For those insurers seeking competitive advantage through customer- centricity, they may need to re-evaluate their human capital strategies to ensure better integration into the business.
While many insurers strive to be more customer-focused, to date, we see their human resources functions often focusing more on cost-cutting and head-count reductions, which may conflict with the success of their long-term goal of greater customer-centricity.
Our in-depth work in the areas of talent and change management indicates strongly that insurers should take a more far-sighted approach, and develop talent strategies to build the right mix of people to deliver their business aspirations.
We have observed that, too often human resources plans address the situation today - or provide generic programs - without real consideration of what kind of people they will need tomorrow. This is unfortunate, because there is limited scope to shrink your way to success.
Among the findings of our 2013 research report, The Valued Insurer, developing talent strategies that really align the workforce to the needs of the business was a key factor in achieving profitable growth.
We found that among the best performing insurers, those who have achieved sustainable growth have done so by finding ways to differentiate themselves from the crowd. And how you manage your people can play a really important part.
To do so, companies should develop their own unique talent plans that map out how they will acquire, develop, engage and retain their talent. The first step, however, is to ‘tune in’ to your talent needs by asking, ‘How will our organization win in the future?’
This involves considering both the ‘top down’ and a ‘bottom up’ perspectives. From the top, you need to look at your strategy, your strengths and what it means to be successful. Then, from the bottom up, you must look at what you’ve got in terms of capable people, critical roles, and what makes a high performer in those positions?
For example, many insurers’ top down strategies today emphasize embedding greater customer-focus across the organization. On reviewing their bottom up analysis, these firms may realize that, to really instill a customer-culture, they need to apply practices from other industries that are leaders in customer experience and satisfaction.
This might mean that an insurer hires Disney, McDonald’s or Tiffany & Co. to deliver its sales force training. Or, insurers may decide to look far beyond their own industry to recruit leaders, managers and front-line staff from top retailers, hospitality or service industries.
These are the sorts of paradigm-shifting discussions we often have with our clients at KPMG’s Global HR Transformation Centre of Excellence, where our team of experienced professionals help clients from many industries develop strategies to derive measurable value from their people.
It’s important to note that talent development must go well beyond selecting charismatic leaders, and extend to the frontlines of customer interaction. We consider that sometimes too much is made of leadership, since leaders come and go. Instead, you need to design the firm so that everyone can perform well, build distributed leadership and a high performance system that is sustainable.
Among the benefits of crafting a strategic talent plan, there is considerable opportunity for financial firms to address a common issue, namely the often enormous variability in performance around an organization. This can be evident in terms of wide variation in sales numbers or customer satisfaction scores from one location to another.
A talent plan that looks at your top performers - and creates consistent practices for how people will be led, deployed and engaged - can make a tremendous difference.
But to achieve all this, organizations must scrutinize their HR function to assess whether it has the mindset, structures and technologies to build and execute the right talent plan. Talent management is a business-critical process, so you need the right architecture to tune in to your firm’s specific talent needs to build sustainable value for customers, investors and other stakeholders.