Best Insurance Employer: What makes the best insurance employer?

With UK unemployment at a 45-year low of just 3.8%, insurance sector employers must fight hard to attract and retain talent. Understanding what employees want and building a proposition around this is key to winning the battle.

A winning proposition is made up of several different components. While reward and benefits are important, the culture of the organisation is also critical: everything from the style and calibre of senior management through to the company’s attitude to diversity and work/life balance comes under employees’ scrutiny. “There’s much more transparency nowadays,” says Debi O’Donovan, director of Reward & Employee Benefits Association. “Thanks to websites such as Glassdoor, employees can talk about what it’s like to work for an organisation. Employers can’t stop this so they need to be sure they’re fair.”

Striking a balance

Employee views on different areas of their organisation’s proposition were surveyed as part of Insurance Post’s Best Insurance Employers 2020. When asked to rate different aspects of their company on a scale of 1-10, work/life balance comes top (8.39 average) just ahead of senior management and diversity (both on 8.23).

The importance of work/life balance comes as no surprise to David Dewey, managing consultant at Heat Recruitment. “There’s much more demand for work/life balance, especially from the younger generation,” he says. “I’ve seen candidates receive a great offer but turn it down because it didn’t suit their life. Insurance employers are looking to address this.”

As an example, he points to one broker client where, in addition to 25 days holiday and a day off for the employee’s birthday, it offers half a day a month for employees to do their life admin. Similarly, another firm in claims management gives all employees a ‘beach day’ every year, which can be taken when and where they like, providing it fits with business commitments.

These types of initiatives may not be the norm in all insurance sector companies but Dominic Morton, director and insurance lead at Hays, believes the industry is ahead of the game on offering this sort of flexibility. “Insurance can seem a relatively old-school sector but it has offered flexibility for some time, allowing employees to work from home, non-core hours and four-day weeks. It’s one of the sector’s differentiators and, from our perspective, it makes it very easy to sell to candidates.”

Paying fair

Insurance firms may ride high on the flexibility they offer but sitting at the bottom of the table is pay and benefits, scoring an average of 7.91 among respondents (see figure four). Entry level employees were least enamoured with what they received, scoring their employers an average of 7.26. Unsurprisingly, c-suite respondents were happiest, giving an average score of 9.05 for their packages.

Although an individual’s view on pay and benefits is driven by their own expectations, Charles Cotton, pay and reward adviser at the Chartered Institute of Personnel and Development, says that increased scrutiny around how employees are treated is also fuelling these views. “There’s much more transparency on pay now. Disclosures such as pay by gender or the CEO versus employees make fairness a much more prominent driver,” he explains. “Investors are increasingly asking how companies are developing and rewarding their employees too.”

Different attitudes

Whether someone works for an insurer or broker has some bearing on their responses (see figure seven), with employees of insurance companies less content than average on all aspects other than diversity (insurer: 8.26, broker: 8.23). Conversely, broker firm employees rate their employers more highly in every category, apart from diversity (broker: 8.17, insurer: 8.23) and work/life balance (broker: 8.28, insurer: 8.29).

A respondent’s level of seniority also makes a difference (see figure two), with the ratings given by c-suite and senior managers higher on all categories than those of employees and entry-level employees. The only exception to this was training and development, where entry-level employees show a healthy level of optimism about what’s on offer (8.22 versus 7.93 all respondents).

It’s a similar picture when comparing the results according to the respondent’s length of service (see figure three). Anyone with less than a year’s service scores their company highly across all areas, with these scores declining steadily the longer the respondent has worked for their organisation.

Pay makes up a considerable part of an employee’s package but the benefits they receive can also make a significant difference to their view of their employer. Dewey says that insurance employers have had to improve their offerings over the years. “When I started seven years ago, there were plenty of candidates,” he says. “It’s much harder now and this has really driven the packages that insurance sector employers offer.”

Benefit breakdown

To gauge what’s on offer, respondents were asked which of a selection of benefits their company provides [see figure four]. Pension schemes took top spot (97.77%), with free or subsidised tea and coffee in second (89.51%) and personal development in third (88.63%).

Less common benefits included wellbeing budgets (57.95%), new equipment (55.33%) and, in last place, office libraries (21.30%).

Pension’s top spot is hardly surprising, with auto enrolment making it a legal requirement to provide this benefit to all eligible employees. However, just 97.77% of respondents say their company offers a pension, with this figure marginally higher for respondents from insurance companies (98.16%) compared to broker company employees (97.07%).

Overlooking the pension may simply be a misunderstanding or staff still on probation, or as an employee would have had to actively opt out of the scheme, an indication that more communication is required. Katharine Moxham, spokesperson for Group Risk Development, says employers could do more when it comes to promoting their benefits.

“Employers don’t always make full value of their benefits,” she explains. “Employees often overlook what they’re offered, especially with the more longer-term benefits such as pensions and group risk. These benefits are valuable and employers need to shout about what they offer.”

Strangely, research by the CIPD – Reward management: focus on employee benefits, 2018 – found that, in spite of the financial commitment required to provide benefits, 16% of employers said it wasn’t their policy to communicate the benefits they offer to employees.

Additional communications may help get the figure in the survey up to 100% but there is also an argument that it may take more of a financial commitment from employers. O’Donovan says that as pensions are now a hygiene factor in the workplace, employers may need to do more. “The minimum 3% employer contribution should be regarded as the base line, with good employers looking to pay in more,” she adds.

Same sector, different benefits

Drilling down into the results to look at how insurers and brokers benefits compared showed some significant differences (see figure four). Most of the benefits were more likely to be offered to insurance company employees than to broker employees, in some cases markedly so.

For example, a crisis helpline or service is offered to 85.75% of insurer employees, compared to 72.52% of broker employees. Also showing big differences are season ticket loans (insurer: 74.94%, broker: 47.75%); cycle to work schemes (insurers: 81.33%, broker: 68.24%); volunteer day off (insurer: 78.50%, broker: 63.96%); free fruit or lunches (insurer: 72.48%, broker: 53.38%); and wellbeing budgets (insurer: 62.90%, broker: 48.87%). The only instance where the figures are significantly reversed is for new equipment, with 65.32% of broker employees saying it’s offered, compared to 49.88% of insurer employees.

Scale may explain some of this, with larger insurers able to support a broader range of benefits, but it’s a difference noted by Dewey. “Insurers have always been more competitive than brokers when it comes to benefits. They’ve offered good pensions for many years while it’s taken auto enrolment for them to become the norm at broker firms. The difference is beginning to narrow but insurers do remain ahead on the overall package,” he says. 

The size of the package isn’t everything though, with Morton saying that smaller employers use other qualities to compete for talent. “A smaller company, whether a broker or an insurer, can be much more flexible and nimbler. These characteristics can help them attract good quality candidates.”

Wish list

While it’s good to know how benefit packages stack up, knowing what employees want is even more important. As part of the survey, Post asked employees what they valued when choosing a job, allowing them to select up to seven of the factors listed. [see figure five] 

Salary came top, with 98.33% of respondents flagging this as an important factor, with personal development in second place (85.93%) and pensions in third (79.65%).

While these three dominated the wish list, the next tier of three – team lunches and nights out (34.58%), new equipment (33.94%) and wellbeing budget (32.59%) – are also of interest, especially as they’re potentially less expensive to provide.

Moxham says that wellbeing is receiving a lot of attention from employers and employees. “As pensions are now the norm, employees will expect something else, with wellbeing a valuable benefit for both parties. Group risk providers include plenty of wellbeing add-ons such as employee assistance programmes and second medical opinion services: promoting these can release money to use elsewhere.”

The culture of the organisation can
also support the wellbeing agenda. “Wellbeing isn’t just about having a budget for free fruit and health checks,” says O’Donovan. “Employers should look at how they treat staff and train line managers to be aware of the importance of employee wellbeing. Looking after staff is so important: employers need to encourage them to bring their human side to work, especially as it’s the bit that computers can never replace.”

Future challenges

To stay ahead of the pack, insurance sector employers also need to keep an eye on how the market and employees’ expectations of work are changing. 

“New benefits appear every year,” says Cotton, pointing at unlimited leave, fertility treatment and pay setting as recent examples. “There can be a tendency to add anything and everything but employers should question the purpose of all the benefits they offer.”

This will become increasingly important as the age profile of the workforce continues to shift, with five generations now represented in some workplaces. Against this backdrop, flexibility remains a key benefit, allowing employees to balance life responsibilities such as childcare and caring for an elderly relative alongside work.

Dewey says he’s also seeing more flexibility in benefits schemes. “More employers are introducing flex benefits schemes. This allows an employee to tailor their benefits to their needs.”

A further challenge comes from the fact that insurers will find themselves competing against many other companies when they seek to hire. “All companies want digital talent,” says Morton. “It will be hard to compete against the likes of Google for the top tech talent but insurers must be mindful of what these candidates expect from an employer.”

Good place to work

Insurance employers may be grappling with the challenges of attracting and retaining future employees but the survey finds a high level of satisfaction among the current workforce.

When asked how they’d rate their company as the best place to work, the average score was 8.51 out of 10, with brokers slightly ahead of insurers on 8.75 compared to 8.37. What’s more, many respondents have no hesitation recommending their employer to friends, with the average mark 8.53 out of 10.

In keeping with the shift towards moving jobs every few years, contentment with an employer was lowest for new starters. For those with less than a year’s service, 51.98% give their employer full marks. Rack up more than five years’ service, and the likelihood of a 10 out of 10 went up to 77.89%.

Providing employees with an attractive range of benefits plus a culture that allows them to flourish both in and outside of the workplace is essential to winning these recommendations. And, as the insurance sector faces new challenges such as catering for a more diverse workforce and the fight for digital talent, offering a winning proposition is increasingly important.”