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Our approach

Our 12,700 people deliver on the promises we make to our customers, shareholders and the community at large. That’s why finding the right people is important, and investing in ways to keep them engaged is critical.

To ensure our long term success we believe in having the right people, in the right roles. Our ongoing success relies on us recruiting and retaining the right people now and developing their talent into the future. As a result we are investing in Group-wide leadership programs to ensure we develop future leaders across the organisation.

Our performance

To ensure our long term success, we are focused on having the right people in the right roles. We are also looking to the future and investing in Group-wide leadership programs to ensure we have a strength of talent across the organisation.

engagement bars (2 years) for AU, NZ, THAI & UK

It is important that our 12,705 employees, split between our Australian, New Zealand, Asian and UK business are engaged and productive, to enable us to deliver on our corporate strategy so each year IAG looks at the engagement of our employees.

Our engagement score across the Group for the past year was 80 per cent. This result represents a small decline from last year, despite considerable organisational change, and continues to exceed the benchmark for global financial services companies as set by our survey provider, Towers Watson. We will continue to invest in programs to strengthen employee engagement over the coming twelve months.

In Australia, engagement has fallen from 85% last year to 80% this year, although in our New Zealand business there has been a small increase in engagement, reflecting their continued focus on becoming New Zealand’s best workplace.

2010 was the fourth year that our Asian businesses participated in the annual engagement survey. Whilst seeking honest feedback from staff through the survey was culturally challenging initially, the participation rates have remained high. The results have indicated where opportunities exist to further build employee engagement, and have provided the basis for action plans designed to create an environment where workplace engagement can be optimised.

Turnover and Absenteeism:

Staff turnover in our Australian business has increased slightly from 19.7% to 21%. This has been driven by an increase in employee initiated turnover, as the employment market picks up, while employer initiated turnover has fallen following the completion of our efficiency program in 2008. Conversely in our New Zealand business, there has been an overall reduction from 15.2% in prior year to 14.8% in the current year although there has been a slight increase in employer initiated turnover due to restructures occurring in the business. In particular in our New Zealand business, this rate of turnover is significantly below the market benchmark.

turnover bars (2 years) for AU, NZ, THAI & UK

Turnover in our UK and Thai businesses is being reported for the first time this year. In the UK, turnover was 19.2%, with Thailand recording a turnover figure of 13.1%.

In our UK business, a number of departmental restructures and the closure of our Southampton office drove staff turnover. Looking at the turnover experienced in our Thai business, this is considerably lower than our other businesses and reflects the economic uncertainty since the global financial crisis. Job opportunities across the market have decreased and uncertainty grew due to Thailand's period of civil unrest. Consequently more employees have chosen to remain with their existing employers.

This year we have introduced a new indicator that looks at the level of turnover of staff employed within the last year. One third of new recruits in Australia are leaving within the first year of tenure. Addressing this will be an area of focus for this year.

Absenteeism remained reasonably stable, increasing from 4.5% to 4.7% in Australia, and decreasing from 3.9% to 3.5% in New Zealand, and 2.9% in our Thai business.

absenteeism bars (2 years) for AU, NZ, THAI

Diversity:

Diversity is an area of historical and future strength for IAG. Our approach and philosophy is described in the Diversity case study within the Key Risks and Opportunities section of this website.

Our diversity has remained stable and while we have a higher proportion of women in our workforce – just under 60% across all our businesses - this is not being reflected in our senior management positions. There has been a slight increase in women in senior management in New Zealand, from 24% to 26%, and a slight decrease in Australia, from 27% to 26%. The percentage of women making up the executive management ranks has remained steady at 22% for both Australia and New Zealand. Both our Thai and UK businesses exceed these levels, with 27% and 35% of women in senior management positions respectively, putting women in senior management levels at 26.5% for the whole Group.

This year we have also reported on the number of women on our Board. Yasmin Allen and Anna Hynes have been long standing members of our eight person board, with Yasmin also chairing IAG’s Audit, Risk Management and Compliance committee and acting as a member of the IAG Nomination, Remuneration and Sustainability Committee.

We not only look at gender diversity from the absolute number of males and females employed within our business, but also from the perspective of how they are remunerated. With more males in senior management positions than females in our businesses, there continues to be a perceived skew in our salary ratios towards males.

Male to female salary ratio
Staff membersPay ratio AU 2010Pay ratio NZ 2010
General employees$1.14:1$1.16:1
Managers / Senior Specialist level$1.16:1$1.19:1
Senior Manager level$1.09:1$1.19:1
Heads Of level$1.01:1$1.03:1

Figures for the UK and Thailand have not been included this year as the ratios are not calculated at this level. We are looking to include UK and Thai data in future periods.

Breaking the figure down by hierarchy illustrates that at more senior levels, pay ratios are equal across the genders i.e. males and females in similar / the same jobs, earn the same/ equal pay. However, at lower levels of employment within the organisation, males are earning more than females for the same role. Clearly, understanding the source of the differences in these pay scales warrants significantly more attention.

Increasing the diversity of IAG’s workforce, using the widest possible definition, is a priority for IAG. The IAG Diversity Working Group, chaired by the Group CEO, is tasked with implementing programs to further boost IAG’s diversity. Programs already in place, such as 12 weeks paid parental leave and flexible work practices, are designed to encourage diversity by enabling those with different needs and responsibilities outside the workplace to work in a way which suits them. These practices have resulted in an increase in the full time/part time ratio in Australia, from 18% to 19%.

An important mechanism for attracting and retaining the right people is ensuring performance is appropriately rewarded. Like many aspects of IAG’s sustainability approach, talent management and performance is handled by each operating business in a manner which suits their business needs. However, each division shares a focus on:

  • clearly defining expected behaviours and key performance indicators across a balanced scorecard focussed on financial and customer metrics, processes and people;
  • ensuring performance indicators are clearly measurable and linked to business objectives; and
  • directly and appropriately rewarding performance and behaviour.

IAG takes the health and safety of its employees very seriously therefore we have been disappointed to see deterioration in our Lost Time Injury Frequency Rate figure in Australia compared to prior years. Investigation of this highlights that some of the rise has been due to improved capture of lost time injury data. With LITFR of 3.0, we are well above the industry best practice benchmark of 2.1, so there is further work to be done. The Health and Safety Leadership Team and Community of Practice are working with the business leaders to improve our safety performance.

Due to recent changes in NSW legislation, an opportunity arose in 2010 for IAG to apply for entry into the Retro Paid Loss Premium arrangement with WorkCover NSW. Under this new arrangement, IAG’s premium for workers compensation claims is closely linked to our claims performance and our safety performance.

In order to take advantage of this opportunity, we had to demonstrate clear minimum standards in the way we respond to Health and Safety matters, how we educate our staff and foster a positive culture towards safety. IAG was able to meet the requirements for entry into the Retro-paid loss premium arrangement which we attribute to the changes made to our OHS Management Framework and Program over the last twelve months.

Case studies

In the case studies below we share some of the initiatives that have driven our workforce performance, as well as some of the challenges that we have faced during the year.

Developing leaders
Flexibility in action
The employee value proposition
Buildings for an engaged workforce
Retaining the benefit of experience in Asia
Taking the pledge

Developing leaders

It’s not just about having the right leaders today, but also having leaders into the future.

To ensure these leaders keep rising to the top, IAG has developed the Advanced Leadership Program.

The program takes talented leaders, and puts them through an intensive series of workshops spread over a fifteen to eighteen month period, to prepare them for future executive roles.

Participants are drawn from all divisions across the Group. They are either directly nominated for the program by their divisional CEO, or they come to management’s attention through IAG’s Senior Talent Programme, which sees members of IAG’s executive team update the Board and executive on the development progress of key leaders in their division.


Flexibility in action

An important part of IAG’s approach to retaining talent is offering flexible work arrangements.

This helps us retain good people, even when their personal circumstances or lifestyle aspirations change.

One of these people is David Malss, Business Intelligence Manager in Enterprise Information Technology.

David wanted to move his young family to a smaller community, but was concerned he couldn’t realise his dream of living on the South Coast of NSW while keeping his city job.


The employee value proposition

Having the right people in the right job is critical to sustaining business success.  As the competition for talent intensifies, the need to attract, recruit and retain the right people is even more acute.

One of the strategies CGU, IAG’s intermediated insurance business, has undertaken to address this challenge is to define and embed its Employee Value Proposition (EVP) and Employment Brand. 

Simply put, an EVP is a shared understanding what people most value about working for CGU and what differentiates the business from other employers.  CGU then utilises that information to communicate to prospective and current employees about what they can expect when employed by the company - and can feel confident that CGU can deliver against that employment promise.


Buildings for an engaged workforce

Auckland’s five star green rated NZI Centre has won nine architectural awards since it was opened in June 2008, and much of the interest in the building has centred on its environmental sustainability features.

But the NZI Centre is also helping IAG New Zealand with another key element of sustainability – workforce productivity and engagement.

When IAG New Zealand commissioned the NZI Centre, the environment was only one consideration. The company also wanted a building which encouraged a positive culture and sense of wellbeing.


Retaining the benefit of experience in Asia

When IAG invests in a business, it does so for the long term. We choose the partners that we work with carefully and then work together with our partners to add value to the company.

In the context of our Asian businesses, where relationships assume particular importance in business, selecting the right employees to work with our international business partners is crucial. It is a very challenging process to not only find the right person but then ensure that the international move that they make works from both a work and personal perspective. We understand that the success of this value creation and capability transfer depends not only on contributing insurance best practices including product, pricing and risk management, but on doing this via high calibre employees who can build relationships, be effective in a multi-cultural setting and who are motivated to make a difference and contribute their expertise.


Taking the pledge

An organisation’s culture is influenced by the behaviour of its people. So ensuring behaviour is aligned with values is crucial to building a high performance culture.

And it’s easier to encourage the right behaviour if you first define it.

This is the thinking behind the Direct Insurance (DI) Pledge, a set of behaviours which all Direct Insurance employees are asked to adhere to.