June 22, 2009

Shortage of Skilled Manpower Hit Insurance Companies

By Patience Saghana
Dearth of skilled professionals in the insurance industry has resulted in intensive head-hunt by operators, a situation that is now becoming worrisome to management of most companies, Patience Saghana writes.

An Abuja based insurance company    recently opened for business    recently only to be greeted by an avalanche of resignation letters from more than ten of its staff. The management was taken aback by this development.

It asked to know what the problem was and it took no time for answers to come. Another Abuja based insurance company had hired them, was the answer the management got. Things never added up well for the company that day as the thought of how and where to hire another set of capable hands dominated discussions all through.

This is just one episode of similar episodes currently rocking the insurance industry. The war for talent is putting increasing pressure on organisations to look beyond salary and financial benefits to keep hold of good staff. Poaching in the insurance industry is not unconnected with shortage of trained professionals in the industry. This is even made worse by companies’ unwillingness to spend money on training and education of staff for the fear of losing them to their competitors at the end of the day.

One of the most provoking things faced by any insurance company today is to spend considerable amounts of money training staff, only to have them head off to join another firm when they are approached with a better offer.

Insurance companies adopt different strategic growth plans to drive home their point and any insurance professional or employee that does not or failed to key into to that strategy is rendered redundant and unproductive.

But some of the poached staff or ‘unproductive’  argue that most insurance companies’ lines of communication have never been or are hardly opened and transparent to allow room for improvement on their part where are presumed shortfall in their expectations.

Worst hit are smaller companies where communication is critical. When companies communicate with their staff in an honest and frank fashion, this interaction helps create a team feeling, a sense of unity, of being appreciated for the work performed. The lack of communication breeds mistrust, lack of unity and creates poor morale.

But industry experts believe that talent crunch in the sector will push salaries even further. There is a demand for qualified and skilled professionals with knowledge and technical know-how to drive the growth of companies whilst new players are looking for experienced hands to set up their businesses; the old players are trying to retain their best talent to be able to prosper well yet lose them to competitors somehow. This tussle has borne good fruit for jobseekers in this domain that are getting unbelievable compensation packages with just a few years of experience under their belt.

Mr. Sakiru Oyefeso, Managing Director of Staco Insurance Plc paying high salary might not just be the solution to retain staff or an end to prevent poaching, adding that  a company’s employees must be able to key to the unique culture of the company he or she works for else the will be trouble.

“You also need to invest the time in creating a team that each individual feels part of, and integral to. Nothing will help you lose good staff quicker than taking them for granted and, more specifically, restricting their development.”
Oyefeso said, “Most often my good staff are the ones who will continually look to better themselves and be challenged. If I can aid them in their efforts in a way that they see is of value, I’ll retain them.

“The key is to make sure that the job is interesting and challenging, and that people can see their careers developing. Salary and extras have to be up to the market rate, but unless they are way adrift pay will not be the main reason why people leave.”

Developing a proactive strategy to keeping key employees is essential. Whether it means identifying employees that contribute the most to the bottom line and developing programs that will satisfy them, providing, compensation programs that provide the types of rewards that are important to each employee or taking a closer look at the overall organization’s culture, some immediate actions must be taken.

Make the necessary adjustments to ensure that employees are effectively aligned with what the company needs them to do and what they are best at and enjoy doing. Employers that make a significant percentage of the compensation package variable will benefit both the organization and the employee by encouraging high-calibre performance.

Although job fit is important, culture fit determines whether someone is highly likely to remain with an organization. Every organization has its own unique culture or value set. Most organizations don’t consciously try to create a certain culture. The culture of the organization is typically created unconsciously, based on the values of the top management or the founders of an organization. Employees commit to and want to remain with an organization whose culture they connect with.

Dr Justus Uranta, Chief Executive Officer of Niger Insurance Plc said the dearth of professionals in the insurance industry would poised more problem for the industry if efforts are not geared frantically to breed new generation professionals that would be adequate and also take over in order the match the growth of the sector.

He believes that the potential growth of the insurance sector would be greater in the next 10 years. “On the assumption that the Nigerian economy grows at a rate of 13 per cent per annum over the next 10 years, the insurance sector should grow a nominal rate of 35 per cent per annum.

Uranta said, “Despite all the opportunities open to the Nigerian insurance market there are avalanche of threats militating against the growth of the industry. While majority of these threats are self inflicted due to the quick-win approach of some of the players, other threat to the growth of insurance market in Nigeria includes the structure of same game, same rule and same players approach to the practice of her players in the industry

“Poaching is quietly prevalent in the insurance industry, particularly with new waves of set-ups that have urgent need for highly qualified underwriters. The easiest place for new employers to find staff is in already-established rival companies that stand to lose a great investment in their professional employees”.

Mrs. Helen Oyitso Deputy Managing Director of NEM Insurance Plc said the fact remained that insurance companies in the country are growing at a rate that it is becoming increasingly difficult for the available human capital to match its tempo of growth.

As the industry grows without corresponding growth in manpower, Oyitso was of the view that it would likely create problem for the sector in the nearest future if the situation is not addressed on time.