How HR played a strategic business role in digital transformation of Aegon Life

This transformation was to affect not only the business but people as well. The HR team ensured that there was a new reward mechanism, a new talent acquisition model and also maintained the learning curve in the new environment.

In times of an organisational overhaul, it is not just a change in the systems but even in mindsets, values and beliefs. It requires meticulous planning and a lot of coordination between verticals, work groups and hierarchies to bring in this change. One function that is entrusted with the job of ensuring a smooth transition is the HR.

Recently, Aegon Life Insurance had undergone one such organisational overhaul, which was not only to affect its way of doing business, but it’s people as well. The company went through a complete digital transformation. This meant that there will be organisation-wide transformation from a traditional multi-channel distribution-centric setup into a digitally-empowered customer-focussed organisation.

The insurance business is primarily led by a distributor network and has various incentives and rewards scheme in place for the distributors or agents. Because of these heavily incentivised schemes, there is a tendency to force-sell policies that the customer may not really need. The focus was never on understanding the needs and expectations of the end-customer.

Aegon Life Insurance decided to turnaround the way it approached business. In August, it rolled out a new strategy, it changed its focus from ‘the distributor to the customer’.

This implied that the customer alone will now define success. It entailed strengthening of its digital route, making the online channel an accessible platform for the customers to engage directly with the company.

To enable this change, the first task for HR was to identify, acquire and develop the right digital and leadership capabilities and then drive cultural change with regard to the new way of working.

Saba Adil, chief people officer, Aegon Life Insurance, shares, “As a business strategy to stay ahead, we decided to empower both our customers and employees, digitally.” The digital renovation on the business front also required people transformation for it to run smoothly. “We had to look beyond the traditional insurance background talent and hire from the fin-tech world to upscale our capabilities,” she says.

According to Adil, a successful digital organisation is always backed by four pillars — strong product, digital marketing, data analytics and technology. In order to align the capabilities and culture of the organisation with these pillars, the entire way of working needs to be revolutionised. “We had to bring in more speed, energy, accountability and agility— the way things work in the start-up culture,” Adil opines.

This meant putting the right capabilities in place and also aligning the culture with the digital transformation.

Aegon Life now has a differential compensation structure, wherein the rewards vary for core capabilities, support capabilities and control capabilities.

To hire better, Aegon Life identified the core capabilities, in line with the four pillars. They observed that instead of the traditional recruitment consultants, employee referrals worked better for them.

Adil shares, “Consequently we felt the need to create better employee value proposition internally, and that is where the digital transformation strategy itself played a motivational factor. The idea of this entire change excited both our internal and external stakeholders, helping us reach out to the right talent.”

Despite that, it was a bit challenging to get the right capabilities initially. Either the candidates were specialists in e-commerce or from a rich insurance background. It was difficult to find talent with both these qualities. “We then also looked at hiring from niche industries to find the right capabilities and mindset. Since culture fit is vital to us, we also use some assessment tools to ensure the right fit,” says Adil.

To bring in a truly digital mindset and help people imbibe the culture, the company even revised its mission, vision and values statements to make it easier for people to comprehend the change that was required. This way, the company also ensured that each employee associates with the values and is aligned to the new behaviours.

Following the new and agile way of working, Aegon Life now has a differential compensation structure, wherein the rewards vary for core capabilities, support capabilities and control capabilities. Core capabilities are the ones that directly impact the customers and stakeholders. These are paid the most (not that others are underpaid as per the industry standards), as the company follows a ‘pay for performance and delivery’ structure. The differentiation is in terms of performance and impact on the company.

Another crucial aspect of the makeover at Aegon Life is its new learning culture. “We have facilitators from Aegon who teach us data analytics. Apart from having specialists from the data analytics field employed with us, we also believe that digital awareness needs to be improved across the staff, which is why such courses are available to all,” Adil shares. Looking at agile training, the company is going to gradually roll out these courses for the entire staff in the coming times.

Along with digitisation for the customers, the company has completely digitised its internal human resource management systems as well. Adil says, “We now have a fully automated HR platform that keeps track of an employee’s life cycle right from the time a candidate applies till her/his exit.” The recruitment, induction, compensation, performance reviews, etc. are all managed by the automated platform.

To bring in a new culture of recognition, the company is currently working on bringing in technology-enabled instant recognition mechanisms. With shared goal-sheets, list of priorities and constant feedbacks, the people at Aegon Life are already on a smooth track. However, technology is set to make it more real-time and accurate.

Concluding with more benefits of this transformation, Adil shares, “Automation has helped us a lot —not just the business but our people. Managers are now empowered and feel less dependent on HR for keeping track of their team’s performance. This, in turn, allows more time for HR to focus on change management and employee welfare taking away the unnecessary transactional burden from them. In addition, the results of this transformation are also visible in the form of the trust our customer places in us,” says Adil.