Translating Training and Development Cost into Results
Asia Insurance Review
2006
Paper presented by Tan Kin Lian, Chief Executive Officer, NTUC Income

1. INTRODUCTION

I wish to present this paper to outline the experience of NTUC Income in dealing with the strategic challenge of translating training and human resource development into results.

2. NTUC INCOME

NTUC Income was founded in 1970 by the trade union movement. Our initial share capital was $1 million (US$600,000). Our objective was to provide insurance protection to workers and the public at large. We make insurance affordable to them.

By the end of 2005, we have:

  a.. 1,800,000 customers
  b.. $2,000 million in premium
  c.. $16,000 million in assets
  d.. 1,500 employees
  e.. 2,000 insurance advisers

3. HUMAN RESOURCE BUDGET

Our annual budget for human resource development is $3 million, comprising of $2 million in training expenditure and $1 million for overhead of the staff involved in this activity.

The annual budget is about 3.5% of the annual payroll, excluding absentee payroll. If we include absentee payroll, the budget is about 7% of the annual payroll.

Our average training expenditure per employee is:

      Office employee $1,000
      Insurance adviser $600

Our key training programs are:

  a.. Management development
  b.. Customer service
  c.. Technical competency
  d.. Insurance sales

Each employee spends an average of 70 hours on training, comprising of classroom training, workshops, conferences and e-learning. We are able to provide quality training and keep cost low by leveraging on internal trainers and technology.

4. CHALLENGES

We face three key challenges:

  a.. Identify the right type of training
  b.. Selecting the right people for training
  c.. Ensuring training resulted in improved performance

The right type of training enables the employees to perform better in the current or future job in our organisation. The employee, supervisor and HRD work together in identifying the right type of training.

The training is aligned to support achievement of targets required for the job. The HRD manager conducts a half yearly review with the employee and supervisor to assess usefulness of the training program and achievement of the key performance indicators, such as employee satisfaction, customer satisfaction and sales.

5. TRAINING BOND

We want to train and develop employees who are committed to build a career in our organisation. We do not want them to be trained by us, and then move to work with our competitor for a higher salary.

We require our employees to sign a training bond for our major training program. If an employee leaves us, the employee is required to reimburse us for all or part of the cost of major training that was undertaken during the previous 12 months. In practice, if an employee intends to leave in the near future, the employee is likely to decline the major training. If the employee does have to reimburse us, the employee is likely to ask the new employer to pay for this training cost. It should not have to hit the employee in the pocket.

We are willing to waive the training bond if an employee has to leave for an unexpected reason and is not likely to work for a competitor.

6. SPECIAL PROGRAMMES

We Income has developed the following special programmes:

  a.. Specialist diploma in insurance studies
  b.. Certificate in financial planning
  c.. Certificate in entrepreneurial management
  d.. Handling difficult customers
  e.. Business simulation game (BEST)

7. SPECIALIST DIPLOMA IN INSURANCE STUDIES

We require our newly recruited insurance executives who do not have any previous working experience in insurance to complete a three month full time specialist diploma in insurance. This course is jointly developed by us with a local polytechnic. The course is conducted by lecturers from the polytechnic.

We pay a monthly allowance of $800 during the full time training. This represents about 50% of the salary in a full time job. The trainee is required to sign a 2 year bond covering the cost of the training program and the allowance. If the employee leaves within the first 2 years, they are required to pay for the proportionate amount of the bond, based on the unexpired period.

This programme also helped us recruit quality people. We have already trained more than 150 of them since year 2003. They form a pool of ready trained executives to meet our manpower needs. The performances of these employees have been more than satisfactory, with 20% being graded as top performers.

8. CERTIFICATE IN FINANCIAL PLANNING

We trained 700 insurance advisors to obtain the certificate in financial planning. This course is developed by us jointly with the polytechnic. This programme provides the required skills for our insurance advisers to help their customers to plan for their future.

Insurance advisors with this certificate can also qualify for the Associate Financial Consultant Designation awarded by Insurance and Financial Practitioners Association of Singapore.

9. CERTIFICATE IN ENTREPRENEURIAL MANAGEMENT

This is a five day management course covering the following management skills:

Doing the right things

Developing the right strategies

Implementing the strategies

Learning by stages

Learning by works

Innovation

Managing people

This course uses the 'interactive learning' technique that is developed by NTUC Income. It comprises of

  a.. Presentation
  b.. Electronic voting
  c.. Case study
  d.. Round-table discussion
  e.. Business simulation games

This management course is conducted by our top managers, including the chief executive officer. More than 150 managers have attended this course. We also invite participants from other organisations to join the program.

This course also covers the corporate values. It helps the managers to understand the culture and to get to know the other participants who come from other areas of the organisation.

10. HANDLE DIFFICULT CUSTOMERS

We can delight our customers by acting promptly and being helpful.

All our employees have been trained to adopt the 1-4-14 rule in handling customer issues. The customer is usually delighted with a prompt reply, even though is it partial and tentative.

If the employee is not able to handle the issue, they will escalate to the next level. The customer is usually happy to see the case escalated to the next level - it shows that the employee is being helpful.

97% of our customers surveyed are satisfied with our service provided.

11. NYP/ NTUC INCOME INSURANCE ACADEMY

This Academy is collaboration between NTUC Income and Nanyang Polytechnic. Our aim is to train new and current professionals in the financial services and insurance industry.

Since inception in year 2003, we have trained about 500 office staff and 700 insurance advisors.

The key programmes are already mentioned earlier, they are:

  a.. Certificate in Financial Planning
  b.. Specialist Diploma in Insurance Studies
  c.. Certificate in Entrepreneurial Management

We are able to leverage on NTUC Income's practical know-how and Nanyang Polytechnic's professional manpower and training capabilities. We now aim to reach out to the rest of the insurance industry in Singapore and the region, so that more people may benefit from our training activities.

12. LESSONS

We have given high level attention to the management of our human resource development activities. In the process, we have learned the following lessons:

  a.. Adopt an open approach in identifying useful training
  b.. Apply innovation to get better results
  c.. Work with the right partners

13. CONCLUSION

Human resource development is expensive. It has to be effectively managed. We have adopted an innovative approach towards training. These has worked well for us and delivered the desired results. We are happy to share our success story.