Strategic Priorities For RestInsured UK – HR Plan

Human Resouce Plan Impacting Business

Background and Problem Situation of the Organization

The significance of human resource management (HRM) in strategic management of organizations has been well acknowledged. HRM is a function within an organization that concentrates on recruitment, management and direction of human resources. It further deals with the issues pertaining organization development, performance management, benefits, safety, wellness, employee motivation. Organizations are to ensure a robust HRM plan and integrate the same into the functioning of the organization to achieve best outcomes. Companies are required to be adaptive, resilient, and responsive to changes to become customer-centered. Such an environment is crucial for the effectiveness of HRM is crucial to business success. The present report is based on the case study of RestInsured UK which is a multinational insurance business operating in USA, Western Europe and Asia. With a base of 30 million customers and around 15000 employees, the organization strives to achieve epitome of success in near future. It is to be noted that the business has been failing to address challenging market conditions including evolving customer needs and financial pressure. The need of articulating a new strategic plan has been acknowledged that would focus on different aspects of operation management. The report aims at contributing to the development of the business plan within the UK and ensures the provision for changes needed for responding to the challenges of the UK market. The objective is to deliver the benefits needed by the RestInsured Group. The written document focuses on the priorities for the organization for the next three years. Specifically, the report outlines the analysis of the strategic priorities for the UK business. It then identifies any immediate and longer term risks for the business in relation to HR and proposes solutions for addressing them. Further, a persuasive business case is created that encompasses the capabilities, budget and resources that would be required for delivering the proposal.

RestInsured Group (RI Group) is a multinational insurance business that as a global presence with three operation units namely RI Asia Pacific, RI UK and Bart National Life Insurance (USA). The company had been established over 80 years ago with the headquarters at UK. Since then it has witnessed growth principally as a result of acquisition into the leading Life and Pensions provider in the UK. At present it primarily focuses on savings and insurance products. As per the reports of the last financial year, RI group had around 15000 staff employees and around 30 million customers. They are one of the best capitalized insurers in the world that has a capital surplus estimated at around at £3.1 billion and £300 billion of assets under management. The company is a noted insurance provider in the UK that provides general insurance and pension products. The customer base of the company is estimated to be at seven million. The head office of RI UK is at Birmingham. The UK business has two Divisions – General Insurance and Life & Pensions. It is to be noted that each has a separate executive teams, that reports into the UK CEO. The company on last July had acquired Southern Life that was a competitor focusing on long term savings and investments products. An instantaneous priority has been felt for the UK businesses to streamline.

Strategic Priorities for the UK Business

The problem situation for the RI group relates to three precise concerns. These are tougher trading conditions, changes in customer habits and demands, and stringent government regulations. Further, another challenge within the UK Life and Pensions Division is related to securing the integration of the newly acquired business. Tougher trading conditions are the impact of economic downturn in the market. Further, growth potential of competitors also leads to such challenges. The company therefore acknowledges the need to ensure increased capital for meeting forthcoming regulatory demands. Economic downturn refers to the fall in real Gross Domestic Product (GDP), as a result of which there is lower inflation, falling rate of economic growth and lower investment. The condition compels organizations to come up with strategies that can enable increase in sales through focusing on competitive advantage. During an economic downturn, trading conditions are difficult since marketing tools are not aligned with the needs of the changing market (Bratton and Gold 2017).

RI group further faces challenges due to an evolving nature of customer demands and habits. The rationale behind such shift can be attributed to technologically sophisticated consumers. In addition, there has been a rise in custom-built retirement plans that have actively met the needs of the customers. As opined by Brewster, Chung and Sparrow (2016) the modern day customers are focused on investing in a smart and effective manner that can help them achieve benefits on the long run. The contemporary customer might be putting forward vague demands that are also unstructured for modern processes. The rapid advancements in the era of technology adoption indicate that the expectations of the customers are novice, and create a conundrum for companies that aim to cater the needs. Coming to the challenges faced in relation to stringent government rules it is to be mentioned that the government’s ‘Pension provision for all’ policy has impaired the business of RI group. The provision for pension schemes has led to a cut down in the sales of insurance products as pension schemes are found to be economically profitable for them with high returns in shorter time span (Bratton and Gold 2017). The company also faces issues in adhering to EU and Financial Service Authority regulations. The need of aligning the financial reporting standards globally has also been perceived as a major challenge. From the technical perspectives the policies of the government that can influence the business in a direct or indirect manner are taxation, interest rates, exchange rates and public-private partnerships.

The current study focuses upon an UK based insurance company RestInsured (RI UK) and their business plan for the next five years for maintaining their strategic position in the UK insurance sector. The customer base of the company is huge as they are catering to the insurance need of almost seven million people providing them general as well as   life insurance. RI UK has recently taken over Southern Life, a competitor which manufactures and distributes investment products and long term savings through Independent financial advisors (IIFAs). The challenging markets conditions and the reduction in customer service and business performance over the last three years has brought in an immediate need for the company to review their strategic business plan and priorities.

The company has particularly focused on its vision for achieving long term relationship with its customers. It could be achieve through focus on proactive customer supporting. For the purpose of which the company plans to develop a number of multi-distribution channels. The goal is to provide a broad choice of competitively priced pensions.  The organization also aims to maintain customer trust and confidence through effective risk management strategies. The multi-distribution channel helps in reaching out to more number of target customers in relatively less time, which facilitates effective grievance redressal (Mabey and Zhao 2017).

A number of challenges are faced by the organization in meeting with the objectives and demand of the company. Some of these are tougher trading conditions owing to economic downturns, the change in customer habits and behaviors, government policies which brings about changes in the financial service authority regulations. There had been a drop in the gross percentage profit of RestInsured General insurance and life pensions and Southern Life and pensions compared to last year. In order to deal with the challenges the company has come out with  some  of the effective strategies such as maintaining a strong presence in home, motor and travel etc. additionally, speedy integration into RI UK portfolio which would enable products to have  a global reach.

The five competitive areas which the company would need to develop quickly are – development of product, setting up of effective distribution channels, developing effective customer network, services and technological resources. One of the most pivotal aspects in development of the business is through development of the product. RestInsured has been covering general and life insurance as well as pension. However, as argued by Buller and McEvoy (2016), the changing market dynamics places huge amount of pressure upon the existing products. One of the major criteria over here is to adjust the return on investments so that the one investing in the life insurance plan can gain maximum coverage during ill health or other concerns.

The distribution channels are extremely important in ensuring the maximum sells of the products. The RI UK aims to sell the life and pension products though advisers and agents to high end customers. Additionally, use of E-channels for sell of general insurance and life and pensions can also help in reaching to more number of target customers. As mentioned by Sarvaiya  et al. (2016), cross selling of the product through proactive customer support system can help in retaining the priority based customers. As suggested by Tregaskis and Almond (2017), shift in technology such as use of  social media  for providing detailed   knowledge  of the  insurance products can help in  building  a strong customer network. The social media channels could be used for extensive advertising of the life insurance products.

In order to face the challenging market conditions a number of business shift model have been applied over here. It places importance upon the initiation of a business re-engineering change programme. It is based upon realignment of some of the deliverables to meet the changing market conditions and demands.  Some of the important deliverables  which have been considered over  here are – people workstream, product and marketing workstream, customer services and products , IT workstream etc. in order to reengineer the change  programme some of the Human resource (HR) policies needs to be modified. For instance, the HRM policies should focus upon development of future capabilities while retaining the old employees, involvement and optimum engagement of staff in development of improved customer experiences. Some of the risk factors which are often faced due to the re-engineering process are untrained or less skilled workforce, lack of communication in respect of investment for IT developments. In order to have a wider outreach to the target customer market RI UK aims to bring about a shift in technology. As mentioned by Vivares-Vergara  et al. (2016), the focus has shifted to the use of social media marketing for educating the customers regarding certain products and services  as well as get valuable feedback from the customers regarding the loopholes in services.  As mentioned by Ostrom  et al. (2015), the product loopholes could be further utlised for bringing about modifications within the business plan and end products.

However, in the lack of technological resources the company fails to gain knowledge regarding the market targets which strategically places them below their customers. One of the major problems faced by the HRM over here is related to recruitments well as retaining of the skilled workforce owing to rising organizational disputes. Due to the shift in technology a huge amount of existing workforce of the company have to be replaced or their job responsibilities shifted.  Hence, it lies on the part of the HRM to effectively train and realign the workforce.  As mentioned by Boxall (2018), effective judgment based on right balance of talents is required to employ the skilled workforce. The changing work pressure along with the changing work roles often become a reason for huge amount of employee turnover. In order to reduce the  outflow of experienced  employees out of the company , the HRM can bring about a number of changes such as  provide required  amount of training to the employees along with revision of the salary structure (Pawlik and Neumann 2015).

One of the other major issues which could have been faced by the HRM over here was change in the company rules and regulations owing to acquisition of new enterprise. The merger and acquisition often results in shifting of the staff base, as a result of which they are often subjected to revised policies and frameworks. This often requires them to work under changed circumstance and job responsibilities. Some of the other issues which are mainly faced by the human resources over here are to effectively deploy and increase the supply of the organizational resources. This particularly attributes to generating a positive return on investments which depends upon a strong profit margin. Hence, maintaining the legal guidelines and implanting them strictly within the organization is very important. As argued by Becker and Smidt (2016), the members of the organization responsible for selling the insurance policies have often been seen to frame the customers in paying extra which goes against the goodwill of the organization as well as affects the net profit worth of the organization. Hence, resorting to a technological interface can keep fraudulent means away.

In this respect, some of the effective steps and measures which could be undertaken for reducing the business risk are effective financial and human resources planning. As mentioned by Butler and Callahan (2014), business re-engineering plays a pivotal role in effective planning of human resources.  Some of these are aimed at instilling more skills in the existent workforce to cope up with the changing market dynamics and customer demands. In this respect, process gaps were seen to exist between Birmingham back office and the Mumbai customer service functions; where the Birmingham back office was seen to put the blame on low levels of knowledge possessed by Mumbai based staffs and the reluctance shown by them in taking responsibility for solving queries of customers. Additionally, the staff had been showing resistance to increasing work pressure on them.  The internal survey from the organization have pointed out that although the staff for RI feels happy and satisfied to work for the company they have an objection on being called the sales person. Additionally, there has been a lack of communication regarding the future role of Southern Life. Hence, an effective HRM measure steps need to be taken. Therefore, based upon increased work pressure and the lack of effective guidance from the management huge amount of staff turnover could be noted for the organization (Wu et al. 2014). In order to reduce the turnover the management should maintain an open communication channel with the staff. The staff should be made an active part of the decision making process where they should be clearly briefed about the sales target and the ream time within which the sales target could be achieved.  As mentioned by Miller and Ngunjiri (2015), often a lack of communication and strict deadline makes it difficult for the sales person to meet their targets. One of the manner in which the pressure could be reduced for the sales executive is by training them on the effective use of technological resources for selling and promoting of the insurance plans.

In order to met the target set by the UK CEO Jermiane Tarrine a business change programme needs to be developed which is based upon the capabilities, budget and resource possessed by the organization.  In order to meet the business growth and objectives the capabilities of the organization needs to be built. The capabilities are centered on the targets fixed by the organization such as retaining top ten positions of the business organization in Europe and USA as well as maximizing growth potential in Asia pacific. The capabilities of the organization could be analyzed based upon the key performance indicators. Some of the key performance indicators are – people, customer, operational performance and finance. The  engagement of the employees  have been  found to be low over here owing to  the communication gaps between the management  and the staffs. Additionally, the employees   were skeptical regarding their job role after the acquisition. Therefore, in order to enhance the capabilities of the staff they need to be more effectively engaged. As mentioned by Kayl  et al. (2017), salary bonus along with training have been seen to motivate the staffs further. Moreover, the interactive voice recognition system should be improved for effectively keeping a track of the priority clients, which helps in effective community building. The employees should be trained on first call resolution, which is mainly based upon adhering to the regulatory policies. As suggested by Marcelino-Sádaba  et al. (2014), the customer lifetime value could be maintained through provision of flexible   rates of return on policies depending on the life stage of the customer.

The company is mainly planning to build its IT or technological resource for reaching out to wider level of customer. However, the staff has been low upon technical skills as well the sharp steep in the profit margins have been major barriers (Cope et al. 2014). Therefore, effective budget planning along with providing the staff with proper training have been found to be beneficial over here. The budget planning has been done mainly with respect to the company goals and the company targets. The goals decided for the company mainly are- development of multi-distribution channels, offering competitive price pension schemes and building string and proactive customer service. These have been placed against the target of growth for the company for a particular year to plan the budget. The budget helps in effective risk monitoring and analysis by keeping a check on the negative growth rates and profit margins (Lai et al. 2016). These are indicative of the functional loopholes which could be otherwise improvised to meet the target.

Attributes	Cost in dollars
Setting up multi-distribution channels	1211
Building proactive  customer service network	1150
Management of capital risk	1251

In this business change program, the contribution of the people work stream is important at various aspects.  There is need of the organization structure supporting BAU and transition. At the same time it should be able to build and maintain a more integrated end game. The other deliverables of the people workstream includes retaining key skills while focusing on the development of future capabilities.  The competencies that are to be focused in future must be well defined for its implementation across the key enabling processes (Stone and Laughlin 2016).

As per Manrai (2016) the contribution from the product and marketing work stream includes improvement in relationships with the UK government. The professionals of this department must influence with the UK government, for policy making for future profits.  Considering the range of customers and their diversity the team of product marketing must develop the cradle to grave product portfolio. It will be targeted to the range of the channels and customers.  The team must contribute to the business change, by distributing the profitable products that is attractive and easy for the consumers to buy. The deliverables expected from the IT work stream for the business change includes adopting smart technologies to better understand the customers. There is need of sophisticated day mining techniques.  Further contribution from this team includes meeting the regulatory demands thorough effective data handling system. It will ensure loyalty from the clients. It may require devising technique ahead of enforced changes. The team members must grab the opportunity to outsource the legacy.   Focusing more on the closed schemes will reduce the ongoing cost of making these arrangements (Valckx 2015).

The customer service professional must ensure retaining of the product development. There is need of the channel management and voice based customer services onshore. The staff must be involved in decision making and engaged in creating excellent experience for the new customers. In this regard it is necessary for the organization to have culture of respecting the people values. It must be signed up to and well demonstrated. There is need of the senior managers to come up with the robust resource plan for ensuring the timely deployment of resources over the period of eighteen months.  The business change program must also consider the issue of downsizing and cost related to it.  The new business change plan must be time bound and should be able to minimize the cost of downsizing.  The issues of the stakeholders must be considered to avoid affecting the change of the future environment (Sadgrove 2016).

According to Ansari and Riasi (2016) the contribution of the customer service professionals in the business change programme may be building strategies to ensure strong long term relationships with the different customer groups of RI. The other deliverables include ensuring value and flexibility to the customers of RI. At the same time the client relationships executives must retain the competitive pricing.  Reducing the operation cost is the other major contribution required in the business while not compromising on the system efficiency. The business process delivered must be ethical while attempting to reduce the cost. The other key contributing factors is improving the business volume as well as matching resource efficiency against it.  There is need of appropriate incentives for the customer service teams.  

It is recommended to meet the compliance and provide evidence of compliance in the areas of authority regulations, anti-bribery and corruptions, data security and privacy, and fraud management.  Compliance management via compliance function acts will provide defense to regulatory requirements impacting the business activities.  It is recommended to take advantage of the social media as a distribution channel followed by other modes of internet for buying insurances.  It will help target specific customer segment. To enable the insurance and pensions across the multiple channels it is recommended to increase the usage of SaaS solutions.  Further, it is recommended to increases the use of technological solutions to automate the underwriting process. It will help increase the direct sales and high return of investment. Online sale of insurance product has significant potential. While developing the online portal it is recommended to make sure it works as integrated part of the whole multi-channel distribution network (Dalla Pozza and Texier 2014).  It is recommended to take the privacy issue more seriously. It is requested to work with third party to get information or feedback without revealing the customer’s personal information. It will prevent crossing the privacy laws.  It will help in delivering the proactive customer service. It is recommended to conduct systematic exploration of the adjacent market. It will help in being more resilient in variety of market conditions.  With the advancement of the technologies it is reclaimed to recognize and focus more on the personalized experience.  Ensuring the posting of customer reviews on websites for all product lines will promote transparency. It will help get feedback on areas of improvement. Taking a proactive approach to legislative changes will help better customer service.  Further, to help the corporate clients, schemes are recommended for providing the best value for employer, while ensuring access to the exclusive deals. It is recommended to focus more on the risk and capital analytics and metrics to meet the regulators demands. It will support effective decision making and more complex reporting (Baesens et al. 2016).

Conclusion

RestInsured has high customer base and achieving long term relationship with its customers is not a big deal. However, it must overcome its tougher trading conditions and deal with the customer buying demands and habits. With the help of the social media distribution channels it is easy to track the customer behaviors. To tackle with the government policy challenges, it must devise innovative method to take customer feedback. It will help adhere to the privacy laws.   The method of ensuring transparency and compliance will help get customer feedback without sharing personal information. It will help deliver competitively priced pensions. It can also be done through maintain a strong presence in home, motor and travel etc. To overcome the tougher trading competition and challenges due to regulatory tightening the company must develop effective customer network as well focus on the risk and capital analytics.

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