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10 Ways to Transform your Insurance HR Function Forever

“Without doubt, the head of HR should be the second most important person in any organization.” Jack Welch, Winning.

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The Status Quo: 2nd Class Citizen Treatment

If insurance is such a “people business” as everyone I’ve met in the industry keeps saying, why is it that HR folks are almost universally treated as 2nd class citizens? Here’s a quick story to set the scene:

I once tried to apply for a senior HR position that became vacant at a large company where I was leading a sizeable portfolio. The feedback I received was that I was needed in the "business” and we should look into my HR aspirations in the future. The call for further discussions never came of course.

Some of the most valuable assets in insurance are (1) investments and (2) people (don’t forget the license!) People costs amount to circa 60% of the industry’s expense ratio – excluding acquisition cost. Still, the HR department, which looks after this undoubtedly important and super costly “asset,” is often relegated to mundane operational tasks and referred to as the back office.

Something is clearly off in the way we look at, and run, HR in the insurance industry. The status quo needs to change pronto. How?

10 Tips to Transform how we View & Operate HR

> The Discipline of Culture Change: Stop referring to HR as the “back office” or “support function” to underwriting, sales, & distribution. All functions collaborate to form “the business”: HR, claims, risk engineering, finance, and so on. Don’t make this a New Year resolution. Start NOW.

> Set HR Free & Outsource Operational Functions. The role of most human resources professionals often gets limited to the operational comp & bens “trap.” This is an important function, no doubt, but it can be easily, and more efficiently, outsourced.

> Hire a Human Resources Business Partner (HRBP): Because HR folks are entrusted with the uber important people asset, their focus should be less on operations and more on supporting managers and executives in the areas of:

> Talent.

> Culture.

> Engagement & communication.

> Change.

> Promotion: Promote from within without breeding complacency and killing innovation. Infuse the organization with new blood when appropriate. Regardless of whom you promote, you should run a meritocracy where the best people are given the top jobs.

> Give someone the opportunity I was denied: Hire non-HR people into senior HR roles.

> Learning and development (L&D):

> View it as an investment, not an expense.

> Use it as a recruitment, retention, and future leader-spotting tool.

> Design it with cultural and linguistic diversity in mind, especially when operating globally.

> Make it a platform providing the staff opportunities to grow their internal and external networks.

> Compensation:

> First it’s NOT all about money. Incentivize financially as well as through inclusion, special projects, internal and external events, and recognition.

> Not all employees should be compensated equally. Welch’s 20/70/10 Rule should provide good guidance.

> Incentivize for the long-term.

> Over-pay top performers.

> Incentivize based on outcomes, not formulas. Though standardization is good, do allow leeway and differentiation at business unit and local levels when raise, bonus, and stock grant time come around.

> Retention: Never get in the way of your employees’ advancement and progress once they decide to move on. Don’t start planning the going-away party as soon as they indicate they want to resign either! Fight like hell for your keepers, but do try to help them if they want to move to another country, another department, or even across the street to the competition. Your priorities should be in the following order:

> Retain them within your team and offer a clear career progression path;

> Retain them within your company by offering developmental opportunities beyond your department;

> Introduce them to a customer, broker, or supplier. Ours is a small world, so always treat people with dignity and respect.

> The Competition: Your people are your greatest asset. The sharks (your competitors) will relentlessly circle around your top talent and try to lure them away (steal them basically).

> Your ultimate goal as the executive is be to repel the sharks and retain your key talent.

> For your top performers, the bar should be set so high that the sharks are at best discouraged and at worse hurt if they poach your people.

> Diversity in General: Make it a point to promote diversity in the workplace at all levels of the organization.

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> Diversity @ Women in Insurance: It is useless to have a 50% female staff population if only 6% (which is the statistic in the US insurance industry by the way) occupy C-suite level positions. Shocking, I know. A couple of TIPs from The Insurance Management Playbook to help you change that:

> L&D programs are a great venue to stress the need for diversity. Include women in senior-level talent development programs and place them on career succession plans.

> Require your HR recruitment team to find female candidates for every mid- to senior-level managerial position. You should not have quotas or preferential treatment, as you ought to run a meritocracy. However, do make sure that the female candidate option is always on the table. This will raise awareness about the need for gender-diversity in the workplace. Trust me it works.

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