If there's ever been a time when we were all painfully aware of the war over talent, it's now. Nearly every client we work with faces the same challenge: that of attracting and holding on to their most precious resource—people. We see this in many functions within the sector we serve, with underwriting and project management topping the list.

It's not surprising that underwriting skills are a priority, given where we are in today's insurance cycle. In spite of all the investments in information technology, automated underwriting tools, rules engines and the like, the demand for senior and experienced underwriting talent is at its highest level in recent history. People remain critical in today's underwriting environment. And for many, underwriting talent within and across regional job markets is shifting.

A similar tightening in human resource demand applies for many of our clients' project management functions. Successfully leading and delivering large, complex business transformation efforts requires extensive project management skills. Most clients are in the midst of large transformation programs involving some combination of changes to processes, technology, and people. Nearly every client is also struggling to retain their best project managers, or is at least seriously concerned about retaining them.

Another challenge we see is the changing needs of the work force. A balance between lifestyle and work is increasingly important to employees. As I've learned too well from my daughters, today's emerging workforce wants a more flexible work environment—certainly more flexible than most of us could have imagined. Yesterday's traditional, office-based work environment of 8-5, five days a week continues to change to meet evolving demands.

Whether in underwriting, project management, or another critical area within the company, costs are also under pressure and, in many cases, continue to rise. This increase in costs will continue to put pressure on the softening pricing cycle. For many of these areas in which skills are in short supply, we see salaries inching up, and there appears to be a bidding war for the best and the brightest. At what point will this end?

What to do? The solutions are straightforward but often overlooked.

Make sure you are hiring people for their long-term fit. Too often, companies look at raw skills as the most important criteria for a new hire. And certainly, skills match is important. But equally critical is whether a candidate will be a good fit with the culture. Many of our clients conduct behavioral and cultural assessments to ensure that a potential hire is a good match. The extra cost and effort of hiring the right people are worth it in the end.

Offer flexible working arrangements to more of your work force. Working from home, flexible hours, and so on are all becoming more the norm than the exception. Not only does this work well for the employee's work/lifestyle balance, but it also helps the employer in terms of employee satisfaction and reduced office expense. Of course, you have to have the metrics, information technology, and management system to create this environment.

Maximize virtual office arrangements by hiring personnel outside your market, and use home-based workers to bring talent aboard. Of course, this works best for skills like underwriting, but it can also work well for service centers, technology development, and other functions that involve less face-to-face interaction.

Measure employees' satisfaction and make the effort to understand their likes and dislikes. This can be tricky, especially when no baseline exists. Clients who measure and act on employee satisfaction create a better work environment that continually improves.

While none of these ideas are new, they may serve as a strong reminder for some. Good luck in your ongoing battle in the war over talent.