Financials

War For Talent: Insurance As A Retention Tool

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<p style="text-align: justify;">Covid 19 and the war in Ukraine were the latest additions to an already challenging business environment. Both events have created waves of fundamental shifts, which the corporate world is still struggling to digest and adapt.&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Challenges in the Workforce Market&nbsp;</span></h2><p style="text-align: justify;">The global war for human talent is one of the greater challenges still unfolding. The rapid digitization in multiple industries is fundamentally changing the talent skills required, with the competition being global and across industries.&nbsp;</p><p style="text-align: justify;">At the same time, the great resignation effect is spreading around continents with alarming speed, creating additional pressures on the workforce market.</p><p style="text-align: justify;">Employee&rsquo;s expectations are moving fast towards flexibility, work-life balance, and workload management, pushing resignation levels to record highs. On the employer's side, most corporates are still relying on a &ldquo;physical presence&rdquo; model, with fewer global companies moving to hybrid or remote models after the first Covid waves of isolation.&nbsp;</p><p style="text-align: justify;">However, the business handling of the first Covid wave ended up with multiple exhausting virtual meetings and an overwhelming workload for the employees, reaching fast burnout levels.&nbsp;</p><p style="text-align: justify;">An illustrative example of quick and bold decisions was AIRBNB, announcing the new policy anytime, anywhere for their workforce. Interestingly, on the announcement day, they got one million hits on their recruitment page.</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Employee Expectations and Personnel Policies</span> &nbsp;</h2><p style="text-align: justify;">Employee surveys reveal a growing desire for flexibility (work-life balance) which represents 50% resignations, anxiety, and stress regarding workload (4 out of 10) and severe concerns for mental health and well-being.&nbsp;</p><p style="text-align: justify;">Again, some global corporates (Google, Verizon, Cisco) are pioneers in shifting personnel policies on expanding parental and sick leaves, providing flexibility and on-site services.&nbsp;</p><p style="text-align: justify;">In parallel, surveys also reveal a shift in expectations that might require more fundamental model changes, such as pay for performance and not attendance, along with managing people and not workload.&nbsp;</p><p style="text-align: justify;">To make things more complicated, work personas are not anymore unified in terms of attributes and expectations, implying that employers need to do more research on desired clusters and traits before aligning HR strategies. Competing in a global workforce marketplace is already a reality that provides more choices to employees, and there is a clear trend that their preferences are irrelevant to industries.</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Solution to Handling Loss of Talent</span></h2><p style="text-align: justify;">Despite the multiple and complex challenges that employers are facing, there is certainly good news in handling talent and loyalty, such as Insurance.</p><p style="text-align: justify;"><strong>Health Insurance&nbsp;</strong></p><p style="text-align: justify;">In all the surveys, health insurance and vested interest are scored high, among the first five factors of choice to stay or accept a job offer. Health insurance in the US market scores at 56% (factor to stay), whilst 46% of respondents consider this a factor of choice.&nbsp;</p><p style="text-align: justify;">In addition, 47% of respondents would score high on the preventive and emergency care components. Therefore, not only the concept but the necessary inclusive design and respective features really matter. The same thing holds true for vested interest schemes (group pension benefits and deferred rewards).</p><p style="text-align: justify;">Employees are scoring high the clear evidence of performance rewards (not just compensation) and a sense of common purpose and partnership towards the same goals. Vested interest schemes are flexible enough to reflect loyalty and performance at the desirable mix, helping greatly to reduce attrition and the respective implicit cost.&nbsp;</p><p style="text-align: justify;">So ultimately, insurance is one of the tools that corporates can put in motion to address the talent challenges but obviously not a pill to cure everything.&nbsp;</p><p style="text-align: justify;">In other words, insurance cannot compensate for gaps in leadership traits or subsidize the absence of clear and effective strategies and tactical execution. The great value of insurance is that you have a practical tool to show that you care.</p><p style="text-align: justify;"><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="https://www.linkedin.com/in/kyriakos-apostolides-98348a62/">Kyriakos Apostolides</a></em></span></p><p style="text-align: justify;">&nbsp;</p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered by Kyriakos Apostolides</span></h3><h2 style="text-align: justify;"><span style="font-size: 12pt;">1. What are talent retention strategies?</span></h2><p style="text-align: justify;">Talent retention strategies are broader organizational initiatives that embrace multiple business aspects, over and above HR policies.<br />For example, decisions on reward definitions or talent clusters and framework, traits needed in managing talent, evolve as a set of broader enablers to serve business development.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. What are the pros and cons of health insurance?</span></h2><p style="text-align: justify;">Health insurance is a common tool used by many companies with obvious pros. Cons are really related to cost, thin features set up and quality of services from carriers. Cost is a corporate expense, hence a tax-efficient tool. Careful research and design on carrier selection usually help to lower the other risks.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">3. What can HR do to improve employee retention?</span></h2><p style="text-align: justify;">HR is by default in the driver's seat for retention strategies. What is important by experience is associated with inclusive design and alignment with the broader business strategy. In addition, HR shall watch out for inconsistencies and value destroyers once the strategy is formed and implemented.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">4. What can employers do to attract better and retain talent?</span></h2><p style="text-align: justify;">Attraction and retention start with an in-depth understanding of the audience.<br />This is not a unified cluster. Hence, it is paramount to dive deeper into attributes and expectations and then decide where you want to compete.<br />Most advanced corporates are already using stay rather than exit interviews, a clear sign that they do not take things for granted.</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">5. What is the best way to motivate retention?</span></h2><p style="text-align: justify;">Make it a primary Key Performance Indicator for the organization and link incentives and career paths of management with it.<br />The end state shall look like a culture embedded within as a key driver for business growth.<br />To this end, measuring the cost of losing talent is a key buy-in for all stakeholders.</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>
KR Expert - Kyriakos Apostolides