Human resource plays a vital role in the development of an organization making it an invaluable asset for organization success. Since it is a business or industry specified function, it is necessary for it to evolve to the same degree as the industry does.
With the recent advancements in the business world, the roles and functions of HR are undergoing numerous transformations. In today’s growth fierce market competition, HR’s day-to-day role is becoming more challenging and strategic. Issues and challenges can range from retaining talented employees, attracting new talent, prepare the employee to accept challenges, facilitate healthy work culture for employees, and better performance. The dimensions of challenges faced may vary from industry to industry or business to business.
One of the most recently advancing sectors is the Insurance sector which includes banking and other service sectors. In recent years, low insurance market penetration rates and wide market opportunities have attracted many private companies towards the insurance sector, giving tough competition to the old insurance giants. However, effective and efficient HR services can make it possible for any company to function smoothly as well as have an edge over its competitors.
Insurance industries face their share of challenges and issues. With the constant internal and external pressures, HR of insurance industry need to constantly respond to such changes and need to build suitable model and strategies to cope up for effective management.
Internal pressures may include, infrastructure, workforce planning, and management, cost management, globalization of the workforce, training, and development. External pressures can be changes in government regulation, changes in market conditions, changing employees, and customer demographics. Other challenges may include, difficulty in retention management, managing workforce diversity, rising training, and replacement costs, increasing the turnover rate and talent crunch. Among the greatest challenges faced by HR, according to Brian little, an HR executive of Zurich Insurance Co., is that “the insurance industry isn’t necessarily a destination for top students,” requiring greater effort and better presentation than in some other financial industry sectors.
These challenges check their ability to adapt to changing business environments, improve work efficiency, and capitalize on growth in the sector. HR needs to analyze, innovate, and reconstruct existing policies in order to keep up with the frequent changes.
An efficient way to earn an edge over a competitor is to stay updated on the latest technology relevant to the company’s growth. HR should work closely with the companies IT function in order to understand the specific set of skills required by an employee for making a significant contribution to the company’s growth.
One of the primary goals of HR is to ensure the growth, development, and satisfaction of the company workforce. To meet the objectives of a low turnover rate, reduced recruitment costs, and a motivated workforce, HR needs to engage in aggressive planning, communication, and effective execution.
HR needs to be responsive to the ever-changing market conditions in the industry. To cope with the changing customer preference, government regulations, competitor’s strategies, and latest innovations in the sector, HR has to conduct market researches in order to get a better view of the changes and construct the best strategy to deal with the same.
With rapid, unpredictable, and profound transformation underway in the insurance industry, the issues HR must face having increased multiple folds and calls for rapid involvement. There is a need for creating new models and strategies, to adapt and evolve to such changes by HR.
You may also want to read: Three Major Challenges Coming in the Way of HR Tech Adoption
Originally published April 1 2018, Updated July 22 2021
Human Resource Management, also known as HRM, is the function that manages employees, starting from their recruitment and induction to development, appraisals and promotions, with the aim of maximizing their performance in-line with organizational objectives.