UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ DANG NGO BAO YEN HIGH TURNOVER RATE IN SKILLED AND EXPERIENCED SALE STAFFS AT PVIS COMPANY MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ DANG NGO BAO YEN HIGH TURNOVER RATE IN SKILLED AND EXPERIENCED SALE STAFFS AT PVIS COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr. Phan Thi Minh Thu Ho Chi Minh City – Year 2017 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS I. General overview of PVI South Company……………. The consequences of problem…………………………….12 Initial cause-effect map……………………………….
Central problem identification……………………………16 Final cause-effect map…………………………………. The importance of central problem……………………….39 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com EXECUTIVE SUMMARY This thesis focuses on finding and identifying the problem that PVIS Company is facing and after that suggesting some adequate solutions in order to help company overcome that issue. Through the methods of observation and data collection, researcher has a holistic and objective view in order to make a proper comment of the problem the company is facing in terms of human resources. With four symptoms such as: significant fluctuation in human resource to sale staffs, high proportion of young sale staffs, increasing in qualification mismatch in insurance industry, and high working seniority from 1-5 years, the author pointed out a conclusion that the problem PVIS Company is truly facing now is high turnover rate in skilled and experienced sale staffs.
There are many causes explain the problem that company faces. The first cause is the appearance of many insurance companies which lead to the situation of business dragging people of each other. The second reason is poor management and then low compensation and low promotion opportunities are also the causes lead to high turnover rate in skilled and experienced sale staffs. Moreover, besides some causes the author got from the interviews with sales staffs and managers at the company, there are other causes mentioned in the literature like poor working environment, and poor training and development.
However, after conducting in-depth interview as well as making the research and identifying carefully, the researcher realized that there are only one central problem lead to high turnover rate in skilled and experienced sales staffs at PVIS company, that is low compensation and benefit packages and any other cause be ignored. From that, the researcher only concentrate to find out the solution related to compensation and benefit packages in order to help the company reduce the high turnover rate. There are two solution suggested to solve this problem. The first one is about direct compensation (or monetary solution), increase basic salary and build incentives and bonus scheme.
The second solution is about other supports and benefits include leaves, allowance, company trip, or birthday party organization. However, through the interview and survey of researcher, nearly 100% of employees in the company have the desire of increasing salary and receiving an adequate commission or bonus. Therefore, the solution related to build a base salary increase policy and performance bonus seems to be the best choice for PVIS in keeping the talents staying with company for a long time and reduce the high turnover rate situation. 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
General overview of PVI South Company The process of formation and development PVI South - formerly known as the Southern Insurance Sales Division and the Southern Representative Office of Petro Vietnam Insurance Joint Stock Corporation (now PVI Holdings), now a subsidiary of the PVI Insurance Corporation (100 % owned by PVI Holdings). PVI South was established on December 30, 2009, operates in non-life insurance sector, and with the purpose of developing major insurance services in the oil and gas sector, and expands insurance services to industrial customers in the large-wage market segment in the southern. Less than a year since its inception, PVI South has earned VND 1.2 billion, accounting for 104 % of yearly plan, contributing significantly to PVI’s revenue. November 2010, PVI South received ISO 9001:2008 certification.
PVI South has successfully arranged energy insurance programs with multi-billion dollar insurance coverage for Petro Vietnam Exploration production Corporation (PVEP), Vietsovpetro (VSP), joint-run oil companies JOC; operating insurance for GAS, Phu My Fertilizer, asset system of joint ventures such as Nam Con Son Pipelines Company; insurance for key projects like: Hai Su Trang, Te Giac Trang, Dragon-Turtle, Ca Mau Gas - Power - Fertilizer, PVPower Nhon Trach 1 and 2, marine insurance for fleet of VSP, PTSC, PV Trans… After nearly 08 years of establishment and operation, PVI South has achieved very encouraging results, contributing to the realization of the policy of the PVI Holdings and PVI Insurance to representative unit, a brand of PVI Insurance in the southern insurance market. At present, PVI South is proud to be one of the biggest subsidiaries and bring the highest revenue for PVI Insurance. 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Full name of company: PVI Insurance South Company Abbreviation: PVI South Address: Room No. 8-9, 09th Floor, Vincom Center 47 Ly Tu Trong Street, Ben Nghe Ward, Dist.1, HCMC Tell: 84-8 39111666 Fax: 84-8 39107032 Website: www.vn Tax code: 0105402531-025 Business: Non-life insurance service At the current, there are 62 people working at PVIS Company.
Besides the Board of Directors, the structure of the company is divided into two individual components: Management department includes Human Resource Department, Claim Department, Finance & Account Department and Underwriting managing Department. The other component is Sales Department, it is split off five small departments based on the nature of each type of insurance package and client portfolio. Specifically, there are five sales departments such as: Exploration & Production, Energy & Oil Field Service, Engineering Property, Broker Business, and Planning Department. 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
Organizational structure Director Structure of PVI South Company: Vice Director 2 Vice Director 3 Vice Director 1 Management Department Sales Department HR Finance & Claim Underwriting Exploration & Energy & Oil Engineering Broker Planning Department Account Department managing Production Field Service Property Business Department Department Manager Department Manager Department Department Department Department Manager Manager 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. SYMPTOM In order to assess the current status of human resources at the PVI South (PVIS) Company, the researcher uses a methods of observation and data collection to analyze the activities of the company’s human resources management, and at the same time discussed with human resources manager as well as interview some staffs who are currently working at the company and someone have quit their jobs. Through that researcher has a holistic and objective view in order to make a proper comment of the problem the company is facing in terms of human resources. At the present, there are 62 people working at PVIS.
Except Broad of Director, the company structure is split into two sectors: management department (include: HR department, Finance & Account department, Claim department and Underwriting managing department) and sales department (include: Exploration & Production Department, Energy & Oil Field Service Department, Engineering Property Department, Broker Business Department and Planning Department). The most occupied sector is sales department of 32 people (accounting for 51.6%) divided into 5 main insurance business areas. Due to the characteristic of the company is non-life insurance business unit, sales department plays an important role in the development of the company. Therefore, the company is very attaches great importance to sales department as well as interested in sales staffs.Number and Structure staff in first haft of 2017 No Number Proportion Department (people) (%) 1 Board of Director 4 6.4 2 Administration & HR Department 9 14.5 3 Finance & Account Department 6 9.1 Underwriting managing 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Department 6 Sales Department 32 51.6 Total 62 100 Source: Administration & HR Department However, as observed by the researcher, it is realized that in recent years the number of sales staffs continuously heavy decrease from 2014 to the first six months of 2017.
Not only that, the quality of human resources is also worse than before. In order to clarify the human resources fluctuation in PVIS Company, the researcher discussed and obtained data from the Human Resource (HR) Department as follow: Table 2.Human Resources fluctuations Department 2014 2015 2016 2017 Board of Director 5 5 4 4 Human Resources Department 11 10 9 9 Finance & Accounting Department 8 8 7 6 Claim Department 10 8 7 6 Underwriting managing Department 0 0 5 5 Sales Department 52 47 40 32 Total 86 78 72 62 Source: Administration & HR Department Based on the table of changes in human resources, we can see that the labor situation in the company always fluctuates over years. However, the number of staffs worked in management department like HR or Finance & Account Department are 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com nearly stable and have less change while the high turnover rate is belongs to the staffs who work in Sales Department. In detail, from 2014 until now the number of HR, Finance & Account or Claim staffs left the job is very small, only 2 or 3 people.
In the contrast, Sales Department have a significant fluctuation in human resource. This department plays an important part of the company, but the employees continuously dropped from 52 to 32 people in 2014 and the first six months of 2017. Moreover, Mrs Hanh (HR manager) confirmed that most of staffs left the job are very expert and have much experience in insurance industry. Based on the initial symptom of high turnover rate to sales staffs at PVIS, the researcher continuously conducted interview with HR manager with the purpose of understanding deeply about the human resource problem that company is facing.
Through short discussion with Ms. Hanh (HR manager), it is know that the company has a young structure of workers, specially, the group of age from 22-30 significantly increased from 2014 to 2017 and accounted for 47% of the total workforce in Sales Department in the first six months of 2017, and this is the highest proportion of sales staffs. With the characteristics of young labor structure is an advantage of the company because young labor is dynamic, creative and enthusiastic, and long-term contribution to the development of the company. However, this is also a disadvantage for the company because workers under the age of 30 usually have less work experience.Age structure of PVIS sales staff from 2014 - 2017 Year 2014 2015 2016 6 months 2017 Age Number Proportion Number Proportion Number Proportion Number Proportion (%) (%) (%) (%) (People) (People) (People) (People) 22 - 30 14 27 17 36 18 45 15 47 31 - 45 29 56 22 47 16 40 12 38 46 - 65 9 17 8 17 6 15 5 16 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Total 52 100 47 100 40 100 32 100 Source: Administration & HR Department After reviewing and making statistic of qualification of sales staffs based on data collected from HR Department, the researcher found that the proportion of workforce who has the necessary education, training in insurance industry is more and more narrow.
It was gradually decreased through years from 2014 to 2017. Especially, in the first six months of 2017, this proportion is only 38%. Meanwhile, the number of staffs who are not specialized and have qualification mismatch in insurance industry strongly increased, accounting for 63% in 2017.