Nationwide Insurance Administrative Chief: $15 Minimum Hourly Wage ‘Right Thing To Do’
September 10, 2015 by Renée Kiriluk-Hill, associate editor, BestWeek: renee.kiriluk-hill@ambest.com
COLUMBUS, Ohio – Nationwide is the second major insurer this year to cite an improving economy and turnover as factors leading to hiking minimum hourly pay rates.
Nationwide said it will raise its minimum hourly pay rate to $15 by the end of the second quarter of 2016, $1 lower than the minimum set this year by Aetna Inc.
About 900 employees — working in call centers, the field and offices — will take home more pay because of the change, Nationwide said in a statement.
The $15 base exceeds “the current market practice for certain roles,” said Gale King, Nationwide chief administrative officer. However, “We believe increasing our base compensation level for these entry level jobs is the right thing to do and is yet another way we are maintaining our commitment to doing what’s right for our associates.”
The wage hike applies to fewer than 3% of Nationwide’s workforce of 33,000.
The company said it has “hundreds of open jobs across the country for positions in customer service, claims and sales.” King told Best’s News Service Nationwide reviews all jobs annually “to ensure we are market competitive. We have seen an increase in turnover in our call center jobs, and much more competition for talented workers as the economy has improved.”
The U.S. insurance industry added 2,300 jobs in August, according to Bureau of Labor Statistics figures released this month. Insurance industry employment for August was up 3.23% compared with the prior year’s month, to 2,556,900 (Best’s News Service, Sept. 4, 2015).
The federal minimum wage, last increased in 2009, is $7.25 hourly. Most states have set their own higher minimums and some cities have enacted even higher minimums.
Health insurer Aetna said at the start of the year it was raising its minimum hourly wage in the United States for about 5,700 employees to $16 in April. At the time it cited an improving American economy, competition for employees and a desire to reduce turnover. It said many of the employees who would benefit from the increase serve as “the face of” the company, helping its customers daily.
Starting in 2016, Aetna is also offering to cover more of the health care costs for about 7,000 U.S. employees who meet eligibility requirements (Best’s News Service, Jan. 14, 2015).
At Nationwide, King said the company evaluated the skills employees need to serve clients. “We believe this change will allow us to attract and retain the best talent, which ultimately will have a significant and positive impact on our members, business and our associates,” she said. “We are very proud of the total rewards package we provide our associates, and this is a further investment in our people.”
Nationwide’s second-quarter net income jumped nearly 13-fold, from $57 million to $735 million on growth, better weather and solid investment gains, Chief Financial Officer Mark Thresher said last month (Best’s News Service, Aug. 6, 2015).
In the United States, Nationwide Group is the seventh-largest writer of homeowners multiperil insurance and the eighth-largest writer of private passenger automobile insurance, based on direct written premiums, according to BestLink.
Nationwide Mutual Insurance Co. currently has a Best’s Financial Strength Rating of A + (Superior).
