While talent has been a major focus for the insurance business for the past decade, the pandemic and the Great Attrition have generated a new feeling of urgency: according to a recent McKinsey worldwide poll, 40% of employees are considering quitting professions in the near future. In this new environment, insurance leaders must restructure their talent models, rapidly build new skills, and embrace new ways of working.
We recently assembled a panel of chief human resource officers (CHROs) from top Asian insurers as part of our Asia Insurance Executive Roundtable (AIXOR) series. We address eight imperatives for insurers to rethink their HR strategy across three crucial areas, drawing on the views of these HR experts, as well as McKinsey’s research and viewpoints.
Elevate HR ownership
1. Form a ‘G-3.’ Historically, the CEO and CFO have been in charge of performance and value management. Insurers may guarantee that talent is an intrinsic part of all strategic decisions by enlarging this group and forming a “G-3″—CEO, CFO, and CHRO. This trio of leaders should collaborate to create a strong sense of purpose, design a culture that attracts and maintains top talent, implement innovative methods of working, and allocate the resources needed to nurture and grow its employees.
Thankfully, HR professionals in the Asian insurance business are well positioned to develop the new talents and mentality required by the G-3 model, as more than 50 percent of CHROs in Southeast Asia bring experience from outside of HR.
2. Make talent a board priority. Board members may be powerful allies in driving the talent agenda forward by serving as role models, coaches, and guardians of a long-term strategy for recruiting fresh talent. More than half of board members reported an interest in devoting more time to cultivating corporate personnel and culture in a global study on board priorities. The G-3 should actively organise and shape the board agenda, which should include expressing an inspiring mission, establishing talent and culture goals, succession planning for a larger set of essential roles and competencies beyond the CEO, and oversight and direction to develop future-proof capabilities.
Drive more impact
3. Map talent to value. State-of-the-art HR departments identify which individual positions are most important for value development and ensure that the proper personnel fills those responsibilities. Important responsibilities are not necessarily organised in accordance with organisational hierarchy, function, or employment level. Critical jobs in insurance, in our experience, frequently involve asset liability management and capital management, underwriting and pricing, customer analytics and distribution, and claims and customer care. Despite the fact that some of these roles are several levels below the C-suite, they provide disproportionately enormous value to the firm. For these roles, HR professionals should prioritise talent recruiting, development, mobility, and performance management.
4. Develop skills at scale. As artificial intelligence and other disruptive forces upset the industry, Asian insurers must recruit and create new talents at scale, particularly in digital capabilities, sophisticated analytics, customer experience, human-centered design, and agile. To do so, insurers will need to tap into new and larger talent pools across a broader geographic range, especially as remote work grows in popularity. HR directors will also be expected to foster a more inclusive culture, accept new ways of working, and integrate creativity and innovation into traditional learning and capability-building approaches.
5. Invest in employee training. The moment has come for insurers to embrace a comprehensive, people-centered approach to the insurance employee life cycle. HR directors can utilise customer-experience thinking to offer high-quality experiences targeted to distinct employee segments in the workforce—paying special attention to the moments that count and drawing common threads across employee segments. The requirements and difficulties of top digital talent differ dramatically from those of frontline salespeople in insurance workforces. Employees want meaningful relationships at work, not just transactions, according to our research on the Great Attrition. HR directors must take care to humanise these interactions, such as celebrations, difficult dialogues, and performance reviews.
6. Revitalize the human resources function. In order to effectively drive these talent imperatives, the HR function must adopt a new model. This includes increasing its people’s strategic and commercial acumen (through capability building and recruitment); becoming a “early adopter” of other imperatives, such as talent analytics and agile ways of working; and embedding itself in core business programmes and journeys to become a transformation engine from within, rather than a support function on the outside.
Unlock new sources of value
7. Improve people analytics. Today, the immense breadth and depth of people data are underutilised. People analytics has the capacity to find talent impact levers and build individualised talent journeys that enable individuals to maximise their potential, shape meaningful professional-development routes, and add value to the firm. While use cases span the whole personnel life cycle, insurance companies have mostly used new people analytics capabilities to improve digital talent recruitment, monitor manager effectiveness, promote employee retention, and identify high-potential individuals.
8. Be flexible. Insurers are among the most conservative organisations, with isolated functional structures and classic tiered hierarchies. But, the future of insurance will necessitate simpler, faster, and more agile operating models capable of rapidly adapting to changes in the external environment. Less organisational layers, a shift to cross-functional teams and workflows, and empowered business units and teams are all part of this. We have seen a significant increase in productivity and employee engagement in teams that have implemented agile working approaches across industries and locations.
Asian insurers acknowledge the need for decisive action to respond to industry headwinds and maximise their talent. But, most are still at the start of their trip, and some are focusing on small steps. We advocate for a comprehensive approach to reforming talent strategy across all eight imperatives. Only then can insurers create a talent-first company capable of thriving in the new normal.