Aflac CEO won’t lay off workers

Maybe Aflac should tone down the duck’s quack since it seems soft as feathers when it comes to layoffs.

Dan Amos

Dan Amos

Few companies in this day and age can say they haven’t had job cuts during this economic mess. Even fewer can say they’ve never laid off employees.

But since its founding 55 years ago in Columbus, Aflac has managed to avoid chopping heads in the U.S. and Japan, where it sells supplemental health insurance.

“I think job security enhances the productivity of your employees,” CEO Dan Amos told me during a recent interview. “You can’t have your heart and soul in it if you’re worried about your job.”

That attitude is a prime reason Aflac has consistently made lists of top places to work. It also scores high on diversity.

After talking to many CEOs for this column, I can say that Amos is in a small minority on the layoff issue. Companies have been cutting costs — and employees have been the main victims.

What’s more, many CEOs believe it’s important to reward employees with pay increases — even if that means laying off more workers than would be necessary if pay was frozen.

But Amos, who’s been CEO for 21 years, is not in that camp. He chooses to freeze merit increases to avoid layoffs. Aflac has a merit freeze in place right now.

To be fair to companies in many other industries, Aflac does not have to contend with the boom-and-bust cycles faced by construction, auto, airline and other businesses. Aflac’s rate of policy renewals is fairly predictable at 88 percent, Amos said. That allows for effective planning to avoid seesaw hiring and firing.

There’s one other strategic issue on which Amos, 58, may be in the minority — international expansion.

In the early-to-mid 1990s, Amos sold or closed operations in a half-dozen countries where Aflac was floundering to focus on the U.S. and Japan.

Today, about three-fourths of the company’s $18 billion in revenue comes from Japan, where Aflac has a 25 percent penetration rate among households. In the U.S., where the company calculates penetration differently, it’s 6 percent among businesses.

So Amos, at least for the foreseeable future, is planning to keep pushing in those markets, where he sees plenty of room for growth.

By the way, the duck — and how Amos chose to use it — has been key to both revenue and earnings growth over the years.

When the ad campaign started a decade ago, Aflac’s name was known by only about 10 percent of U.S. consumers. Amos had to make a key decision: Use the duck for one sole purpose — brand recognition — or use it to accomplish two goals — brand recognition and developing an understanding of the company’s complex supplemental insurance.

Amos chose to go with a singular focus of getting its name out there. Today it’s known by 94 percent of Americans. When that number hit 90 percent about five years ago, the ads started to layer in more definition of the insurance product.

My takeaway from Amos is focus, focus, focus. Focus on employees. Focus on promising markets. And, of course, focus on your brand.

The motto on Amos’ desk: “The duck stops here.”

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9 comments Add your comment

jane

July 27th, 2010
7:35 am

As a former employee, yes, Aflac does not lay off employees. However, they “restructure” often and make employee “re-apply” for their job (no matter how long or well they have performed), which for some reason they often don’t qualify and there is nowhere to place them so they are let go from the company. Very sneaky!

Tech82

July 27th, 2010
8:40 am

Aflac also touts the fact that they have never had a rate increase on one of their products – which is technically true. Rather than increase rates over the years they simply replace products with newer (and more expensive) ones.

Having said that, it’s still a very good company to work for and one that does care about its people and its image.

former employee

July 27th, 2010
9:31 am

My husband was not officially “laid off” from AFLAC 20 years ago, but they found a way to restructure his department. Danny offered him a new position at a much lower pay and under terms that were an obvious way to get him to leave. This was the same day that my husband’s supervisor told him he was doing an excellent job and that he was going to recommend him for a salary increase. I’m not saying the company is a bad company to work for, but they aren’t as pure and innocent as Danny indicates. It wasn’t all bad since the job change forced us to move to Atlanta which was the best thing that happened because our children would not have had the quality of opportunities in the conventional town of Columbus that they have had in Atlanta.

Mel

July 27th, 2010
10:19 am

Aren’t a majority of AFLAC’s employees paid almost entirely off commission anyway? So, if they don’t sell, the company doesn’t pay them. And if they’re not making any money, the employee will probably leave on their own.

Existing Agent

July 27th, 2010
11:01 am

@Mel…the article is referencing the corporate associates, not the field agents, who are paid commissions, corporate associates are salaried employees of the company…

I will also say that having been in the industry myself for 21yrs, AFLAC has one of the BEST business models in the insurance industry…NO company exist without faults and Mr. Amos realizes that and continues to make the necessary changes to make sure the company does whats best for them, their associates, and their existing and future clients…I’ve only been an agent with AFLAC for just under a year and very pleased thus far…

Mel

July 27th, 2010
11:20 am

Noted, EA. Thanks.

Hockey Steve

July 30th, 2010
2:59 pm

I got scooped up by them fresh out of college(before I knew better) as a sales rep- biggest waste of 5 months ever. Their training is a joke; I got very little support from them.

The kicker was that, when I left them, I actually ended up oweing THEM money. College grads, beware!!

tellthetruthdamamos

August 1st, 2010
11:11 pm

Jane is telling the truth, as should you Dan! According to my neighbor who works there Aflac has permanently “laid off” tenured employees beginning forth quarter 2009 throughout first and second quarter 2010. They eliminated departments and positions and restructured, leaving the employees from the eliminated jobs to fend for themselves. They let them apply for other jobs in the company but the trick here is that the displaced employees from HR and the other areas that were in on the game were given first dibs at all available positions leaving nothing but a facade for the other employees thinking there were jobs they had a shot at. The only reason this hasn’t hit the press is because they define it as “position elimination” with the labor department, Check for yourself. Aflac and Dan Amos should be ashamed to publicly make the statement they are not laying off employees. And if they are willing to tell this little white lie, just think about what else they are probably doing with your money behind the scenes. SNEAKY, MISLEADING and JUST PLAIN LIARS!

Former Employee

August 16th, 2010
1:20 pm

I’m with Jane. Only a select few apply for other positions within the company and actually get the transfer/promotion/raise.