Fall 2015 PricewaterhouseCoopersExcel Insurance Inc.

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Team

Juan AguilaJunior

Finance & SpanishOff Campus

Louis LiuSophomore

FinanceStanford Hall

Ron Park Freshman

Economics & ACMSKeenan Hall

James KoSophomoreAccountingSorin Hall

Griffin OverFreshman

Finance & SpanishCarroll Hall

Julia Perry Freshman

Undeclared Business Major

Walsh Hall

Christian Brunner-Lopez

FreshmanFinance

Dillon Hall

Natalie MayerSophomore

Undeclared Business Major Journalism Minor

Walsh Hall

Rudolph Bernard Sophomore

Undeclared Business Major & Spanish

Zahm Hall

Matthew Arnason Freshman

Economics & ACMSMorrissey Manor

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Student International Business Council Mission

Founded in 1989, SIBC is the largest student-run organization on campus and seeks to fulfill its vision of Peace through Commerce

by interacting with global companies and organizations, while educating its members and the Notre Dame community on the

different aspects of international business.

Accounting Finance Consulting

Marketing Social Entrepreneurship

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Executive Summary

BackgroundExcel Insurance Inc. is currently known for its traditional work environment and conservative policies surrounding human capital.

SituationExcel Insurance Inc. is facing a large demographic shift in its human resources: 75% of Excel Insurance Inc.’s workforce will be Millennials.

Problem

What progressive strategies can be implemented so that Excel Insurance Inc. can change its traditional corporate culture to one that is more progressive that will retain and motivate its growing percentage of millennial employees?

Recommendation

• Provide workplace flexibility and mentoring• Construct a progressive brand that upholds

corporate social responsibility• Offer merit-based compensation and benefits

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Agenda

Company Overview

Industry Demographics

Millennial Research

Recommended Strategies & Comprehensive Case Study

Implementation & Impact on Company

COMPANY OVERVIEW & INDUSTRY DEMOGRAPHICS

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Company Overview

• US life insurance company • Fortune 500 company• “Star” in the insurance industry• Attracts highly qualified workers• Known for its traditional work

environment and conservative policies

• Imminent significant change in human capital makeup

• HR survey on 2018 projection: millennials will make up 75% of Excel Insurance Inc.’s workforce

• Compelling need to shift from a traditional corporate culture to one that is more progressive

• Current company environment structured for baby boomers, but there will be a majority of millennials in the near future

ConservativeCulture• Utilitarian approach: results over process • Risk averse: discourage new ideas and innovation• Cubicle physical office layout• Infrequent evaluations

RigidStructure• Top-down hierarchical system• Rigid process of projects and assignments• Each employee only focuses on a single field with no cross-train-ing

FormalAtmos-phere

• Separation between work and personal life• Inhibits relationships and engagement between coworkers

Description

Workforce Demographic

Current Workplace Environment

Issue

8Source: Insurance Information Institute, US Bureau of Labor Statistics, the Griffith Insurance Education Foundation, CompData Surveys

Employee Demographics of the Insurance Industry

Percentage of Employees by Age• Industry needs higher level of

education• Requires licenses and

certification• Millennial survey: less than five

percent were interested in the industry; 44 percent said the industry is “boring”

• Low turnover rate: 11.7% (Average: 15.7%)

• Proportion in industry will decline, but a significant number will remain in management

Less Attractive Industry for Millennials

Important Presence of Baby Boomers

Because the insurance industry is unattractive to millennials and there is a low proportion of this demographic, there is an even greater need for Excel Insurance Inc. to adapt to the changing workforce.

16 to 19 years

20 to 24 years

25 to 34 years

35 to 44 years

45 to 54 years

55 to 64 years

65 years and over

0%

5%

10%

15%

20%

25%

30%

Insurance carriers and related activities Financial activities Total, all industries

Perc

enta

ge (

%)

Millennials Baby Boomers

MILLENNIAL RESEARCH

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10

Millennial Research

• 75.3 million individuals born between 1982-2000• Will make up 46% of the workforce by 2020• Technologically savvy, self-confident, well educated,

and skilled at multi-tasking• Creative and team oriented • Strongly considers company social responsibility

when looking for employment • Desire to learn and progress as employee Oil and Gas

DefenseInsurance

Government and Public Service

ChemicalsForestery

Banking and Capital MarketsMetals

Healthcare

0% 2% 4% 6% 8% 10% 12% 14% 16%

As a growing company, Excel Insurance Inc. could retailor its company culture to become more attractive to millennials in order to retain them over time. An effective shift in corporate values and ideals would give Excel Insurance Inc. an advantage over its competitors and allow it to create organic growth as a whole.

• Collaborative culture involving group projects • Flexible workplace in terms of work location and hours • Frequent feedback in order to progress within company• Clear progression path within organization

Ideal Millennial WorkplaceRealities of Millennials

Background Information on Millennials Least Attractive Sectors for Millennials

Peop

le-sav

vy

Tech

-savv

y

Loyal

to em

ployers

Fun-lo

ving

Hard W

orking

0%30%60%90%

HR Professionals MillennialsSource: Pew Research, Deloitte Millennial Survey, PwC NextGen Survey

11Source: Pew Research, Deloitte Millennial Survey, PwC NextGen Survey

Millennial Research

• Millennials are open to diversifying their compensation packages

• 41% of millennials want monthly recognition and rewards

• Strong desire for transparency and ability to view where value is coming from within organization

• Value company values over monetary compensation

30%

29%

26%

15%FlexibilityCorporate Cit-izenCorporate Cul-tureSalary

In order to adapt to millennials’ preferences, Excel Insurance Inc. could focus on changing its company image, creating leadership paths, and establishing a brand that creates a sense of purpose for its employees.

Compensation

Aspects Millennials Look For in Employers

• 75% of millennials believe businesses are focused on their own agenda rather than improving society

• Businesses should focus more on people rather than profit• Value a sense of purpose and validation from their

employer• 50% of millennials see a lack of leadership development

Opportunities for Career ProgressionCompetitive Wages

Training and DevelopmentBenefits Package

FlexibilityInternational Opportunities

Reputation for Ethical Practices Corporate Values

Repuation as EmployerBrand

0% 10% 20% 30% 40% 50% 60%

Attractive Employer Characteristics

Beliefs of Millennials

RECOMMENDED STRATEGIES & COMPREHENSIVE CASE STUDY

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13Source: CNN Money, Harvard Business Review, Washington Post

Strategy 1: Company Policies and Incentives

Reverse Mentoring

• Shifts mentoring role to millennial employees

• Serves as window into the higher levels of the organization

Group Mentoring

• Technology platform that allows employees to define their own mentoring

• New hires get up to speed more quickly

Anonymous

Mentoring• Uses

psychological testing and background reviews to match mentees with mentors

• Both parties remain anonymous

Excel Insurance Inc. could change company policies to include greater workplace flexibility, mentoring programs, frequent feedback, and opportunities for advancement to retain millennials.

• Millennials place substantial value on flexibility in the workplace

• Offer work-hour flexibility by asking new hires about their preferred work

• Encourage employee flexibility in the conversations between employee and new-hires

• Give millennial workers the option to work remotely on occasion for increased productivity

• Millennials want frequent feedback in order to move within an organization

• Offer opportunities for advancement• More promotions and raises• Advancement broken into smaller jumps• Increase transparency through employee surveys • Give more frequent, qualitative assessments

• Millennials want a clear path to success and expect their companies to provide it

• Implement mentoring programs that suit millennials’ mobile, collaborative lifestyle and need for immediacy

Workplace Flexibility

Incentives and Feedback

Mentoring Programs

14Source: ConeCommunications, IpsosSMX

Strategy 2: Branding and Impact

Visit the Official Website

Follow Official Company Page

Flag/Save Web Link for Future Reference

Share Photo or Video on Company

0 10 20 30 40 50 60 70 80Response Rate (%)

• 2013 Cone Communications Social Impact Study• Millennials respond with increased loyalty (91%) and trust

(89%)• Corporate Social Responsibility influences millennials’ personal

decisions i.e. where to work (78%)• Greater likelihood to spend on companies products• CSR promotes millennial retention

• 3 in 4 millennials use social media• Ipsos SMX Community Research Study• 78% of millennials discover brands through social media

sites• 68% visit the company’s official website• Importance of exhibiting a visually purposeful website to

impact millennials

Trust Loyalty Spending Workplace50

60

70

80

90

100

Traits Affected by CSR

Resp

onse

Rat

e (%

)

Social Responsibility Effects

Excel Insurance Inc.'s branding strategy could address millennials’ desires for corporate social responsibility and their technological abilities for millennial employee retention.

Impact of Website on Branding

15Source: Forbes.com, brandingstrategyinsider.com

Strategy 2: Branding

1 2 3Company Image Corporate Responsibility Visual Website

In accordance with millennials’ desires for career progression, social impact, and their tech-savvy abilities, Excel Insurance Inc. could follow these three areas of impact in their branding strategies to allow millennials to assimilate into their company.

Current: Traditional elite life insurer

Millennials Seek: Progressive corporations, open workplace, communication with officers

Improvements:-Show career paths with promotion-Make physical changes in workplace, and make them visible to the public eye -Communicate more progressive values throughout company

Current:Minor involvement through donation

Millennials Seek: 75% find it important that a company gives back to society

Improvements:-Show support for local community in publicity-Have one key social project per year endorsed by Excel Inc.-Create image that associates Excel with social values

Current:Standard layout with underlined hyperlinks

Millennials seek: Interactive website, ease of use, visual navigation, highlight their workplaceImprovements: -Incorporate expressive images, such as links-Include “Request a Quote” on the front page-Simple pop out and drop down menus

16Washington Post Liberty Mutual Group Captrust Advisors

Strategy 3: Compensation and Benefits

Volunteer-Oriented Programs

• Offer outside volunteer-oriented programs through the company• Have an annual company-wide volunteer day• Give option of donating a portion of payroll to charity

Monetary Bonuses• Issue additional bonuses upon review• Reward based on years of loyalty• Offer potential of bonus upon project completion• Provide qualitative feedback

Community Programs• Prioritize social events to build up community within company• Provide physical and mental health programs• Offer support groups for parents at the company

• 76% of millennials prioritize retirement benefits • Match 50% of employee contributions up to 8%• Provide additional retirement plan resources• As an insurance company, offer employees

subsidized health and life insurance

In accordance with the millennial values of incentives and work-life balance, Excel Insurance Inc. could prioritize nontraditional monetary compensation plans and additional programs that appeal to millennials.

• Traditionally, promotion is given based on seniority

• Millennials desire compensation for performance merit

• Give incentive for hard work through rewarding higher quality performance

• Provide frequent, qualitative feedback so workers know how to progress

Pay-for-Performance Compensation

Retirement Benefits

Volunteer-Oriented Programs

17Source: Bentley University Liberty Mutual Group Acuity Consulting

Case StudiesLiberty Mutual Insurance

• Regularly hires and retains 300 new millennial employees each year

• Lengthy onboarding processes and training programs• Formal mentorship (includes executives and peers)• Feedback-centric workplace environment

Promote-from-within

culture• Several senior managers got their start

in entry-level roles

Pay-for-performanc

e compensati

on

• Each employee’s performance and pay is reviewed annually

• Delivers above market pay through a merit increase if an employee performs well

• Significantly above market pay for exceptional performance over time

Volunteer programs

• Give with Liberty • Serve with Liberty

Acuity Insurance• 98% employee rating for atmosphere• 97% employee rating for communication• Perks of free snacks, massage therapy, discount ticket

sales• On-site flu shots and fitness center, subsidized lunches,

and offsite gym memberships

Communal Company

• Lunch with an Officer: 10-15 employees meet with an officer to offer feedback and suggestions

• 5 year club: employees who have worked for 5 years or less are invited to social events

Retirement Benefits

• 401k program features 8% contribution to employee accounts

• Offers 10% contribution in employee’s final years

Wellness programs

• Acuity’s A-Team Club• Option of athletic events and activities• Offers outdoor walking paths and

weekly Weight Watchers Work program

IMPLEMENTATION & IMPACT ON COMPANY

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19Source: Wall Street Journal , Lawrence Weiss Berges Lecture,

Implementation

Communication is Key

Resistance to Change Current Leadership Worries Risk Aversion

Conservative baby boomer management will question whether these new policies are necessary

If promotions are given more regularly, current influential managers will fear for their jobs

Implementing culture change is often difficult and costly: human resources, information technology

Necessity of Change

• Need to attract and retain excellent talent

• Staying competitive• Enhancing consumer

perception

Promotion Solutions

• Promote employees in smaller jumps to recognize excellent performance

• Emphasis on performance rather than seniority

• Tone at the top vs. mood in the middle

• Understand worker sentiment

• Focus on hot spots

Reasons for Resistance

Championing Change

Although there would be initial resistance to the company’s proposed changes, compelling advantages of the reforms could convince Excel Insurance Inc.’s conservative management to adapt to the workforce demographic change.

20University of Illinois Telecommuting Study,

Impact on CompanyImplementing these reforms would increase levels of productivity and happiness of the employees, leading to higher employee retention and motivation within Excel Insurance Inc.

Before Implementation

• Traditional 9 to 5 workday in the office• Advancement upon getting older as opposed to talent-

based promotions• Cookie-cutter performance assessments

After Implementation

• Employees looking to prove themselves, higher productivity

• Commitment to overall excellence• Sense of community in the office due to mentoring• Better knowledge of how to improve and advance

Before Implementation After Implementation

• Traditional, hierarchical workplace• Social impact is not a strict goal• Out-of-date websites and marketing• Promotions given based on seniority

• Regarded as a progressive, concerned company• Employees achieve sense of belonging and pride• Employee satisfaction is a priority• A destination for great talent

Strategy 1: Policies and Incentives

Strategies 2 and 3: Branding Reform and Compensation

QUESTIONS?

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