Aon (AON) Status Update summary

Labor market trends and staffing expectations

• Insurance sector unemployment remains low at 2.1% for 2024, below national averages and stable year over year.

• 55% of companies plan to increase staff in the next 12 months, while 12% expect reductions; large companies show the most disparity in both increasing and decreasing staff.

• 74% anticipate revenue growth, mainly driven by increased market share, though this is slightly down from last year.

• Staffing growth is most pronounced in P&C commercial and balanced carriers, while reductions are highest in personal lines, life, and healthcare.

• Automation and efficiency improvements, especially in policy processing and data entry, are influencing staffing plans.

Turnover, hiring challenges, and compensation

• Voluntary turnover rates have declined, with the 6-month rate at 5.8% and the 12-month at 8.5%; involuntary turnover remains elevated at 4.1% over 12 months.

• Recruiting remains challenging, especially for actuarial, executive, and analytics roles; technology has dropped in difficulty to fifth place.

• Average merit compensation increases are moderating to 3.2%-3.5% for 2025, down from 4.2% in prior years; fewer mid-year market adjustments are expected.

• Incentive compensation, including long-term plans for executives, is increasingly common, especially among larger firms.

Workforce composition and flexibility

• Only 16% of new hires are expected to be entry-level, the lowest on record, raising concerns about future talent pipelines.

• Loss control and risk management roles face high turnover and difficulty in filling positions, with no entry-level hiring reported.

• 83% of companies offer flexible work hours; hybrid work (three days in office) is the dominant model, with only 3% requiring full-time in-office presence.

• Most companies are not increasing in-office requirements, and remote/hybrid arrangements are expected to persist.