My first post in this series analyzed the data to show how different business functions (human resources, operations, technology, and sales) view business models differently—and how leaders should consider this when deciding on work-from-home or in-office policies. In this blog, I want to focus again on those four groups, but look at employee feelings and how this can affect employee response to new business models. I will also compare the insurance industry to banking and capital markets, where applicable.
Employee support influences business model decisions
Part of our back-to-work research involved asking whether employees feel generally supported by their employer in the insurance industry. Across all four categories, the majority said they felt “very well supported,” with sales being the most important. The terms “not well supported” and “not well supported at all” were low – excluding processes, where 44% said one of those.
However, in banking, only 20% of operations chose one of these options, and only 11% in capital markets. It is clear that the insurance industry is having a hard time supporting its operations compared to other financial services industries, which could be due to how far behind the insurance industry is in digital transformations compared to banking and capital markets.
Employee challenges in culture and training
We also asked participants to choose the top three challenges employees in their department face. The four groups in the insurance are marked “employee training” as number one or number two. The impact of telecommuting on training is significant, and should be taken into account when deciding any mixed business model. Strategies such as small-format training videos, manipulation, and even virtual reality are ways to address this concern.
There were many ideas regarding culture and talent that would influence the new business model as well. For 43% of operations, “company culture” was the third biggest challenge. Digital transformations have had a major impact on operations, but company culture is also affected by the fact that legacy insurance companies have been around for a long time and are highly focused on offices with many layers of leaders. Newer carriers like Root or Lemonade are likely to face less of a cultural challenge. Legacy companies need to develop their cultures to allow for more hybrid work by embracing modern technology and including agile philosophies in their operations.
This concern about culture and its associated implications can be seen in sales, technology, and human resources. Sales ranked “lack of adequate mental health and employee resources” in the top three challenges (40%), and HR ranked “motivation and burnout” second (57%).
Technology teams are the only group that doesn’t rank “employee training” as number one. Instead, their greatest concern is the “Productivity and Efficiency Approach”. Technology teams often bear the brunt of productivity initiatives – many of these changes are driven by digital transformations and new technology. In many ways, this can be seen as an umbrella related to other concerns about culture (including the three-way tie for third place). For example: improving productivity cannot happen without effectively training employees, attracting new talent, establishing a culture that embraces change and offering breaks to avoid burnout and keep motivation high.
When comparing banks and capital markets to insurance, the same patterns emerge. The bottom line here is that the rapid digital shifts and transformations at work due to COVID-19 have taken their toll on employees. It is imperative that the entire financial services industry makes sure that it supports its employees in terms of mental health and also in terms of business, such as having enough talent to implement goals and take advantage of new technology.
Employees highlight talent challenges
The final part of the research that I want to highlight is about the data on talent challenges that we asked respondents to agree or disagree with. Talent strategies are directly affected by new business models, where the focus on in-office work will limit companies to local candidates, while telecommuting can make training more difficult. Examples of phrases included:
- Existing flexible HR policies (flexible hours, mandatory vacation time, lax location options) will remain in effect once employees are called back into the office
- I’m having a hard time aligning my position and talent strategy
- Virtual training sessions are not as effective as in-person sessions
The biggest benefit here was the shift in alignment. My previous blog showed that sales and technology teams were more attuned to working remotely than HR and Operations, which were more inclined towards in-office work. When exploring these statements about talent challenges, this alignment shifted as technology and HR were more consistent in agreeing with this data, compared to operations and sales that chose “unsure” for many.
This seems logical. The statements focused on talent challenges and strategies, which are the bread and butter of HR. Technology teams are dealing with talent issues more than ever. Therefore, it makes sense that those involved in HR and technology would agree to many of these talent challenges. This is compared to operations and sales, with many choosing “not sure,” suggesting that while their group may face some talent challenges, it has less direct impact on them individually.
What does all this mean?
Insurance companies are on the way to becoming leaner and loosening the old silos between business and technology. The ability of carriers to navigate a business model that understands the complexities of what each department of the company handles is critical to future success. This shift has a strong impact on employee morale, which will naturally flow into how employees respond to different business models. Operations struggles with feeling supported and culturally transformed, while technology takes care of talent and morale. HR has concerns about motivation and burnout, while sales are feeling the pressure and need better mental health, employee resources, and a more focused approach to productivity and efficiency.
the support. culture. talent. These three are the downstreams that will directly affect the new business model. What is clear is that across these four groups – operations, sales, technology, and human resources – there are huge differences in how they feel and where they prefer to work. Not only is there no one-size-fits-all when it comes to business models for the insurance industry, but there is also no one-size-fits-all within the company itself. Of course, you are unlikely to be able to please everyone. But it is useful to think less of a holistic approach to where, how and when people work, and instead focus on the work arrangement best suited to that job function. You can end up with more satisfied – and therefore more motivated – employees.
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Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consulting with our professional advisors.