Winnipeg-based Great-West Lifeco Inc. (GWL) announced on Tuesday that it will eliminate 1,500 positions over the next two years, including jobs involved in the support of financial advisors, as the company relies more heavily on technology and automation of processes.
The cuts, which comprise approximately 13% of the company’s staff of 12,000, are part of an ongoing restructuring initiative launched in November 2016. The affected positions will be “broad-based” across the organization, said Paul Mahon, president and CEO of GWL, in a conference call on Tuesday morning.
“As we think about changing our business processes, and as you think about automation, it impacts your business processes from end to end, so whether it’s back-office, whether it’s mid-office, or whether it would be some of the staff who support our distribution organization,” Mahon said. “We’re trying to look at it from a customer perspective: What are the right customer outcomes? What are the best business processes? Where are the opportunities to leverage technology? So, it will really touch all parts of the organization.”
The changes are being driven by advances in technology and heightened competition, which are changing customer expectations, according to GWL. That’s putting pressure on companies to invest in new technology and innovation.
“Not only are customers demanding greater digital and mobile access to financial services, they are becoming increasingly cost sensitive,” Mahon said. “To continue to invest and remain competitive, we must be vigilant in managing our cost base. This involves everything from process redesign and automation to looking for ways to optimize our real estate footprint. It also involves adapting our workforce to acquire the skills needed to drive our business forward.”
The reduction in the workforce will come through attrition, a reduction of the temporary workforce and voluntary early retirement, along with a “position reduction program” in which affected employees will receive severance, Mahon said.
The number of advisors will not be reduced as part of this initiative, he noted. The company’s commitment to distribution through multiple channels, Mahon added, is “core to our strategy.”
As some support positions get eliminated, the company is investing in technology and processes to improve advisor efficiency, said Stefan Kristjanson, president and chief operating officer of GWL Canada, on the conference call.
“A lot of the investments that we are making are in fact actually to make the distributors more productive, ” he said, “and to find ways to support them and improve their business models within a changing environment.”
For example, GWL is exploring ways of eliminating paper transactions in the individual insurance business, which Kristjanson said are “too heavy and burdensome today.” The company is also examining opportunities to help advisors automate certain compliance-related tasks.
Facilitating opportunities for clients to transact digitally is also a key area of focus for GWL, especially on the group insurance side, in which many plan members already utilize online tools.
On the individual side, the advisor channel continues to be the most important form of distribution for GWL, Kristjanson said. However, clients are demanding the ability to interact using a variety of different channels.
“They absolutely still need and want that advisor relationship,” he noted, “but they want [a] more digitally enabled part of that, as does the advisor.”
The restructuring news follows last month’s announcement by GWL that it was consolidating its distribution activities under a single new umbrella called the Advisory Network.
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Read: GWL, Canada Life and London Life restructure their Canadian operations
Watch for more coverage of GWL’s recent restructuring efforts in the May issue of Investment Executive.
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