MANAGING HR CHALLENGES IN INSURANCE INDUSTRY: A STUDY ON LIFE INSURANCE

Mrs. Kusum Dubey , Mr. Jay Kumar Pandey Email id: dubeykusum@gmail.com & er.jay11@gmail.com

ABSTRACT
The nature of study is descriptive & exploratory type. HR plays a very vital role in Insurance industry like in banking and other Services sectors. Human resource is the most important & invaluable asset for an organization success. This research is based on LIC, a giant & market leader insurance company in India. Before economic reforms, LIC and GIC were only the insurance companies working in life and non-life sector respectively. The low insurance market penetration rate and wide market opportunities attract many private and foreign companies towards Insurance sector. Performance management, recruitment, training and development. The major competitors of LIC are Max new life insurance, ICICI prudential, Birla sun life insurance and many more. HR role is day- by- day becoming more challenging and strategic in growing fierce market competition. The major challenges ahead in front of LIC HR manager to retain the talented employees, to recruit and attract new talented pool, deciding on competitive pay package, to prepare employees to accept changes, to properly manage workforce diversity, designing appropriate methods of employees performance appraisal system, to facilitate healthy work culture for employees better performance. The aim of this paper is to highlight and discuss the main issues; problems related with HR & suggest suitable coping strategies for effective management of workforce in Insurance sector. This paper will analyze the effectiveness as well as ill consequences of ineffective HR on the overall performance of Insurance companies. Keywords: Workforce diversity ,HR challenges, Privatization, retention management, work culture Insurance industry. I.INTRODUCTION Life Insurance Corporation emerged in 1956 as a first public insurance companies in India. In the age of Globalization no industry can survive without efficient workforce. Today, life insurance is almost entirely in the hands of the LIC. Managing people to succeed in today.s highly competitive global environment is important. Managing people to succeed in today.s highly competitive global environment is important. They offer the key ingredients for making Human Resources an active contributor for their organizational success. With the opening of large number of private & foreign insurance players, LIC is facing acute challenge of rising attrition rate & job dissatisfaction among employees. The objectives of the LIC are to Spread life insurance and provide life insurance protection to the masses at reasonable cost. 1. Mobilize peoples. saving through insurancelinked savings s c h e m e s . 2. Invest the funds to serve the best interests of both the policyholders and the nation. 3. Conduct business with maximum economy, always remembering that the money belongs to the policyholders 4. Act as trustees of the policyholders and protect their individual and collective interests. 5. Innovate and adept to meet the changing life insurance needs of the community. 6. Involve all the people working in the corporation to ensure efficient and courteous service to the insured public 7. Promote amongst all agents and employees of the Corporation a sense of pride and job satisfaction through dedicated service to achieve the corporate objective.

II.RESEARCH PROBLEM Public Insurance companies are facing an acute challenge of attracting & retaining talented workforce in global market competition. III.RESEARCH OBJECTIVES 1. To study the scope & importance of HR in Insurance Industries. 2. To explore the main causes of rising attrition rate in Public Insurance companies. 3. To suggest lucrative HR strategies for strengthening workforce & its impact on overall company.s performance. HYPOTHESIS Ho: There is a strong link between HR policies & company.s productivity. H1: There is no such link between HR policies & company.s productivity. H2: There is a positive impact of HR practices on organization productivity. IV.RESEARCH METHODOLOGY 1. Sampling type: Probability sampling method. 2. Sapling unit: LIC Divisional office 3. Sample size: 100 units. 4. Sampling method: Stratified sampling method. HR PRACTICES IN LIC People are our most valuable asset. is what HR manager of LIC SAYS. 1. Organization Behavior: 2. People management: All about the skill in getting diverse workforces to work together towards achieving organizational goals and objectives. 3. Performance management: Future-oriented continuous process to which managers and employees need to devote time, all the time. It encompasses performance appraisal, selfassessment, reward systems and Total Quality Management. 4. Training and development: Provides an insight into the how and whys of training, right from an employee.s induction to his exit in an organization.

V.FUNCTIONS OF HRM PLAYED BY LIFE INSURANCE CORPORATION 1. Manpower planning: It is the prime function of HR manager to determined exact quantity and quality of Workforce required for both present as well for future job. It helps managers in taking decisions like recruitment, selection, employee evaluation etc. 2. Employee motivation: To retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization 3. Employee evaluation: An organization needs constantly to take stock of its workforce and to assess its performance in existing jobs for three reasons: a. To improve organizational performance while improving contribution of an individual employee. b. To identify potential, i.e. to recognize existing talent and to use that to fill vacancies higher in the organization or to transfer individuals into jobs where better use can be made of their abilities or developing skills. c. What has to be done for further improvement of employee.s performance? 4. Industrial relations: Good industrial relations, while a recognizable and legitimate objective for an organization, are difficult to define since a good system of industrial relations involves complex relationships between: 5. Provision of employee services: Attention to the mental and physical well being of employees is normal in many organizations as a means of keeping good staff and attracting others. VI.MAJOR HR CHALLENGES IN LIC 1. Talent crunch. 2. Mounting attrition rate. 3. Difficulty in retention management. 4. Stressful job. 5. Stiff market competition. 6. Managing workforce diversity. 7. Rising training & replacement cost. 8. Determining & designing appropriate training programs for agents and officers. 9. Increasing rate of job dissatisfaction & decidingcompetitive pay structure.

VII.DATA COLLECTION The nature of study is descriptive type. Researcher has collected both primary and secondary data for the data analysis. Primary data 1. Designed Structured questionnaire for data collection. 2. Interview method. 3. Rating method. 4. Co-correlation and percentage method. Secondary data: 1. Published material. 2. LIC Journals and Magazines. 3. www.bimaplus.com. 4. Business magazines. 5. IRDA website. DATA ANALYSIS & INTERPRETATION: Researcher applies different statistical tool for the interpretation and data analysis. Reasons for exit % of respondents 1. Employee 0.8.03% 2. Supervisor or line manager 38.15% 3. Compensation & job profile 53.82% From the above pie chart, it has been depicted that 54% of the employee quit the job for getting higher pay Package, 38% employees quit due to unhealthy interpersonal relationship with their supervisor or boss and 8% employees leave for their own personal reasons. Based on the survey. It is found that Insurance sector is touching 35.2 % attrition in year 2007. Though the salaries are attractive, but the jobs are highly demanding, target oriented and competitive. The above graph shows average salary offered to entry-level employees by different insurance companies. Max new life offered a very competitive and lucrative salary after that HDFC Standard life insurance then ICICI Prudential and LIC. The best compensation policy helps in motivating, attracting and retaining the best employees which improving organizational effectiveness and productivity. Hence due to low package most of the LIC employees looking for the private companies. Insurance sector offers a wide employment and career opportunities to new aspirants as well as paying a very handsome pay package to the experiences one. The experiences employee may get up to Rs. 1000000 lakhs

annually also. Researcher used a rating method ranging form 1-5 scale, 1indicates higher rating and 5 indicates lower rating. Based on the questionnaire data has been colleted from the employees working in LIC. After survey, it is analyzed that most of the employees are today career oriented. Salary is the secondary priority then job satisfaction after that interpersonal relationship with superior or boss and lastly training and development programmes conducted for employee.s better performance. Here in this graph, researcher by using questionnaire and interview method tries to know the employers Perspective towards company HR practices & organization productivity. LIC employers says .HR is the Most important asset for the company and it has a significant impact on company.s overall performance & productivity. Experts says that by offering lucrative pay, excellent work culture, career hike opportunities, Linking pay with performance and by providing appropriate training an Insurance companies can solve the problem of attrition to a greater extent. Hence HR manager should frame those policies & practices, which help in accomplishment of organization objectives while improving individual growth and performance. Based on survey, 78% respondents says that there is a positive link between HR & organizational productivity. But still 18% respondents are disagreeing with this view and 4% respondents can.t say anything. VII.FINDINGS 1. LIC is facing a challenge of rising employee turnover rate and cost. 2. Poaching of talented employees by rival companies. 3. Attractive pay package and fast career growth help in employee retention. 4. LIC is still a market leader even after privatization. 5. The analysis shows that HR practices is positively linked with organization productivity not strongly linked. 6. The major reason for employee quitting is to avoid highly demanding and target oriented job. 7. LIC HR manager need to have more focused and professional approach in order to compete in a market. 8. Apart from good salary and career growth, HR manger should maintain smooth industrial &

interpersonal relationship between employer and employee. 9. The labor turnover rate in LIC is comparatively low than those in private insurance companies. 10. LIC is a most trusted brand declared in year 2007. VIII.SUGGESTIONS 1. Proper communication within the organization. 2. By offering attractive and competitive pay to the potential workforce. 3. By offering excellent career opportunities within the organization. 4. By harmonious Industrial relationship between employer & employee. 5. By enhancing worker.s participation in management. 6. Top management should made efforts for strengthening HR department. 7. To facilitate healthy work culture in order to prevent job satisfaction. 8. Proper implementation of stress coping measures within the organization like counseling, meditation. 9. HR manager should give more attention to retain star performer employee. 10. Right recruitment and selection of employees for consistent growth of the company. IX.CONCLUSION Insurance industry is growing at a faster pace after privatization and globalization. The opening of private players poses a serious threat for the business of LIC. To remain survive as a market leader LIC HR manager need to innovate & restructured its existing policies in order to attract and retain competent workforce.

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