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Major Case Analysis

Major Case Analysis

Major Case Analysis

For this assignment, you are required to address an issue or problem faced by your company of choice (High Employee Turnover at Massachusetts Mutual Life Insurance Company) and will analyze it using the techniques taught in this course. The write-up is limited to 12-15 double-spaced pages, not including a title page and exhibits (include as appendices). USE THE 9-STEP CASE ANALYSIS PROCESS AS A GUIDE: Skim the case to get an overview of the situation. Read the case thoroughly to digest the facts. Carefully Review information in exhibits. Decide what the strategic issues are. Begin your analysis with some number crunching. Apply the concepts of strategic analysis. Check out conflicting opinions Support your opinions with reasons and evidence. Develop recommendations and an action plan. Your analysis and recommendations should be supported with high-quality evidence, including textbooks and peer-reviewed academic journal articles covering the appropriate topics that apply to your specific problem.

Major Case Analysis: High Employee Turnover at Massachusetts Mutual Life Insurance Company (MassMutual)

Introduction

Organizations, including MassMutual, face significant challenges due to high employee turnover. High employee turnover renders companies less competitive jeopardizing their long-term sustainability. In the insurance sector, competition is at an unprecedented level meaning that the lack of strategic response to competitive pressure can lead to the closure of businesses. The purpose of this study is to investigate the causes and consequences of high employee turnover at MassMutual and to propose effective solutions to the problem. The goals of this analysis are to lower turnover, improve employee satisfaction and engagement, and strengthen retention strategies. Moreover, the current analysis will provide insights to support the development of viable alternatives by investigating internal factors like MassMutual culture, leadership style, payment, benefits, and career growth chances, as well as external factors like market competition and industry trends. The recommended strategies will be supported by evidence and analysis and will be consistent with MassMutual’s stated goals and strategic direction. Against this backdrop, the current analysis shows that MassMutual can develop a good workspace and reduce turnover by improving employee benefits, strengthening MassMutual’s employer brand, and improving training and development programs along with having strong monitoring and evaluation framework.

The Problem

A major problem for MassMutual is high employee turnover as evident in Appendix 1 in the appendices section. According to Payscale, MassMutual is among the largest insurance companies in the world but has the least employee lifespan of any Fortune 500 company. MassMutual’s average employee lifespan is 8 years (Payscale). Other companies in the same industry, including Amazon have low employee loyalty but MassMutual’s is even lower. A high employee turnover rate occurs when a large number of employees leave or are expelled from a company in a short period (Lyons and Randall 1). A high employee turnover indicates that employee turnover is higher than desired, which can harm productivity and long-term sustainability. Table 1 compares MassMutual’s employee retention with other Fortune 500 companies.

Table 1

MassMutual’s Median Tenure Compared with Other Fortune 500 Companies; Source; Payscale

Company Median Tenure
MassMutual 0.8
Amazon 1.0
American Family Life Assurance Company of Columbus 1.0
Google Inc 1.1

 

From Table 1, MassMutual’s median tenure of 0.8 is lower than that of the other listed companies meaning it has a higher employee turnover. Among the causes of the high employee turnover at MassMutual is inadequate compensation as evident in Appendix 2 showing how the employer is concerned about most of the financial aspects of their employees. Overall, 79% of all employers have indicated that their employees are struggling financially at MassMutual (MassMutual). In Appendix 2, employers are concerned about their employees’ overall financial situation, participation in retirement plans, financial readiness for retirement, and preparation for medical costs. Another cause of high employee turnover at MassMutual is inadequate training and development opportunities that make employees feel less marketable in a fast-changing market (Incfact). The Insurance sector is dynamic and all players, especially employees must stay updated with the latest best practices through training and career development initiatives. Moreover, the high employee turnover at MassMutual is attributed to the company’s unstable employer brand that does not inspire confidence in employees about their long-term financial engagement.

Employee turnover has serious consequences for businesses. For starters, it may result in higher hiring and development costs. Frequent turnover necessitates ongoing hiring efforts, raising the costs of job postings, interviews, and onboarding (Lyons and Randall 3). Furthermore, training new employees requires both resources and time. Moreover, high turnover can be detrimental to morale and productivity. Employee engagement and collaboration suffer as a result of frequent departures, which affect team effort and destroy trust. The loss of experienced employees also results in the loss of institutional knowledge, which impedes organizational growth and creativity. High employee turnover strains finances, impedes productivity, and jeopardizes long-term success.

Objectives

MassMutual’s high employee turnover case analysis has three interrelated objectives that align with the company’s overall strategic direction. The objectives are informed by the following PICOT question: (P) in employees of MassMutual, (I) do the implementation of comprehensive retention strategies, (C) compared to the absence of specific retention initiatives, (O) leads to a significant reduction in high turnover rates, (T) within 6 months? The PICOT questions survey the likelihood of reducing employee turnover at MassMutual by implementing integrated employee retention techniques. The three case analysis’s goals are;

  • To reduce employee turnover at MassMutual by 0.2 every 6 months.
  • To improve employee satisfaction and engagement by 10% to be observed in a corresponding improvement in attendance rate within the first 2 months.
  • To enhance retention strategies by recording over 80% retention within 6 months.

The first objective involves an attempt to reduce employee turnover at MassMutual by 0.2 bi-annually. From Table 1, MassMutual’s median tenure is 0.8 the lowest employee retention score of any of the top Fortune 500 companies (MassMutual). Reducing employee turnover at the company means increasing the retention score from the current 0.8. Therefore, within the first 6 months and following a successful implementation of comprehensive employee retention strategies, the media tenure is expected to be 1.0 and 1.2 in the next 6 months. The second objective is about improving employee satisfaction and engagement by 10%. The change will be weighted using the employee attendance rate where the suggested interventions will be expected to increase the attendance rate by 10% every two months.

The final goal of the case analysis is attaining 80% retention within 6 months of alternative implementation. Employee retention refers to an organization’s ability to keep its workforce within a specific period (Kyndt et al., 198). Employee retention entails putting in place strategies to reduce turnover and keep a stable workforce, as well as fostering job satisfaction, providing opportunities for advancement, and developing a good workspace encouraging workers to be loyal. Reducing employee turnover, improving satisfaction, and enhancing retention all align with MassMutual’s strategic direction. MassMutual’s mission is to offer integrated financial wellness to people and businesses by leveraging innovation, customer-centricity, technology integration, and strong partnerships to meet clients’ changing needs. The stated mission requires the input of a satisfied and focused workforce. Therefore, MassMutual’s employees’ loyalty can be increased through the listed objectives hence their strategic alignment with the company’s general direction.

Analysis

High employee turnover causes challenges at MassMutual with glaring comparisons with Fortune 500 companies. According to MassMutual 8 in 10 employers at MassMutual state that their employees are struggling financially. Among the problems that employees struggle with include retirement planning, medical planning, and dealing with debts. The attrition rate as an expression of retention at MassMutual is 0.8 which is lower than peers in the Fortune 500 companies. For example, Amazon’s median tenure is 1.0, 0.2 higher than MassMutual’s. This means that MassMutual is more likely to lose employees compared to Amazon. Additionally, data attesting to High employee turnover at MassMutual due to inadequate compensation is provided in Appendix 2. For example, 25% of employers are extremely concerned about their employees’ financial readiness for retirement (MassMutual). Additionally, 37% of employers at MassMutual are moderately concerned about their employees’ overall financial situation. Figure 1 shows the overall employer’s concerns about their employees’ various financial aspects.

 

Figure 1

Employers’ Employee Financial Concerns

Several internal factors contribute to MassMutual’s high employee turnover. For example, a poor employer brand at MassMutual contributes to high turnover by failing to attract and retain top talent. Essentially, the employees are hesitant to commit long-term because some of them have a bad view of the company’s culture, work-life balance, and career advancement opportunities. Another factor causing a high turnover at MassMutual is inadequate employee compensation. Some employees believe their pay is below industry standards or is not commensurate with their contributions hence they seek better remuneration elsewhere. Employees who are offered competitive compensation packages are more likely to stay and perform well. Appendix 3 compares MassMutual’s compensation with other Fortune 500 companies.

Limited opportunities for career development and training also contribute to high employee turnover at MassMutual. Employees appreciate companies that invest in their professional development. Mass Mutual workforce is increasingly feeling stagnant hence the need to seek opportunities elsewhere due to inadequate opportunities for advancement and hampered retention efforts. By solving the internal challenges, MassMutual stands a chance of creating a more appealing workplace environment, improving employee satisfaction, and lower turnover rates, ultimately strengthening workforce stability and productivity. The management can then focus on external factors causing high attrition.

Market competition and the job market for insurance professionals are two external factors at MassMutual that contribute to high employee turnover. In the financial services industry, intense competition can lure workers away with superior salaries and offerings given by competitors. Furthermore, if the job market for insurance professionals is favorable, employees may be enticed to pursue opportunities for career advancement and higher pay elsewhere (Incfact). To differentiate themselves from competitors and retain talented professionals in a competitive job market, MassMutual must consider these external factors when developing retention strategies.

Alternatives

The potential alternatives to address the higher employee turnover at MassMutual involve improving employee benefits, enhancing training and development programs, and strengthening the MassMutual employer brand. According to Kyndt et al., improving employee benefits and compensation is effective in reducing turnover, especially in a competitive market (198). Improving employee compensation reduces turnover by increasing job satisfaction and employee loyalty. Employees feel valued and motivated to stay with an organization when they are fairly compensated. Wages and benefits can also be increased to lure and keep top talent, lowering the need for frequent recruitment. This stability fosters a positive work environment, increasing productivity and lowering turnover costs.

Improving training and development programs lowers attrition rates by providing opportunities for growth and skill enhancement to employees. Employees are more likely to stay with an organization if they feel professionally empowered (Kyndt et al., 199). Training programs that are effective enhance job satisfaction, bolster performance, and provide a clear path for advancement. This investment in employee development grows loyalty, inclusion, and a sense of fulfillment, ultimately lowering turnover rates.

By improving the firm’s reputation as an employer, strengthening MassMutual’s employer brand reduces turnover. A strong employer brand improves perceptions of the firm’s principles, culture, and growth opportunities. Strengthening employer brand lures and keeps top talent, lowering the need for frequent hiring. A strong employer brand encourages employee engagement, loyalty, and satisfaction, lowering turnover rates and associated costs (Matt). A strong employer brand can also lead to positive word-of-mouth and referrals, enhancing the company’s ability to attract and retain talented employees.

Evaluation of Alternatives

Research by Matt involving the analysis of employee surveys revealed that 55% of employees quit jobs to take new ones with better pay. Additionally, research conducted by Harvard University and using data from employee surveys showed that increasing compensation by $1 per hour caused a 2.8% retention boost (Matt). On the other hand, a $1 pay loss caused a 28% increase in turnover. Therefore, the cost of reducing salaries is severe and an increase in salaries should be embraced instead. For MassMutual, the cost of improving employee benefits by a small margin will have a better result in retaining employees while the cost of lowering salaries with a similar margin would have a severe outcome.

Increasing MassMutual’s training and development opportunities can result in a favorable cost-benefit analysis. While the initial costs of developing or improving training programs may be high, the long-term benefits far outweigh them. MassMutual can improve employee retention by investing in employee development and lowering turnover costs such as recruitment, hiring, and onboarding (Matt). Experienced employees can boost productivity and efficiency, which can lead to increased customer satisfaction and revenue. A continuous learning culture can also attract top talent, improve the company’s reputation, and contribute to a competitive edge in the industry (Matt). Overall, MassMutual is likely to see a significant ROI from increased training and development opportunities.

MassMutual can attract and retain high-quality talent by investing in building a strong employer brand and lowering recruitment and training costs which are parts of turnover. A strong employer brand also increases employee engagement, job satisfaction, and loyalty, resulting in higher productivity and lower absenteeism (Lyons and Randall 2). A positive employer brand increases positive publicity, luring new workers who share the company’s values. Lower turnover rates not only save money, but also contribute to a more stable workforce, which allows for continuity, knowledge retention, and improved customer satisfaction (Lyons and Randall 3). The long-term benefits of a stronger employer brand far outweigh the initial outlay.

Recommendations

Table 2 shows the link between the case analysis’s goals and the three viable alternatives as established through cost-benefit analyses and employee surveys.

Goal Alternative
To reduce employee turnover at MassMutual by 0.2 every 6 months. Improving employee compensation.
To improve employee satisfaction and engagement by 10% to be observed in a corresponding improvement in attendance rate within the first 2 months. Increasing employee training and development opportunities.
To enhance retention strategies by recording over 80% retention within 6 months. Strengthening MassMutual’s employer brand.

 

MassMutual’s goal of reducing employee turnover by 0.2 percent every six months relates to the alternative of improving employee compensation. MassMutual aims to improve job satisfaction and employee loyalty by providing competitive and fair compensation packages, ultimately lowering turnover rates and meeting the targeted reduction goal. The goal of improving employee satisfaction and engagement, as evidenced by a 10% increase in attendance rate within the first two months, aligns with the option of enhancing worker training and development chances since providing these opportunities makes employees feel supported and valued, which leads to higher satisfaction, engagement, and, ultimately, improved attendance. Finally, the goal of improving retention strategies by achieving over 80% retention within 6 months is related to the option of strengthening MassMutual’s employer brand. A strong employer brand improves the firm’s reputation, making it more appealing to employees and increasing the chances of retaining talent for longer periods.

The specific recommended actions for MassMutual to go with increasing employee compensation are comprehensive salary analysis, performance-based incentives, and competitive benefits packages. MassMutual should assess its existing payment structure to identify gaps and ensure that employees are fairly compensated. Furthermore, the company should conduct market research to appreciate industry dynamics and align compensation. In terms of implementing performance-based incentives, the company should devise a strategy for rewarding the best-performing workers with bonuses, commissions, or profit-sharing plans (Matt). Aligning compensation with individual and team accomplishments can both motivate and retain employees. In addition to a competitive salary, MassMutual should provide appealing benefits and opportunities for professional development. Comprehensive benefit packages can have a significant impact on a worker’s overall compensation while also improving job satisfaction, resulting in lower turnover rates.

On the other hand, MassMutual’s capacity to improve employee training and development chances depends on continuous training, coaching, mentorship, and an assessment of individual needs. MassMutual should regularly assess employee needs to determine skill gaps and areas for development for employees, and then tailor training programs to meet these specific needs, while also providing opportunities for professional growth and advancement. Furthermore, experienced employees should be paired with newer employees to offer guidance, support, and knowledge sharing (Matt). MassMutual must implement coaching programs to help employees develop leadership skills and advance in their careers, thereby bolstering worker inclusion and retention. Finally, the company should foster a learning culture by making online courses, workshops, seminars, and conferences available (Matt). These courses encourage employees to learn new skills, stay current on industry trends, and broaden their knowledge base, resulting in satisfaction and loyalty.

Finally, MassMutual can elevate its employers’ brand by embracing better internal communication, transparency, and sharing employee success journeys. MassMutual should encourage open communication channels to keep employees informed about the company’s values, goals, and plans, and leaders should engage with workers by addressing issues and providing updates regularly. Furthermore, the company must embrace transparent communication because it develops trust and increases employee loyalty. Additionally, the company should highlight the accomplishments and career progression of its employees using internal newsletters, social media platforms, and other channels of communication (Matt). Such communication emphasizes growth opportunities, shows the organization’s desire for worker growth, and lures prospective talent looking for a supportive and rewarding work environment.

Implementation Strategy

Reducing turnover at MassMutual in a manner that aligns with the organization’s overall strategic direction requires that each of the 8 actions guiding the alternatives and objectives gets resources, adequate time, relevant communication, and addressing challenges at each step. In comprehensive salary analysis, a resource required to foster success is a dedicated HR team to do salary analysis. Additionally, the comprehensive salary analysis should take 2-3 months with the information shared including the purpose of the analysis. However, the information must be accurate and transparency must be embraced at all levels. One challenge in the comprehensive salary analysis is resistance.

A rewards committee to conduct a salary analysis is a resource required to foster success in performance-based incentives. Furthermore, with the information shared, including the purpose of incentives, the implementation of performance-based incentives should take 3-4 months. However, the data must be correct. Aligning incentives and rewards is a challenge in performance-based incentives. A dedicated HR team to conduct a benefits analysis is a resource required to foster success in a competitive benefits package. Furthermore, the implementation of the competitive benefits package should take 2-3 months, with the information shared including specific benefits. The information, however, must be accurate, and transparency must be promoted at all levels. Aligning benefits with employee needs is one of the challenges of a competitive benefits package.

A team of developmental experts to spearhead employee development is a resource required to foster success when assessing employees’ development needs. Furthermore, with the information shared, including the purpose of assessments, the implementation of performance-based incentives should take 2-3 months. The information provided must be correct. Employee resistance is a challenge in performance-based incentives. Mentors and coaches are the resources needed to foster success in mentoring and coaching. They train and motivate employees. Furthermore, with the information shared, including program purpose and benefits, the competitive benefits package implementation should take 3-4 months. One of the difficulties of mentoring and coaching is ensuring the effectiveness of mentorship programs.

A learning and development team to spearhead employee learning is a resource required to foster success in continuous learning. Furthermore, with the information shared, including the purpose of learning, the implementation of performance-based incentives should take 2-3 months. One difficulty in implementing continuous learning is balancing learning and work roles. A communication team to determine communication needs is a resource required to foster success under the plan to ensure better internal communication and transparency. Furthermore, implementing better internal communication and transparency should take 1-2 months, with information shared transparently. Employee resistance is one of the challenges of mentoring and coaching. Finally, sharing success stories should be continuous but the challenge of maintaining confidentiality must be overcome.

Monitoring and Evaluation

To monitor and evaluate the success of alternatives for reducing turnover at MassMutual, the organization should look at turnover rate, employee satisfaction, and engagement rates, compensation scores, employer brand perception, and performance (Matt). A decreased turnover indicates increased retention while an increased turnover means that MassMutual’s strategies are ineffective. Employee surveys should contain rating scales and be conducted regularly. Higher satisfaction indicates positive outcomes and the organization can work on bolstering efforts. Additionally, the comprehensive salary analysis’s effectiveness can be evaluated by a compensation analysis that evaluates salary competitiveness (Lyons and Randall 2). Online surveys can be used to measure employer brand perception with higher scores indicating better employer brand perception. Moreover, MassMutual can track the efficacy of its alternatives through employee participation in training, development, and performance. Satisfied employees are likely to perform better.

Conclusion

By improving employee benefits, strengthening MassMutual’s employer brand, and improving training and development programs, as well as having a strong monitoring and evaluation framework, MassMutual can create a good work environment and reduce turnover. The problem at MassMutual is high employee turnover caused by inadequate employee compensation, inadequate training and development chances, and an unstable employer brand at the company. The implications of high employee turnover at MassMutual include exorbitant training and recruitment costs, reduced morale, low productivity, and reduced employee engagement. The case analysis objectives align with MassMutual’s general strategic direction of providing comprehensive financial services to clients through customer focus, technology, creativity, and relationship building. The viable alternatives as determined from cost-benefit analysis and employee surveys are increasing employee compensation, improving training and development opportunities, and strengthening the employer brand.

To attain the stated recommendations and goals, MassMutual should conduct comprehensive salary analysis, performance-based incentives, competitive benefits packages, employee assessment, coaching, mentorship, continuous learning, sharing of employee stories, and better internal communication. To effectively implement the 8 recommendations resources, communication, risks, and timelines must be planned. To track and assess the success of alternatives for reducing turnover at MassMutual, the organization should examine turnover rates, employee satisfaction and engagement rates, compensation scores, employer brand perception, and performance.

Works Cited

“Incfact – Massachusetts Mutual Life Insurance Co. – Springfield, MA.” Incfact, Accessed 23 May 2023, incfact.com/company/massachusettsmutuallifeinsurance-springfield-ma/.

“Payscale.com.” PayScale, n.d., https://www.payscale.com/data-packages/employee-loyalty/least-loyal-employees.

Kyndt, Eva, et al. “Employee retention: Organisational and personal perspectives.” Vocations and Learning vol. 2, 2009, pp. 195-215.

Lyons, Paul, and Randall Bandura. “Employee turnover: Features and perspectives.” Development and Learning in Organizations: An International Journal vol. 34, no. 1, 2020, pp. 1-4.

MassMutual. “New MassMutual Study Finds Widespread Worry Among Employers About Employees’ Financial Woes.” MassMutual, 2019, https://www.massmutual.com/about-us/news-and-press-releases/press-releases/2019/12/new-massmutual-study-finds-widespread-worry-among-employers-about-employees-financial-woes.

Matt Tenney, “Why Compensation is Important for Employee Retention.” Business Leadership Today, n.d, https://businessleadershiptoday.com/why-compensation-is-important-for-employee-retention/.

Appendices

Appendix 1

Massachusetts Mutual Life Insurance Company’s SWOT analysis; Source; Incfact

Strengths

Ø  The organization has a strong brand reputation which gives it a competitive edge (Incfact).

Ø  The company has a diverse range of insurance products that attract customers.

Ø  Moreover, the company has financial stability due to its profitability.

Weaknesses

Ø  High employee turnover at the company indicates employee dissatisfaction and poor engagement strategies.

Ø  The company has inadequate employee training and development programs.

Opportunities

Ø  Improved employee retention by creating better and more training and development programs.

Ø  Increasing employee satisfaction by offering competitive payment packages to lower employee turnover.

Ø  Streamlining of internal processes by leveraging technological advancements.

Threats

Ø  Intense competition from other insurance companies.

Ø  Another threat to the organization is economic uncertainties.

 

Appendix 2

Employers’ Concerns about MassMutual’s Employees’ Financial Wellness; Source; MassMutual

Employer concerns about employees Extremely concerned Somewhat concerned Total concern
Financial Readiness for Retirement 25% 42% 67%
Preparation for medical costs 28% 36% 64%
Participation in a retirement plan 23% 39% 62%
Overall financial situation 23% 37% 61%

 

Appendix 3

MassMutual’s Compensation Compared to Other Fortune 500 Companies

Company Median Pay
MassMutual $60,000
Amazon $93,200
Google Inc. $107,000
Mosaic $69,900

 

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