Insurance sector hit by increasing resignations

Resignations amongst staff in the insurance sector increased in the year to February 2010, despite growing fears over job security, according to a new survey.

The 2010 National Management Salary Survey - a survey of 43,312 individuals in 197 organisations - published by the Chartered Management Institute (CMI) and XpertHR, reveals a labour turnover rate of 13.6%, up from 12.4% in 2009.

Resignations in the insurance sector stand at 6.2%, compared to 4.1% twelve months ago. The survey results also show that employers are failing to persuade staff to stay, with requests for ‘internal transfers’ as an alternative to leaving resting at 3.4% for the sector, against a national average of 3.6%.

Earning power in the sector has dropped dramatically in the past year, with ‘take home pay’ heavily influenced by where people work and what they do, the survey said.

Asked what lies behind this desire to change jobs, more than half the employers questioned (53.8%) admitted that restructuring and job insecurity caused many of their staff to quit.

A significant proportion (38.5%) recognised that their ‘failure to offer career opportunities and training’ contributed to employees leaving.

61.5% also admitted that their employees’ heads had been turned by head-hunters and recruitment consultants.

The survey - in its 37th year - also revealed an average salary increase of 2.7% in the insurance sector. Whilst it is a strong position, compared to the average national pay rise (2.%), the figure contrasts negatively with last year (4.8%), it stated.

In real terms, the findings show an average salary of £19,788 for junior staff across in the insurance sector and £40,129 for their counterparts at team leader level.

Ruth Spellman, chief executive of the CMI, said: “A year ago employers were looking at job transfers as a way of halting growth of the dole queue. However, with the latest figures showing that staff are prepared to run the risk of unemployment by jumping ship, questions must be asked about employee engagement levels in organisations up and down the country.

“It is clearly time for business to grow up. We can no longer afford to reward people with pay rise after pay rise especially as all the evidence suggests that money isn’t the main motivator anymore. Instead, employers must concentrate on building remuneration packages that incorporate earnings with development opportunities, offer flexible approaches to work and recognition of the need to better engage with staff.”