Changing headcount gives insurance sector a tough time

Can the operations in the IT and ITeS sectors affect the working of the insurance industry? Or can any change in the employee list in IT-based companies increase the burden of the insurance community? The answer to both these questions is an emphatic yes.

That the attrition rate in IT and ITeS companies is high is a known fact. And the fact that these sectors, therefore, need to keep increasing the headcount is conspicuous through the umpteen advertisements for recruitments posted daily in the media.

Says Nirupama V G, associate director of TeamLease Services Pvt Ltd, a player in the human resources outsourcing space, "On an average, the IT and ITeS sectors in India employ 3,000-5,000 people a month." The attrition rate also, she adds, is around 25 per cent in the IT sector and 45 per cent in the ITeS sector.

This consequently means a constant revision of employee list and, in turn, more workload for the company's human resources department and the insurance sector as well.

The IT and ITeS companies are slated to be more receptive to insurance for their employees than the traditional manufacturing companies. Therefore, it goes without saying that insurance companies and brokers get most of their mediclaim and personal accident business from these sectors.

But this constant change in employee numbers in these companies is making the job of the insurance sector tough, as according to industry sources, this has increased their workload in terms of requirements of constant update.

This apart, it is not only the list of employee numbers that needs to be updated but also the list of dependents, as many companies also offer medical insurance benefits to the dependents of their employees.

Says Ramana Reddy, managing director of Helios Insurance Services Private Limited, "IT and ITeS companies contribute in a major way to our business. But because attrition and increase in headcount is a regular feature among these companies, we need to constantly update our data with regard to new entrants and resignations."

"If the company is large with a headcount of around 1,000, there are changes that happen almost thrice a week and carelessness in this regard can create problems for all "� the employees, employers and the insurance community," Reddy adds.

"We, therefore, not only have to keep ourselves posted on the companies' front but also have to keep updating the insurance companies with this data," Reddy points out.

Hyderabad-based IT services major, Satyam, for instance, had 17,665 full-time associates on its rolls as on Dec 31, 2004. This includes both onsite and offshore associates and developmental and non-developmental staff. On a monthly basis, it adds a whopping number of around 650 associates per month.

Says Hari T, senior vice-president (HR), Satyam, "While problems arise on account of attrition, high number of new recruits and continuous revision in nominations, the insurance process in our company has been made robust enough to take care of such issues."

"With the streamlining of internal processes, an associate can log in from anywhere into Satyam's Insurance Application and update his records. Our insurance providers are in complete sync with us with regard to these issues," Hari adds.

He, however, does not deny that there have been a few cases where problems have arisen because of the delay in updating the data.

Murali Krishna, senior divisional manager, United India Insurance Company, explains, "Sometimes companies delay in sending the data on new recruits. And if in the meantime the recruit incurs medical expenses and needs to claim the insurance benefits, his claim gets rejected. This is because his data was not recorded in the stipulated period."