of companies require staff to be in the office every day. That is up from 4% in last January. We did have one other question come through that says, "What does all the research tell you about the percentage of the relevant workforce retiring in the next 12 months?
Is that lumped with the statements that you've shared on anticipating voluntary turnover expectations being lower?" The piece on the retiring workforce of the next 12 months, we have seen that uptick. I'd say really the trend probably started in the 2014, 2015 timeframe where we saw retirement beginning to have a more meaningful impact. For most organizations, retiree turnover typically tends to be roughly around 2.5%-3% of their turnover now. With the overall broader turnover that had occurred in the past two years, there has been a shift with a higher percentage of employees that are now younger, often under 40. So I don't expect that retirement will have an outsized impact on the overall turnover.
My instinct that it'll be relatively proportionate as we've seen over the last couple of years, which means that it's still difficult because it's a higher than what we may have seen a decade ago. But I don't think it's, for most organizations, going to have an extraordinarily outsized impact. And Greg, I don't know if you would share that comment.
Yeah, I think so. I mean, I think that number overall has started to decline, right, slightly.
Yeah. And then we did have one other question that came in that I thought would be. Oh, no, I think we answered that one. Oh, but it was on the sense of customer service and contact center turnover and what that looks like. Those typically are significantly higher for most organizations. It's common for companies to be between 25% and 35% in their turnover in those call center activities. But I think we addressed all other questions that had come through.
Actually, there's one more here real quick. Are companies still requiring degree education requirements for recruitment, or is this moving more towards skill-based? This is a really interesting question because for the longest time, I think 20 years ago, it was really not a focus. Formal education was not a focus of the industry. Then it became an extreme focus. Now, anecdotally, we're starting to hear companies say, "We're not really as concerned about what someone has in their educational background as much as what we're looking for in the skills and their experiences." So maybe it's slowing down slightly in terms of the race to recruiting from the top schools. I don't know. But that's what we've been hearing a little bit.
All right. Well, with that, we'll close our presentation here and complete with our projection for the next 12-month period that if the industry follows through with the plans that the companies have put through here, we'll see about a 1.2% increase in industry employment during the next 12 months. And we can see that across the various sectors, overall life and health is expected to be up about 0.9%, whereas the property casualty up about 1.35%, where you can see particularly on the P&C commercial at 2.3% is outpacing the personal line segment at about 0.26%. So pretty significant differential there between personal and commercial lines. If you'd like more information about this, please contact vincent.albers@aon.com. And we'll be conducting the next iteration of the survey in July of 2024. We really appreciate all of your participation in this.
We hope it provides a lot of meaningful data for you and gives you a sense in terms of where the industry is as you're thinking about your business plans for 2024. On behalf of Aon and the STG, we thank you for attending. And Greg, I'll let you close as well.
All right. Thank you, Jeff. On behalf of Jacobson, we really very much appreciate your participation. We'll look forward to talking to you again soon.