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Home » Blog » Industries in Peril- a Recruiters perspective on what is wrong with Life Insurance and Statutory Audit
Industries in Peril- a Recruiters perspective on what is wrong with Life Insurance and Statutory Audit
Published: Apr-11-2013

 

 

We hire across Industries and the hunt for a- rare skill, change specialist, Industry leader is what gets our adrenaline going, and makes Talent Acquisition such a rewarding profession ; but there are some Industries where the problem is not the talent available, but the Industry itself and how it treats its people- here is our assessment of two of Industries facing an acute HR Crisis

 

Life Insurance

The problem is ethics or the lack of it – The Mint report illustrated how investors lost more than Rs. 1.5 Trillion – but there is no hue and cry – because the perpetrators are not the usual villain ( read politicians) but the elite middle class and yes like the product they sell – its tough to explain to the public what went wrong.Insurance Retention percentages are atrocious and are grossly inflated if we take into account the numerous customers who do not even know they have been duped. As Recruiters the symptoms are

  • At middle and senior levels- In the beginning ( early 2000) we were able to convince folks from FMCG, Office Automation, Banking and MLM companies to move to Insurance – because of growth offered and salaries- now when you approach anyone , unless they are about to get fired- they will not talk to you.

  • I am told that at junior levels- When you say a sales job in Insurance junior level – they slam the phone down !

  • Everyone talks about the mad push for targets, and I think more than the stress on the numbers is the realization that the only way it can be achieved is by making ethical compromises. A corollary of this means that the people who achieve “targets” and get promoted are often those who bend the system and used the lack of information to their advantage at the expense of the customers.

  • Executive burnout is common and a lot of “good” professionals are leaving even without getting an alternative job- but just because they have had enough!

  • No Process on earth can bear the onslaught of an ethical compromise and constant willful exception to the process means that the exception becomes the rule. I have seen excellent process experts sacrificed at the altar of finding a process cure to a value ailment

  • Real Attrition rates of 30-45% at the Junior level of sales teams mean they are treated as cannon fodder. I ran a Insurance sales process once and I realized looking at the attrition data that if you have a person for 6 / 9 months – there chances of becoming successful increase dramatically – most HR teams are not able to give a cost of firing/ recruiting replacements, not to mention the cost of loss of morale and employer brand and end up firing people before they even start.

  • What can be done

    • Someone needs to bell the cat and tell the promoters that the hunt for valuation and waiting for the Godot of policy change may make them lose the ball further on running a ethical business. Insurance both the product and Industry is a long term investment – lets not show profits at the expense of the customer

    • A Corollary maybe that Insurance companies stick to covering risk- through simple products like term plans and Endowment plans and leave the Investment game to the Mutual Funds/ Equity brokers...etc.

    • Diversify your leadership team- stop hiring just bankers , find more women and maybe get some expatriates in , and I am not just talking about the folks implanted by your JV partners. Birla Sunlife got a CEO from manufacturing to stabilize them- and I think its a brilliant move because no one understands costing and the value of a process better than person who has spent half his life in manufacturing

    • Start investing in the Employer Brand again- I think MNYL killed two birds with the same stone with their new marketing campaign on TV but it remains to be seen if its just a gimmick or they follow it up with some substance.

 

Statutory Audit

Here are some statistics based on our interactions, you talk to 100 chartered accountants working in the Statutory Audit team of Big 4 Audit firms at Assistant Manager to Associate Director level – this is what they will say

  • 80 will not want to work in Audit for the Big4 - “Do you have a Corporate/ Industry Role” ? Is the most common response

  • Almost 50% of the above 80 will agree to go to a corporate role at same salary- as long as they are out of their current role

  • Out of the 20 who may want to consider a statutory audit role with another big 4- I can bet almost all of them will go for a non statutory Audit role like M&A -even if its not with a big 4, or for a good Corporate role

  • Here is another example- we recently advertised on linkedin for a CFO of an IT firm and about 20 positions in Statutory Audit with one of the leading Audit firms and the results speak for themselves 2 weeks later- CFO- 179 applications- about 50% relevant; statutory Audit firm- 95 applications- about 10% relevant- i.e. folks who had actually worked in Statutory Audit roles

  • What does this mean to the Statutory Audit teams-

    • Quality of people coming into the teams is on a downward spiral

    • Attrition is high

    • Quality of Statutory Audit suffers and hence clients are at risk

  • What can be done

    • Salary of a Statutory Audit Manager with 10 years experience and a Transaction Support Manager with 8 years experience can differ by almost 20- 40% ---- if the salaries are a function of billing rates , I am sure as a a professional body Auditors can convince industry associations to check this malaise – because lack of quality will hurt the industry eventually

    • Travel is often cited as a bane and long working hours- I think someone needs to hack the Auditing role- it is ripe for a shared services + technology driven change initiative. Frequent travel also induces the women in these roles to leave the job more often than the men- thus exacerbating the gender ratio.

    • We have an army of M.Com Graduates and maybe there is a bridge course that can be done and use them for Audit Support so that the pressure on CA's is less

    • The Audit Firms can come together and make a brand pitch for the Audit role to make it “sexy” again ! As an Associate Director we tried to headhunt from a Big4 said- why do I need to take the stress, the travel, the pressure, lack of support because of billing pressure, BD and P&L responsibility when I can make more money sitting in a KPO and the travel I do is combined with a vacation outside India !!

    • Job Enrichment/ Rotation- One of the easiest mandates we have is for a Big4 when they ask us to hire people from Statutory Audit of other firms for their Mergers and Acquisition Support role. You tell a Statutory Audit person that its a role shift and they have a chance to get into Transaction and Restructuring over a period of time, they jump on it . And that is the problem---- A partnership is willing to lose folks to other firms rather than have them move inside on other opportunities. I am sure an internal assessment centre would give the same if not better results as hiring from outside. Maybe the answer is to give the Audit team- an international stint or a stint in another practice as they go into Manager and above levels and combine it with salaries which equal the rest of the practices.

 

These are industry level challenges and the industry needs to team-up to solve them ; and if thats not the case the firm which solves these problems will have a competitive advantage not only in terms of consumer, market share but also Human Resource and Employer branding.

 

On another note - I was recently invited to the panel of MBA entrance of a top MBA School- and I interviewed 15 engineers working for the top 3 IT companies in India and found that almost all of them were worse off in terms of knowledge, general awareness and basic concepts compared to the fresh engineers. So what is the IT industry doing that makes bright engineers resemble “not so intelligent” autobots in 2-3 years of experience --- but this is going to be the subject of another blog post!!

 

Please feel free to give suggestions in the comments box below !

 

 

Omar Farooq

 

Founder and CEO AceProHR

 

 

Comments

  • Apr-13-2013
    Very informative piece ,especially for someone from non-Financial background ..will look forward to the piece on IT Industry ..IT suffers from the onedimensional straight jacketing industry seems to have done winto Programmer , Managerial , Technical ,Functional with no emphasis on innovation and out-of-box thinking in Indian companies ..this eventually turn even the brightest engineers to coding coolies in 3-4 years..aspects like finance and organisational behaviour are not even developed when looking to promote ppl into sr. exec levels .
    Ritesh Shrivastava | Apr-13-2013 05:58 PM

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