Part IV of IV

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In this new four-part series, we explore how your people can be your secret weapon in the next phase of tech-driven insurance transformation. With insights from Bullfrog Ventures' Hilario Itriago and Ana Rojas Matiz ...


Part IV: The future of HR  operating a virtual skills warehouse

In Parts I, II and III, we outlined the importance of effective talent development & change management for insurers and Insurtechs, the shortcomings of today's programmes, and a more data-driven, disruption-orientated approach for the future. Today, in Part IV, we conclude this series with some considerations as to the future look of the HR department & Continuous Professional Development (CPD), with the help of an analogy from retail logistics. 

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The new approaches to talent development and change management we explored in Part III could be seen as extensions of the development that led to the creation of dedicated HR departments in the first place: the need for greater transparency in order to boost organisations’ flexibility in the face of change (or, in today’s parlance, disruption).  

To take an out-of-insurance example: to meet wildly fluctuating regional and temporal demand for goods, today’s retailers are investing millions in state-of-the-art inventory systems so that they know exactly what they have in stock where, and this is exactly what HR departments must do – only with employee skills rather than pairs of shoes – to meet business demand when and where it arises.

If HR is "talent logistics", then insurers - and financial services more generally - need to take a leaf out of Amazon's book

In the coming years, we are likely to see further employee profiling, with respect both to what in Part III we termed horizontal competencies (like leadership and communication skills, which can be recycled) and to vertical competencies, essentially domain and technical knowledge.

And just as retailers who have merged their e-commerce and store operations into a single virtual warehouse can match supply and demand more effectively than those who haven’t, it will be those insurers that have eliminated silos in their HR who meet most effectively the challenges thrown up by today’s highly unstable business environment. 

Hilario, CEO and Founder of Bullfrog, notes that we are moving towards greater centralisation in HR but that organisations are still far from enjoying a holistic ‘single view’ of their disparate staff skills and competencies: 

‘I think, right now, we’re in the early stages and we’re looking at a departmental view of the world,’ he states. ‘But I do think that the more it moves towards a centralised perspective, the better the organisation is going to be – because it’s going to be an all-encompassing programme of talent development and delivery.’ 

As with retail, a holistic view is not just about matching supply to demand in the present but also about managing contingency with a view to the future. Just as the stock of a certain type of shoe should not fall below a given level – even if it is not selling quickly at a given point in time and space – so too should a minimum reserve of essential skills be continually monitored and topped up at a company level.

It will be those insurers that have eliminated silos in their HR who will meet today's business challenges most effectively. 

In Part III, we compared the dynamic of an individual team to an atmosphere with a particular blend of gases; if the prevalence of a given skill within a large organisation is kept constant, then local shortages (for example when an individual moves on from a small team) can be topped up with excess from the wider company environment, much as gases in the atmosphere spread to even out concentration gradients.  

The future HR team will manage the organisation it presides over like a smart greenhouse, keeping constant what needs to be kept constant and redressing the balance where things start to get out of sync.  

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As the business changes, overall demand for certain skills may grow, meaning that what constitutes a ‘healthy’ level may need to be redefined upwards. As we pointed out in the previous section, this represents a clear overlap with HR analytics initiatives, as organisations strive, all the while building up larger and larger corpuses of profile data, to find the ideal growth formula for winning teams. 

Let's eliminate the wastage from hammering the wrong skills into the wrong people...

Aligning incoming business demand to profiled staff supply is not just a balancing exercise, it also shows up real shortages in high-demand skills. This lets HR departments take a more proactive, long-term approach to Continuous Professional Development (CPD) by prioritising those skills in which there is a demonstrable shortage, for those individuals who have a demonstrable leaning in that direction.

This approach eliminates much of the wastage that comes from hammering, thinly spread and at great expense, the wrong skills into the wrong people – and means that ‘escape velocity’ can be reached for development of the right skills by the right people.

As far as the ‘vertical’ competencies – technical and domain knowledge – are concerned, CPD will probably remain similar to today: a mixture of e-learning, textbooks and instructor-led training. Where we will almost certainly see more activity is in the development of the ‘horizontal’ competencies and soft skills, as change becomes the new normal for insurance carriers worldwide.  

The future HR team will manage the organisation it presides over like a smart greenhouse, keeping constant what needs to be kept constant and redressing the balance where things start to get out of sync.

Continuous assessment will act as a diagnostic tool here, allowing management to create tailored development paths in real time based on employee aptitude and company demand – and things like coaching and mentoring look set to be expanded. This said, we should not underestimate the extent to which this will be a self-directed or even social activity. For example, if aspects of people’s profiling or development plans are shared socially, then colleagues can take an active role in evaluating, encouraging and training one another. 

‘If your colleagues know that you’re developing your influencer skills and they’ve seen you working hard at it, using things you’ve been getting through the training, then they can give you a thumbs-up,’ suggests Ana, Partner and Enterprise Development Director at Bullfrog. ‘Wouldn’t it be great if you could get that reinforcement every so often, outside of the strictly academic component of the training programme, from people you know and trust?’ 

At last: time to disrupt the welcome lunch!

Having a social aspect to training and profiling also helps integrate new team members, adding a new level of rigour to the customary welcome lunch. ‘An assessment or profile brings a wealth of information about a person into the new team, so that the new manager and new team members can be well-positioned with respect to that new team member and the capabilities they bring into the team,’ expands Hilario. ‘At present, no-one brings in a hard-evidenced evaluation that says: these are my skills, this is what I bring to the team and this is where I may need some help as we get to know each other.’

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The broad theoretical brush-strokes underlying the new age of talent development and HR presented in this series are in place, though much of the detail remains to be worked out. The speed of progress depends on the rate of adoption; the more individuals and teams subject to profiling, the quicker companies can identify those data points most predictive of success, discard red herrings and fine-tune the overall process. 

It is in driving staff adoption that the social aspect will be particularly important. These initiatives can easily become bloated or over-complex, and there is a risk that employee engagement is lacklustre or even non-existent.

Externally, insurers are trying to redefine their customer relationships in terms of something other than a ‘grudge purchase’, and they would do well to take a leaf out of this book when it comes to their internal programmes. They should look to establish a similar ‘value exchange’ here, so that employees positively want to feed into the system and value whatever gets fed back out. The last thing anyone wants is HR Big Brother!

Progress depends on adoption; the more individuals and teams subject to profiling, the quicker companies can identify data points predictive of success, discard red herrings and fine-tune the overall process. 

In addition to lowering friction and boosting staff engagement in relation to the programme, organisations should avoid over-reliance on the data-driven systems they are introducing. These are not oracles, they are merely safeguards against silos and group-think in staffing decisions. If someone is an intuitively good fit for a position, their advancement should not be vetoed on the basis that they have the wrong star sign. 

Today’s insurance companies are very focused on eking out superior prices and propositions based on tiny external data advantages (relating to either scale or real-time access). In future, we expect to see more companies squeezing out comparable competitive edge from internaldata advantages. 

All 4 posts in this series can be enjoyed in our full report, which you can download at any time free of charge.

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Alexander Cherry, Head of Research & Content at Insurance Nexus (