¶ … Business, Legal and Financial Environment SEIIC is in a technical insurance business. While the business has changed from its traditional characteristics since 9/11, those changes were not outlined in the case so we actually know very little about the challenges that the company is facing in the industry today, just that they are struggling. The business environment is getting more competitive. This could mean that there is competitive from foreign providers, or just new domestic companies entering this business. Insurance was always a quantitative business in nature, so it is also possible that with the rise in built-in diagnostics, the role of the inspector for heavy equipment has changed significantly and may even be less of a technical skill than it once was. Certainly, the skill set demanded of the workers is going to be slightly different. Otherwise, the way that government regulates the insurance business has not changed much, unless perhaps there was some court ruling that changed the way that awards are granted -- something like that could change the legal environment.

The reality is that the financial environment is not known, either, but if the company has been struggling for several years then the implication is quite simple with respect to the company's financial condition -- it is quite likely poor at this point. SEIIC is likely no longer able to simply buy the best talent in the market, and may be squeezed on margins over the long run so may never be able to return to former levels of profitability. It is assumed that there are significant financial constraints on the company at this point.

This leads the company to a change in its overall strategy. Knowing the overall strategy is essential to the integration of human resources as a strategic partner in the business. This is one of the major trends in HR -- the case should have highlighted the overall strategy for SEIIC in order to better incorporate strategic HR principles into this discussion. There are a number of different forces working on the business environment that have led to the consideration of human resources as a critical strategic partner in the business, in particular the role that service and technical staff play in the success of organizations today. The more knowledge work an organization does, the more important the human resources function becomes (Lawler, 2005).

Trends and Best Practices in Recruiting and Staffing

One of the trends in recruiting is the use of e-recruiting. Companies have been recruiting online for over a decade, but the reality is that today this is the most common method of searching out new employees (Iannotta & Gatti, 2015). E-recruiting is used both for experienced workers and for new college recruits as well, as a replacement for traditional college recruiting in person (Diepenbrock & Gibson, 2014). However, since everybody is doing this, it is a challenge for a company to stand out, especially when it has a declining reputation and ability to pay for the best people. So recruiting is a challenge and SEIIC will need to be creative in finding ways to stand out -- perhaps by directly targeting workers with ads on their social media feeds, for example, to instill more of a "pull" strategy to their e-recruiting, instead of waiting for the talent to find SEICC.

Another best practice in recruiting is the use of internships. Such internships can be paid or unpaid, but they provide a better opportunity to find the right match for the worker and for the company. One of the drivers of turnover is when there is a mismatch between the two, and the worker leaves for a company that is a better fit. For example, if there has been a significant change with this company, and its current conditions, jobs and environment do not align with its reputation among workers, then the company can actually use internships to show younger workers that things are better than maybe they had thought.

Trends in HR Development

There are several aspects of human resources development that may need to be updated as well. For example, if the company's performance is flagging, it is entirely possible that its people are not trained adequately for the jobs that the market expects them to be doing. This is potentially the case where the workforce is older, having been trained twenty or thirty years ago, and simply not up to speed with modern technology or the expectations of the modern marketplace. Older workers may well need supplemental training on modern technology. In general, older workers do not have as much incentive to learn...

It may be necessary not only to increase the amount of training that the workforce receives, but to create incentives to engage seriously in this training (Friedberg, 2001). Training programs may be well suited as well to an environment where the reps have good, longstanding relationships with the customers, but maybe not the high-level technical skills; customer perception of service may be about competency as much as it is about personality.
Performance management systems may also need to be updated to help supplement an increase in training programs. Such systems would quantify performance of employees, and have systems of rewards that are tied to such quantifiable results. This system is a best practice, as long as what is being measured is measured accurately, and directly relates to effectiveness in the workplace. The modern workforce relies heavily on quantification, because of the neutrality of performance numbers. This also facilitates having merit-based promotions, which are fast replacing notions of seniority that maybe ruled the traditional workplace. Merit-based promotions also create incentive for all workers to learn new skills and to provide the best service at all times.

This dovetails nicely with an updated notion of career management. In the modern workforce, careers are forged on the basis of measurable results. The results are used to determine who has performed well at their current job, but of course for career management the company needs to avoid the Peter principle. This means having measures that can help predict how well somebody will do at a higher job -- so promotions need to be based in part on past performance but also on measures that are effective predictors of future performance. These measures may not be the same thing.

Furthermore, ineffective career management is one of the major contributors to high turnover rates. People leave companies when they feel that there is no clear pathway for them to fulfill their career ambitions. As a result of this, the challenge for the company is to identify the potential leaders early, and provide them with the pathways that they need. One such pathway is mentorship, where a talented younger employee works with a more experienced leader in order to improve leadership skills, gain insight into the corporate culture and make the sort of contacts that help someone to build their career. In addition to mentorship and use of quantitative methods to determine talent, recruiting has to sell these attributes, so that the best people know that this is a company where they can come to build a career. Getting the best people in the door in the first place is still an important part of having an effective career-building program.

Best Practices and Trends in Compensation

Employees do not simply look at pay as their compensation, and today is not just about benefits either. Employees base their career decisions based on the best complete package, which is one of the major shifts in the workforce. Younger workers in particular are oriented less towards pay or security and more towards fulfillment and opportunity (Michalek & Long, 2013), so a company that needs to refresh its talent needs to build its compensation program around the needs of the employees that it is seeking. There is no point to recruiting at colleges if the company is not going to offer the sorts of things that will attract and retain millennials. In addition to career pathways and challenge, millennials are more oriented towards a casual work environment; stiff, formal environments doubtless come with negative connotations.

In addition, companies still need to be able to offer the more traditional compensation to other employees -- people still like pay and benefits, and that includes time off, maternity leave and other things that go beyond the legal limits in the U.S. Buffet-style benefits are often valuable in the multigenerational workforce, because people's values in benefits change as they age and in particular as they move through the family cycle. What all this means is that the company needs to be a lot more flexible.

Recommendations

The recommendations for SEIIC are based on these trends. First, the company needs to treat HR as a strategy function. Begin with the overall strategy, and then build the HR strategy around getting the people into the workforce who can execute the overall strategy. Second, build a workforce that attracts and retains the sorts of workers you need. If…