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Leadership 2.0: Creative Retention
Retention Plan

Carriers get creative to keep employees happy.
  • Kate Smith
  • February 2019
  • print this page

FACELIFT: Swiss Re's offices (above) have been redesigned to increase workspace flexibility.

Photos courtesy of Swiss Re.

 

With the U.S. unemployment rate dropping to a 49-year low of 3.7% in 2018—and insurance industry unemployment dropping to a 10-year low of 1.2%—it's tougher than ever to hang on to top employees.

“There's no question in my mind that retention has to be your No. 1 priority,” Brian Wood, vice president of human resources for Cincinnati Financial, said. “If retention starts to get away from you and we get into a labor market like the one we have now, things can get really hard really fast.”

Retention is key to talent development, and talent development is key to succession planning. To be successful tomorrow, companies must train their future leaders today. Part of the challenge in that is keeping top performers content.

“We've had really, really low unemployment for a long, long period of time,” said Greg Jacobson, co-chief executive officer of executive search firm The Jacobson Group. “There is fierce competition for the most talented people in the industry. Companies, in some situations, are not hanging on to the people that will become their succession planning candidates.”

When it comes to retaining talent in a competitive job market, benefits and incentives go a long way. According to a poll by employment website Glassdoor, nearly 80% of workers would prefer new or additional benefits to a pay increase.

But not all benefits are created equal. A Glassdoor Economic Research study showed three core benefits—health insurance, paid time off and retirement plans—had the highest correlation with employee satisfaction.

“You can't assume that traditional medical, retirement and pay will not continue to be an important aspect of getting things right,” said John Novak, head of human resources—Americas for Swiss Re. “Our goal is to always be at or above market in our core benefits. That's a big selling point for us. We're in the insurance industry. If we can't get it right, who can?”

While nailing the basics is crucial, some companies have gone above and beyond to retain and develop talent. From student loan repayment benefits to stock options to paid sabbaticals, insurers are trying to become more creative in finding ways to keep employees happy.

United Educators, for instance, offers a four-week paid sabbatical to employees at 10 years of service (and every five years thereafter). Frontline Insurance gives employees $200 per month to use at local restaurants. And PURE pays $100 per month toward its employees' student loans, placing it among the 4% of companies that offer a student loan reimbursement benefit, according to the Society for Human Resource Management.

Swiss Re, Aflac and Cincinnati all have turnover rates below the industry average of 10.8%. Best's Review interviewed their human resources leaders to find out which programs and benefits play the biggest role in helping them hang on to top talent.

Matthew Owenby, Aflac

We want people to be here a long time, and it’s very difficult to quit a good relationship.

Matthew Owenby
Aflac

Modern Living

Glassdoor ranked Swiss Re No. 15 on its list of companies with the top benefits and perks for 2017. The site singled out the reinsurer for embracing flexibility in the workplace, which is manifested in Swiss Re's “Own the Way You Work” program. Five years ago, Swiss Re embarked on a redesign of not only its workspaces but also its work style.

“There was an acknowledgment in the marketplace that traditional ways of working—showing up at 8, having your hour lunch, leaving at 5—was going by the wayside,” Novak said. “This wasn't only a generational change. It wasn't simply that younger workers were looking for flexibility; it was the whole workforce.

“We also were seeing that from a technology and a workspace perspective, there were new tools coming online, so from most anyplace in the world you were able to conduct business. The workspace was changing, moving away from standard offices and cubes to a more open and agile environment. Putting all of that together we came up with Own the Way You Work.”

The idea wasn't to simply create flexible schedules where employees could agree with their manager to work two days a week from home, although that is indeed part of the program. The intent was to create a flexible environment.

“That could be as simple as needing quiet space where you can put your head down and get work done,” Novak said. “Or it could mean being able to deal with personal issues away from the office, so thus, work from home. Sometimes it could mean being physically co-located with your team members so you can collaborate in a live environment.

“The vast majority of our offices have moved to a completely agile, open-space environment. When people come in, they can log in or sit wherever they want.”

Nearly 80% of Swiss Re's global offices have been designed for increased flexibility.

Novak said Swiss Re considers Own the Way You Work as a key part of its employer value proposition.

“We get high marks [in pulse surveys] in terms of employees saying they feel Swiss Re gives them the flexibility to work in a way that fits their personal schedule,” Novak said. “And when we look at our employer brand and position ourselves in the marketplace, this is front and center along with our commitment to social responsibility.”

The idea that you can be flexible and don't have to work 10 hours physically in the office every day does take some getting used to, especially for managers, Novak said.

“We spend a lot of effort and time training our managers how to manage teams in an agile environment, how to be flexible, how to collaborate when you're not physically in the office, how to communicate effectively using tech like Skype and instant messaging and other tools,” he said.

Parental leave, flexible benefit plans, a diverse workforce and opportunities to live and work overseas also contribute to Swiss Re's turnover rate of less than 10%.

“Our goal is, of course, to retain the vast majority of the workforce every year,” Novak said. “That said, you do want some attrition because it allows for reasonable succession and people to progress. So truly zero attrition is as bad as too high attrition in some respects.”

Relationship Status

With an average tenure of close to 18 years, Aflac is doing something right to keep its employees satisfied. The company landed a spot on Benefits News' 2017 list of 10 companies with the most innovative benefits.

Matthew Owenby, chief human resources officer, said Aflac's focus on creating individual relationships with employees is central to Aflac's success.

A key component to that is Aflac's personalized development plans for every employee. Aflac's Career Success Center meets individually with employees to create custom career packages that map out skills and experiences to achieve.

“This is the non-'Dilbert' version of HR,” Owenby said, referring to the comic strip about a micromanaged office. “We like for things to be self-directed. We employ a mature professional workforce. They need to have ownership of their career, but we need to be a partner with them to help that. We are here to serve our employees, and that really means serve them. If they want to meet 10 times about their career development plan in a month, we're going to meet 10 times with them.”

For its young workforce—40% of its workforce is made up of millennials—talent development is particularly important.

“While I don't buy the idea that millennials are different as a cohort demographic, I do believe they have a higher level of expectation from their employer than Generation X,” Owenby said. “It's not uncommon for Generation X to allow a company to manage his or her career. It is very unusual for a millennial to allow a company to manage their career without any input.

“They want to have a clear line of sight. 'Tell me how I get from Point A to Point B to Point C. And please tell me what my long-term, defined as three- to five-year, opportunities will be.' So career development is critical to maintaining the millennials.”

For its more tenured employees, Aflac offers help with resume writing and interviewing skills. The goal is to make internal candidates as strong as external ones when competing for open positions.

“We noticed years ago that our internal resources were not happy with the process of internal movement. We dug into the reasons behind that,” Owenby said. “Since we have long-tenured employees, very few have gone through a formal interview and a formal resume writing process. So they were at a big disadvantage to people who were applying from the outside.

“One of the services we offer is we will sit down with you and build you a modern version of your resume, as well as teach you interview styles and approaches, so you're on equal ground with external applicants.”

Since 2015, more than 1,200 of its 5,200 employees have received promotions through Aflac's career development process, Owenby said.

Beyond its talent development initiatives, Aflac also gives awards for tenure and provides on-site childcare facilities and health clinics.

“We are heavily focused on having relationships with our employees and making them feel cared for, for the purposes of caring for our customers and caring for our business,” Owenby said. “We want people to be here a long time, and it's very difficult to quit a good relationship.”

Cumulative Value

Cincinnati starts with the basics, then adds a mountain of perks on top.

“You have to have a good foundation. Your health benefit, your leave of absence benefit and your retirement plan all have to be really good,” Wood said. “The other things we stack on top of that are the things that would differentiate us from other employers in the marketplace.”

Cincinnati's list of perks is long—think free lunches, vacation giveaways and a company picnic at an amusement park—but some of its biggest differentiators are financial incentives.

Not only does the company offer bonuses for obtaining professional designations, but it also offers stock options to all exempt level employees.

“I don't put that in the perk bucket, but I will say it's fundamental to our compensation structure,” Wood said. “We do stock options and restricted stock units for all exempt level staff every year. We also expand that and do what we call 'holiday shares.' Those go to all of our associates, whether they're hourly or salaried. They get a share of stock for every year you work here up until a maximum of 10.”

Stocks are a great way to build employees' long-term wealth while also building loyalty.

“I'd be reluctant to say one or the other of our perks affects retention. The stock piece, though, does,” Wood said. “The ties to the company that stock creates are pretty incredible.

“When you're a shareholder of the company, you're more likely to make decisions based on what is best for the long-term health of the company.”

Cincinnati also partners with The Institutes on training programs. It pays for its associates' study materials, online practice exams and exam-sitting fees for professional designations. Employees who pass the CPCU exam receive a bonus and a company-paid trip to the CPCU annual conference.

“The last few years the conference has been in Hawaii, so we've sent them to Hawaii along with their spouses,” Wood said. “We want to make it as special as we can.”

Cincinnati also rewards employees with free vacations. The company owns four condominiums in Fort Walton Beach, Fla., and its associates occupy those four units for 10 months out of the year. Department heads give away vacation weeks to employees who deserve extra recognition. “It's a pat on the back,” Wood said.

The company also provides stipends for the cafeteria and free tickets to the Cincinnati Zoo, university sporting events and local arts events. Employees and their family members are invited to the annual picnic at King's Point amusement park, which closes to the public for the day. Plus, employees who have tickets to opening day of the Cincinnati Reds don't have to use PTO to attend the game.

The cumulative value of its offerings shows in Cincinnati's turnover rate, which is below 7%.

“We're less concerned about what everyone else is doing and more concerned that we're doing the right things that allow us to attract and retain folks,” Wood said. “And it works really well. We're hanging onto really good people.”

 

Learn More

Swiss Re (A.M. Best # 058595)

Aflac (A.M. Best # 069824)

Cincinnati Financial (A.M. Best # 058704)

For ratings and other financial strength information visit www.ambest.com

 

Kate Smith is a senior associate editor. She can be reached at kate.smith@ambest.com.


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