Employees' Turnover in the Insurance Industry: A Comparative Study of Private and Government Insurance Companies
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Date
2008-07
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A.A.U
Abstract
In Ethiopia, following the market economy declaration by the existing government,
many insurance companies have been opened. Thus, the demand for professionals in
the induslly has been increased. As a result the number of insurance professionals
who are leaving insurance companies is increasing. Each time a position is vacated,
either voluntarily or involuntarily, a new employee must be hired and trained. This
replacement cycle is known as turnover (Robert 2002:395).
This study has attempted to analyze the question, "is voluntary turnover higher in the
private companies or in the government?" The analysis was done by taking job
satisfaction parameters such as compensation system, promotion policy, supervisors'
behaviour and working environment. It also assessed the dominant causes of
voluntary turnover in the private and government insurance companies.
To answer this question and to make the assessment, three private insurance
companies, namely Nile, Nyala and United Insurance Share Companies and
Ethiopian Insurance Corporation are selected. Stratified and convenient sampling
techniques are used to select subjects from the existing and ex-employees of the
identified insurance companies respectively. Then a total of 160 and 60
questionnaires are distributed to the existing and ex-employees of those insurance
companies respectively.
The findings from the collected data depict that employees' turnover in the private
insurance companies are higher than the government counterpart. The reasons for
these are that the private insurance ex-employees were highly dissatisfied with the
working environment, supervisors' behaviour and promotion policy of their respective
companies. Moreover, because of the dissatisfaction with promotion policy and
compensation system, more than two-third of the privates and half of the government
current employees have an intension to quit their jobs.
To conclude, since employee turnover is a problem for insurance companies and the
rate is still increasing at an increasing rate, all of the previously identified insurance
companies should reconsider their compensation system, promotion policy, working
environment in order to build satisfied employees who work at greater productivity
rates and enhance the level of profits.
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Keywords
Government Insurance Companies, Insurance industry