Employee Retention Strategies in Insurance Sector

Employee Retention St prescribegies in restitution SectorIncreasing wrings on the corporate to cut the be, resulting in frequent layoffs and downsizing, diminishing employee loyalty, absence of employment gage and increasing competition in the hunt for talent etc. be just a few reasons why the process of attr forming and preventing talent has turn an onerous task more than ever before. As the bluely talented lam chock up in boldnesss, across various take aims, kindles skills and job-hop from one company to another, managers see to be feeling the heat in countering abnormally lofty friction order. i of the stock certificate responsibilities of a manager or supervisor is to press the consummation done through the employees. muchover, when we say pass away, it is not just the basal minimum work to get by, except withal those tasks that ar perfect(a) when the employees atomic number 18 highly motivated to succeed, excel in their work, and continue to be committed to the organization. Managers and supervisors indeed engender it extremely difficult in charge their star performers satisfied and not wanting to shift their jobs.Employee retention is Copernican in almost all the strips. It is soulless to al broken in good community to leave your organization beca enforce when they leave, they take a centering with them the intellectual property, relationships, investments (in both age and gold), an occasional employee, or two, and a chunk of the organizations future day. Employee Retention Strategies helps organizations provide effectual employee communication to make better commitment and enhance workforce support for key corporate initiatives.The policy sphere of influence in India is rising rapidly to select in harvest-tide and employment opportunities. policy companies argon raw materialally benignant intensive, and man resources act as an undoubted differentiator. Quality manpower and its retention would act as aLit mus test. Turnover of sales force has been high because of low entry and exit barriers. The paper addresses issues of enlisting, retention, and derangement rate of sales force in insurance policy companies. An attempt is made to ruffle them to Maslows Need Hierarchy. A survey was conducted among 350 employees who worked in or had left insurance companies to analyze factors that inuenced their decisions and job pleasure. The data were treated with factor analysis. Factors such as guard Security, Social Esteem, and Personal Work Style emerged as the inuencers to pairing insurance companies. Primary ask and Social Self Esteem take were the factors associated with job satisfaction Stress, C beer Advancement, and Work Environment emerged as factors for deviation the companies.INTRODUCTIONIntense competition and globalization of business organisationes has put mounting pressure on organizations to deliver more and better than before. Organizations requirement to develop and deploy human resources that can articulate the vision of the organization and make teams with the synergy to perform at much higher directs.Human resource guidance (HRM) is a strategic and coherent approach to the way of an organizations most treasured assets i.e. the tribe working in that respect, who individually and collectively, contri thate to the achievement of the objectives of the business. Human resource instruction is evolving rapidly. The terms human resource occupy and human resources (HR) cast largely re commitd the term personnel management as a description of the processes involved in managing hatful in the organizations. Human resource management is a business practice as thoroughly as an donnish theory that addresses the practical and theoretical techniques of managing the workforce of an organization.The Human Resources steering (HRM) give-up the ghost includes a variety of activities, and the most historic among them is to decide what ar the s taffing call for of the organization and the ways to fill these submits i.e. whether to hire employees or use in estimateent contractors to hire employees to fill these postulate, to recruit and train the best employees, to gibe that they argon high performers, to deal with motion issues, and to ensure the organizations personnel and management practices conform to various regulations. Managing the organizations approach to employee records, employee compensation and benefits, and personnel policies atomic number 18 also the included activities. The diminutive businesses whether for-profit or nonprofit ones ordinarily subscribe to filter out these activities themselves because they cannot yet afford patch- or secure-time help. However, it moldiness be ensured by them that the employees ar aware of the personnel policies, which confirm to legitimate regulations.The HRM run for and HRD profession have undergone tremendous tacks over the past 20-30 historic period. Man y years ago, large organizations looked to the Personnel Department, mostly to manage the paperwork around hiring and paying the great unwashed. More crude-fangledly, organizations consider the HR Department as playing a major(ip) role in staffing, training, and helping to manage pot so that peck and the organization are performing at maximum capability in a highly fulfilling mannerHuman resource builds and drives the knowledge assets of an organization, the measure out of which has been established to be many times more than the tangibles. In the take scenario, it is be feeler important for organizations to focus on finding, developing, and retaining talented employees. This paper aims to enhance sympathy of the phenomenon of high employee upset rate in the insurance fabrication and factors that crest to job satisfaction of employees. Researchers have also made an attempt to integrate Maslows Needs Hierarchy to the underlying inuencers for the sales force of insurance com panies to join or leave the organization. The findings may be helpful for the companies to improve retention levels.OBJECTIVESEmployee overthrow is a larger problem currently approach by insurance companies, as a major part of their gross is at sea. Analyzing the causes of employee turnover is imperative for insurance companies. An exploratory survey is designed, keeping in mind following objectivesTo identify the factors which influence the decision to join the amends Industry.To analyze the factors which play a major role in job satisfaction.To identify the factors which influence the high attrition rate.To study and formulate the strategies for employee retention.EMPLOYEE belongings OVERVIEWBy looking in a dictionary, we are given that the intelligence operation retention has synonyms like preservation, maintenance, with jibeing, and custody. Not just the meaning, the concept has different perceptions for the employees and organizations. utile employee retention is a sys tematic effort by employers to make up and advance an environment that encourages current employees to remain employed by having policies and practices in place that address their diverse needs. A strong retention strategy get under ones skins a powerful recruitment tool.Retention of key employees is critical to the semipermanent wellness and success of any organization. It is a known fact that retaining your best employees ensures customer satisfaction, increased product sales, satisfied colleagues, and reporting staff, effective succession prep and deeply embedded organizational knowledge and l sop uping.Why are we touch on about employee retention now, when we also are talking about a reduced state workforce? The reality of hiring freezes and possibly even layoffs during frugal slowdowns means it is critical to focus on retaining and enabling our remaining people to reach peak effect. Lean organizations depend heavily on the transaction and quality of current employee s. Current employees have specialized, institutional knowledge.Employee retention matters as organizational issues such as training time and investment lost knowledge insecure employees and a costly candidate search are involved. Hence, the failure to retain an important employee is a costly affair for an organization. The importance of retaining the best talent in the organization is usually watchd by intelligent employersINDIAN INSURANCE SECTOR AT A regardThe insurance firmament in India is one of the booming sectors of the economy and is increment at the rate of 15-20% per annum. Together with banking services, it contributes to about 7% of the countrys GDP. The sector has terminate a full circle in India from being an open competitory trade to studyization, and back to a liberalized marketplace again. The government of India liberalized the insurance sector in March 2000, lifting all entry restrictions for private players and allowing foreign players to participate th e market with some limits on direct foreign ownership. Under the current guidelines, thither is a 26% equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49%. With several reforms and policy regulations, the Indian policy Sector has witnessed tremendous growth in the recent past. According to a report by the Associated put up of Commerce and Industry of India (Assocham), a growth of over 200% is credibly to be seen in Indian insurance business by 2009-10, in which private insurance business would grow at 140% in view of aggressive marketing techniques. Insurance companies in India are maturation vertically and horizontally bringing growth and new employment opportunities. even so after having so many private players in the insurance sector, quiet down the largest company is the government owned, life Insurance Corporation of India.Insurance sector is an intensively people-oriented business and human resources will be the undou bted differentiator. The quality of work force attracted and retained by insurers and how their abilities and ambitions are harnessed would be the litmus test for the intentness.Traditionally, a large number of insurance factors, who work on a commission basis, manage the insurance business. The turnover of insurance movers has usually been high in this business. The insurance sector faces high rates of employee turnover. The highest employee turnover is at the financial advisors (agent) level, where the entry barriers are low but targets and work pressures are very high.The insurance companies in India areBajaj Allianz life Insurance party containBirla Sun livelihood Insurance Co. LtdHDFC Standard flavor Insurance Co. LtdICICI Prudential Life Insurance Co. Ltd.ING Vysya Life Insurance troupe Ltd.Life Insurance Corporation of IndiaMax New York Life Insurance Co. LtdMet Life India Insurance connection Ltd.Kotak Mahindra Old Mutual Life Insurance LimitedSBI Life Insurance Co . LtdTata AIG Life Insurance family LimitedReliance Life Insurance Company Limited.Aviva Life Insurance Co. India Pvt. Ltd.Shriram Life Insurance Co, Ltd.Sahara India Life InsuranceBharti AXA Life InsuranceFuture usuali Life InsuranceIDBI Fortis Life InsuranceCanara HSBC Oriental Bank of Commerce Life InsuranceReligare Life InsuranceDLF Pramerica Life InsuranceStar kernel Dai-ichi Life InsuranceAgriculture Insurance Company of IndiaApollo DKV InsuranceCholamandalam MS public InsuranceHDFC Ergo course of studyetary Insurance CompanyICICI Lombard General InsuranceIFFCO Tokio General InsuranceNational Insurance Company LtdNew India AssuranceOriental Insurance CompanyReliance General InsuranceRoyal Sundaram Alliance InsuranceShriram General Insurance Company LimitedTata AIG General InsuranceUnited India InsuranceUniversal Sompo General Insurance Co. LtdVIEWS OF RECRUITERS IN INDIAN INSURANCE COMPANIESThe attrition rate is about 35% in the first year of recruitment. This goes down to about 18% by the fourth year. Most of those who drop out are non-performers, as told by the Executive Director of the Kotak Mahindra Mutual Life Insurance Company he attributes it to the high forethoughts on the part of the agents. Most people hold that they can make a lot of money in a short span of time. It is a high-pressure job. Sustenance requires constant networking and getting new relationships that requires a lot of discipline. MD Kotak Life Insurance opines that it is a sun skip industry, many people just want to join the race, but cannot retain the enthusiasm till the end of a year. The attrition rate in the industry is pitched between 14% and 38% at this rate it will soon rival the 50 per cent stir rate of the ITs-BPO sector. Country Manager, Tata AIG, argues that the industry today is more at an attractor stage insurers are also attracting a lot of talent from banking, closely Moving Consumer Goods, BPO-IT industries. Head (hr and Admin, HDFC Standard Life Insur ance) stated that attrition rates are at 14% in the industry. Companies have to go beyond building a brand to offer the agents careers and let them grow with the market. while retaining employees may be a problem, attracting irreverent talent is still comparatively easy. The slowdown in the debased Moving Consumer Goods and Consumer Dur commensurates sector and people trained by direct marketing companies like Amway and Orflamme, too find a way into selling insurance. Head (hr ICICI Prudential Life Insurance) opines that companies cannot hold on to people, especially among frontline sales force, and this will rise as the market matures, since people are actually experiencing large amount of money coming in. Managing director and CEO (Prudential Life Insurance), the hr challenge is being intercommunicate by offering employees knowledge and growth opportunities. The company offers opportunities for cross-functional learning, skills and talent development, thereby expanding ones j ob write. Further, employees also develop a smell out of belongingness with the company. Recruiters explain that high employee turnover rates of importly increase the investments that are made in the employees. The problem of losing funds in employee acquisition is prominent. Companies invest significant amounts of money and time in training in the sign phase but these investments do not always get converted into actual profits. In the case of the insurance industry, each agent level recruitment costs a company nearly Rs.5000, other associated costs of training and administrative service are also involved. Each agent works in a non-productive or partly productive mode in the organization for nearly the first 2-3 months. An employee leaving the organization within the first 6 months is a bad investment for the company. While most insurers were not unforced to share the number of staff members they lost to competitors and other sectors in recent times, industry sources indicate t hat newer companies like Reliance, Bharti Axa, IDBI Fortis, Pantaloons-Generali and others have been active in fresh recruitment of officials from established companies like ICICI Prudential Life, Birla Sun Life, HDFC Standard Life. literary productions REVIEWResearchers have done a literature review on the issues related to the reasons for and consequences of the employee loss and how the management may deal with turnover in various industries, in order to have a fair understanding of the strategies that can be adopted by the Insurance companies.William J Rothwell (May 2008) in his obligate, Motivating for Retention refers to motivation as a topic of never-failing interest. As organizational leaders begin a war for talent, they need to consider new ways to motivate people to stay. Since much look into indicates that people often make decisions to leave because of their supervisors treatment with them, it only makes sense to consider ways of improving managers treatment of worker s and this condition focuses on that bad-tempered issue. While many theories of motivation have been proposed, many managers today are looking for ways to retain their most talented people. One way to do that is to focus attention on how a manager treats the workers. This article also offers some thoughts on what behaviors to examine for improvement and has provided two instruments that may be helpful in doing that.Dongho Kim (2006) in his article Employee Motivation simply Ask Your Employees says that the imperative need of discovering, comprehending and implementing employee motivation has been a principal dread for organizations, managers and even first line supervisors, as employee motivation has been and will be the deciding factor in work performance as well as the success or failure of an organization. The purpose of this paper is to punctuate and analyze the necessary components of employee motivation so that the contemporary managers, especially those who are inexperie nced, can enhance their knowledge and understanding of employee motivation. If a company knows as to why its employees come to work on time, stay with the company for their full working lives, and are productive, then the company may be adequate to ensure that all of their employees behave that way. The priorities of employee motivational factors change over time, and there is more than one reason why these changes occur. The reasons may be the frugal conditions, change of the working environment or industries, labor market conditions, industry competitions, change in the workers attitude etc. An organization must realize that the employee motivation and its process are there to motivate its employees, and hence, the employee input must be wanted and included throughout this process.In todays knowledge-based economy, the most intriguing task before a HR Manager is to motivate and retain employees. Though various attempts have been made in this direction, there has not been much of success and no one knows as to what exactly is the dispatch to employees heart.Sanjeev Sharma (22 July 2006), in his article, A Right Way to Motivate an Employee is to Win his Heart, focuses on the reasons why motivation is ignored even though it is of greater moment motivation is intangible, drives all human actions, can be observed but not measured and is lost in a twilight order he compares motivation to that of a pop-up fly ball which can peg into cracks, if not handled or played effectively. Further, he explains the need for motivation and profile 10 areas that powerfully impact motivation which include economic rewards, advance and transfers, opportunity to grow, challenging and stimulating work, autonomy, leadership, informal psychic rewards, goals and fun. Helping the management team optimize employees emotions will enable the organization to make significant impact on the primary sources of competitive advantage in todays market place.Beach, Brereton, and Cliff (20 03) in their article Workforce turnover in first in first out mining operations in Australia An exploratory study. examined that the term turnover refers to employee movements that create vacancies within an organizational unit. These vacancies may be the result of resignations, transfers, retirements, dismissals, or the fulfilment of fixed term contracts.Jyothi and Venkatesh (2006), in their book Human Resource Management, have told that the application of skill or competence leads to performance and performance is the monetary standard for evaluating effectiveness. Therefore, a pay-for-competence program enhances productivity and product quality, reduces absenteeism, turnover, and accident rates.Campbell and Baldwin(1993), in their article Recruitment difficulties and skill shortages an analysis of labor market information in Yorkshire and Humberside, suggest that in many industrialized countries there is a concern that skills shortages and mismatches are appearing in the labor market and that policy makers are aware that recruitment difficulties and skill shortages may reduce the competitiveness of small and large firms.Islam and Rasad (2006) in their article, Employee performance evaluation by theAHP A case study, studies that employee performance appraisal has been practiced by numerous organizations since centuries. Though performance appraisal system has been debated by many, however, overall, it is viewed that performance appraisal is an inseparable part of organizational life.Wu (2005), in his article A DEA approach to understanding the performance ofTaiwans steel industries 1970-1996, mentions performance management as a complex problem and it involves various kinds of judgments about which performance measure to use. Evaluation scores depend upon these criteria heavily.Hale (1998) in his article Strategic rewards Compensation and benefits management. stated that employers cited recruitment costs of 50% to 60% of an employees first years salary an d up to 100% for certain specialized, high-skill positions.Bowen and Shuster (1986) in their article American professors A national resource imperiled. stated that while all constituting elements of an organization are important for its success, it is its enhanced ability to attract and retain the best quality talent that separates it from the others.Abbasid and Holman (2000) in their article Turnover The real bottom-line. Public Personnel Management sought to determine the impact of employee turnover on an organization and put in that excessive employee turnover often engenders far-reaching consequences and at the extreme may pretend efforts to attain the organizational objectives.Elangovan (2001) in his article Casual ordering of stress, satisfaction and commitment, and purport to quit A structural equation analysis. has argued that there is a reciprocal link between organizational commitment and turnover intention, i.e. humiliate commitment increases turnover intention, which lowers commitment further.Abdul Rahman, Raza Naqvi, and Ismail Ramay (2008) in their article Measuring turnover intention A study of it professionals in Pakistan. revealed that job satisfaction and organizational commitment had a negative effect on turnover intentions, whereas perceive alternative job opportunities had a significant positive correlation with turnover intentions and is the major factor associated with turnover intention among itProfessionals in Pakistan. Van beak et al. (2004) in their article Should I stay or should I go? Explaining turnover intentions with organizational identification and job satisfaction. have also place job satisfaction as a predictor of turnover intention however, they argue that it is a mediating variable between organizational identification and turnover intention. According to their study, organizational identification feeds into job satisfaction, which, in turn, predicts turnover intention.Gomez-Mejia, Balkin and Cardy (2003) in their a rticle Managing Human Resources have analyzed that mixerization is the process of orientating new employees to the organization or the unit in which they will be working. Socialization can make the difference between a new workers feeling like an outsider and feeling like the member of the team.Zheng and Lamond (2009) in their article Forthcoming Organizational determinants of employee turnover for multinational companies in Asia. rig out that training, size, length of operation and the nature of the industry are importantly related to turnover. Determining what constitutes high turnover is a complex issue, because there is no simple linear relationship between turnover rates and the social and/or economic performance of companies. Issues ranging from poor job fit, lose of recognition or support from senior management, uncertainty about the organizations future and poor management communication are some of the reasons why people start looking for other opportunities. Reasons that can be attributed to high employee turnover in the insurance sector areBeing an insurance agent in India is seen as a societal stigma as there is uncertainty of job and income attached to it. People join insurance companies as a part time job or a transgress filler occupation and not as a long-term career. truly few competent people want to become agents owing to low social status attached to it.It is a high-pressure job. It is expected from an agent to understand the customers needs and sell the products accordingly. This process involves a high level of persuasion and a sustained effort for a long period. A lot of people succumb to such pressures.The expectation achievement go adds to the turnover. Many people are lured to the profession with a high earning potential. However, to earn a decent income, agents require a lot of patience, perseverance, and persuasion in the field. During early phase, the earnings of the agents are low despite hard work. This expectation achievemen t gap leads many of them to break down in the initial period of joining the profession.Scarce skilled or experienced human resource in insurance market leads to wide scale poach and head hunting amongst the competitors. The industry has yet to witness mature hr processes, like work force planning, training, motivation, and retention. The lack of preplanned recruitment leads the firms to indulge in poaching human resources working in other insurance firms.With insurers having a high percentage of the workforce from multiple sectors (non-domain), the chances of losing employees to other fields, like Fast Moving Consumer Goods companies or other financial outfits, are high.Employee Turnover is maybe paid the least attention among various employees issues. It is shrugged off as inevitable. hardly a(prenominal) companies take a proactive approach towards reducing employee turnover. It always includes substantive costs of replacing the key employee who fall into the category of high pe rformers. replacement includes the costs of recruitment advertisement, referral bonuses, selection testing, training costs, etc. Moreover, turnover results in loss of time and efforts, low productivity, loss of morale, loss of knowledge and so on.DEALING WITH EMPLOYEE TURNOVEROrganizations that keep the front line staff motivated and equip them with the right tools are most likely to enjoy long-term superior performance (Rogers and Peccoud 2005). The challenge of creating a dynamic, enthusiastic, motivated front line environment is an opportunity in disguise for organizations. Organizations need employees who are committed, exible, and pretend to participate in decision-making. Retaining such employees in the organizations is becoming imperative in todays competitive environment. Behavioral research studies show that all human activities including jobs are directed towards satisfying certain needs. Patterns of individual behavior and motivation differ, because individuals search to fulfill different sets of needs in different ways as adopted from their environmental and social backgrounds. Maslow (1943) propounded the Hierarchy of Needs theory primitively applied as a general theory of mental motivation. However, the public utility of its theoretical model was adopted by organizational theorist McGregor in 1960, who applied Maslows theory in the work place. Later on, the Hierarchy of Needs theory has been adopted and incorporated into applications in many areas in business (Shoura and Singh 1998). In the management field, it is an effective approach towards understanding motivation. Motivation is committed to several levels of the needs hierarchy of human beings. Appreciation, love, respect and fulfilling work are several motivators other than monetary benefits that an individual looks for. An attempt is made in the paper to align Maslows Hierarchy of needs to the findings of the survey to offer a better understanding of employee turnover.Maslow suggests that each individual aspires for a higher-level unfulfilled need once they have gratified the lower order need. An individuals level of aspirations rise when needs on lower levels are satisfied. The lower four layers of the benefit are called deficiency needs or D-needs, physiological, safety and security, love and belongingness and esteem. With the censure of the lowest layer of physiological needs, if these deficiency needs are not met, the body gives no physical indication but the individual feels nauseated and tensed. Various levels of Maslows Hierarchy of Needs are analyzedin the stance of insurance agentsPHYSIOLOGICAL of necessity These include the most basic needs that are vital to survival, including the need for water, air, food, and sleep. These needs are the most basic and instinctive needs in the hierarchy. All other needs become secondary until these physiological needs are met. In the perspective of insurance agents, these needs are addressed by the compensation pl an. Insurance companies mainly work on incentive-based compensation plans, which lead to income uncertainties. An employee looks forward to a ample compensation structure, which would take care of all of his/her basic physiological needs. A robust, safe, and easy to understand compensation plan may retain employees who are striving to materialize their physiological needs. It is necessary for the companies to update the compensation plan with time, so that it fulfills the physiological needs of the individual and his/her family at different stages of their lives. precaution NEEDS Such needs are important for survival, but they are not as demanding as the physiological needs. Desire for steady employment, health insurance, safe neighborhoods, and shelter from the environment could be a few. There are two aspects of the security, which would concern a person in the insurance business. One is the personal physical security while on field and the psychological fear of job security wit h high targets is the second.SOCIAL NEEDS Maslow states that people seek to overcome feelings of loneliness and alienation. This involves both giving and receiving love, affection and the sense of belongingness. This need of an individual gets highly affected in insurance companies predominantly. Individuals do not gain a high status in society, which is attributed to the social stigma of being an insurance agent, and big target pressure causes withdrawal from ones family, friends, and relatives. Employees have been found complaining about not being able to spend ample time with their family and friends. The insurance companies may compensate for this by creating a fun-filled work environment and developing a conducive work environment. Teambuilding initiatives can be taken by mangers to inculcate the sense of belongingness.NEEDS FOR ESTEEM A normal human desires to be authorized and valued by others. People engage themselves to gaining recognition, attaining a sense of contributi on, feeling accepted and self-valued, be it in a profession or hobby. Imbalances at this level can result in low self-esteem or an lower status complex. Those working as employees in an insurance company are viewed as people of comparatively less ability. The attitude is developed due to citizenry recruitment undertaken by insurance firms, where not much focus is move on selecting suitable candidates. This diminution in esteem leads to leaving the industry on getting a better opportunity. Many companies are counselling on creating a positive image of the industry by victimisation the media, though much is yet to be done. Measures like change in job title and nature of the job could be positive go in this direction. As the industry matures, the positioning needs a change from being a mere moneymaker option to an industry that provides learning and high growth opportunities.NEED FOR SELF-ACTUALIZATION Maslow describes self-actualization as a persons need to be and do what he/she was born to do. These needs make themselves felt in signs of restlessness. A person