It’s an interesting dilemma: Life insurance firms in Asia have strong recruitment needs, but are facing increased staff costs.
The life insurance sector seems to be booming, if the recent results of two prominent Asian players are anything to go by. AIA’s half-year profits rose 24 per cent to US$1.31bn due in part to new business generated in life insurance, especially in Hong Kong, Singapore and China. And Great Eastern (GE) reported a 58 per cent jump in Q2 profits, thanks to strong underwriting.
Given the decent results of these two large firms, what’s the recruitment outlook over the rest of the year?
Hiring boom, but…
Life insurance hiring is active due to increased business flowing into the Asian markets, says Michael Lau, consultant, PeopleSearch Hong Kong. “This will continue to support market growth and along with it a strong staffing need,” he adds.
High demand for staff is in part fuelled by the Hong Kong government allowing employees to choose their pension providers under new regulations that will be implemented in July next year. Lau says: “This has resulted in insurance firms hiring aggressively to reap the benefits of this opportunity.”‘
But this demand will not go unchecked because firms are becoming increasingly cost conscious. Lau says even as the industry heats up, firms try to stay competitive by outsourcing cost centres and relocating business premises. “Due to this a lot of work is being streamlined, which will put a strain on the recruitment boom.”
Rising costs have certainly hit firms hard. At GE, Q2 profits rose but expenses spiked by a hefty 123 per cent to S$33.5m, thanks to higher staff costs and increased headcount, reported the Straits Times yesterday.
So who’s in demand?
Lau says growing compensation costs were caused by stiffer competition among firms in a talent-short market. In particular, he identifies business development roles and project managers as being most in demand.
Managing the cost conundrum
Insurance firms are tackling the challenge in a variety of ways, says Lau.
· They reshuffled staff to align costs more closely with the market.
· Others employ junior staff and train them from the ground up to tackle the talent shortage.
· Some firms with more immediate needs have been forced to pay high salaries. However, this makes the employment process even more protracted as firms need time to source and make market comparisons before coming to a decision.