Star Health’s CHRO on its IPO Groundwork And Tepid Employee Response To It 3088

Star health and Allied insurance

In a conversation with All Things Talent, Dr. Sriharsha Achar, Joint ED & CHRO, Star Health and Allied Insurance Co. Ltd. talks about how HR contributed to Star Health’s IPO, how work culture remained unaffected during the IPO process, and wealth creation and employee retention tools like ESOPs, PLIs, LTIs at the company.

What were the top roles of the HR department in the company’s IPO?

The HR department’s role included quite a few things in the run-up to the IPO. 

  1. Making sure accurate and timely data and information related to human resources for the DRHP was provided.
  2. Ensuring employee awareness was created on the IPO.
  3. The need to open Demat accounts for subscribing to the IPO was communicated extensively.
  4. Important training sessions for all those involved in the IPO on the changes they should expect post listing were conducted.
  5. Insider trading guidelines training for all designated persons, awareness on the same to all other employees was organised.

What is the biggest challenge that HR has to face in the run-up to the listing and also post that? 

Star Health and Allied Insurance
Dr. Sriharsha Achar, CHRO, Star Health and Allied Insurance Co. Ltd

Making sure the agencies working on the DRHP understood the HR data and information to be provided and interpreted correctly was a challenge.

Making people aware of the stock market – as most people are not clued into the markets. Therefore, the awareness about the stock market, the IPO itself, and of course the need to open a Demat account to participate in the IPO were other related challenges.

For more such interesting views on HR’s Role In IPO, Download the March 2022 edition for FREE

V. Jagannathan, Star Health and Allied Insurance’s Chairman and CEO told Mint in an interview that ESOPs have been given to around 3,000 employees out of the total strength of over 14,000 employees. While it is a good way for wealth creation for employees, it also creates an income disparity. How have you addressed the same at Star?

Star Health is perhaps the only company in the industry that has covered a large population with ESOP grants. In most organisations, the list is usually restricted to a few people in the top rungs of the ladder.

The rules of the grant are very clear and focus on the criticality of the position, the criticality of the person, his/her performance, tenure, and of course the need to retain the person for a longer duration.

The basic tenets of ESOP are retention and wealth creation. If people have met the criteria for ESOP grants, it’s just a matter of time before more people become eligible.

ESOP is just one lever. Apart from ESOPs, we have other levers like Performance Linked Incentives (PLI), Performance Bonus, Long Term Retention Incentives (LTIP/ LTRIP), etc, which take care of the aspirations of other sections of the population that put in a good performance.

“ESOP is just one lever. Apart from ESOPs, we have other levers like Performance Linked Incentives (PLI), Performance Bonus, Long Term Retention Incentives (LTIP/ LTRIP), etc, which take care of the aspirations of other sections of the population that put in a good performance.”

Star Health and Allied Insurance saw a tepid response in its initial public offering. How much does the success and failure of an IPO impact the employees and the organisation’s culture?

As I alluded to earlier, most people are not clued in the stock market. The same holds good for employees as well. Further, investments in the stock market need the investor to pay upfront and purchase the shares. 

It is not that an employee does not want to invest in the company he works for. The purchasing capacity of an employee decides the amount he chooses to invest. That probably resulted in a lower response from employees.

Having said that, our IPO went through and the share price is also holding up well. I hope that we will see a northward trend soon and that will comfort all stakeholders including employees.  

What are the challenges in managing employee expectations during or after the IPO?

With the markets deciding the price of the stock, it is now imperative that we report strong results every quarter. The need to keep performance up, costs down, and morale up is a tough act to manage.

Therefore, constant connect, communication, and engagement with employees – through the leaders –  on these aspects has become the new normal of sorts.

Employees also understand the vagaries of the market and the need for the organisation to turn in a good performance every quarter.

At the end of the day, it is a collaborative effort as no single individual will be able to drive this. 

Also read: Working on Compensation Structures and Streamlining People Processes Post-IPO: Nandini Mehta, Metro Brands

How much does work culture get impacted due to the process?

Except for the listing on the bourses, nothing much has changed for the employees. For those involved in reporting, compliance, and governance a few additional rules and regulations have become applicable.

Work culture as such is not affected. On the contrary, we now educate employees on insider trading, the importance of better compliances and governance, and of course razor-sharp focus on performance and costs.

What kind of tech investments were made or needed when the company transitioned from being a private to a listed public company? Could you give some details on the company’s HR digitisations? 

Public or private, to manage such a large scale of operations, investments in technology are a no-brainer.

It is technology that has made it possible for us to come this far. Our investments have only increased with time and now, post-pandemic, our digitalisation efforts have seen a further jump. Special teams are working on taking our systems and processes to the next level.

“It is the technology that has made it possible for us to come this far. Our investments have only increased with time and now, post-pandemic, our digitalisation efforts have seen a further jump. Special teams are working on taking our systems and processes to the next level.”

In HR, we have implemented an HRIS solution that will help automate the entire Employee Development Life Cycle – from Recruitment to Retirement. We commenced the journey in August 2021 and it will be completed in 16 – 18 months.

Year of Incorporation: Star Health and Allied Insurance Company Limited commenced its operations in 2006 as India’s first standalone health insurance company dealing in retail health, group health, personal accident, and overseas travel insurance.
Business Operation: We have been providing health insurance products to individuals, families, and corporates directly and through various channels including agents, brokers, corporate agent banks, and online channels like our website, interactive applications, web aggregators, etc.
Employee Count: Star Health currently has 14000+ employees with 786 branch offices spread across 25 states and 5 union territories in India. These existing branches are also supplemented by an extensive network of over 562 Sales Managers Stations (“SMS”), which are small individual service centres, located across India.
Market Presence: We are and continue to be the largest private health insurer in India with a market share of 14.13 percent among general insurance players and 56 percent among standalone health insurance players, based on Gross Direct Premium (GIC Provisional & Unaudited data, up to December 2021).

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Dr. Sriharsha has 34+ years of HR experience in several industries such as manufacturing, pharmaceuticals, electronics, IT/ITES, health insurance, and healthcare. He has earlier held senior HR Leadership positions at Apollo Hospitals Group, Apollo Munich Health Insurance, Xchanging Technologies (now DXC), America Online, First Ring India, and AstraZeneca.

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