India’s largest and most reliable insurance provider, Life Insurance Corporation of India (LIC), has been observing a gradual decline in its workforce in the last five years. According to recent data provided by Finance Minister, Mr. Pankaj Chaudhary, the number of permanent employees in LIC has fallen from 114,498 in March 2020, to 98,661 in March 2024 in March 2024. This significant decrease raises many questions about factors contributing to this decline and its possible impact on the operation of LIC and customer service.
Understanding the decline in LIC’s workforce
As a Board-Epouced Commercial Unit, the LIC determines its manpower requirements based on many factors including business expansion, operational requirements, retirement and voluntary exit. The declining workforce may be attributed to the combination of natural attraction, retirement policies, recruitment trends and changes in the operating model of LIC. Year-wise workforce figures indicate a steady decline in permanent employees:
| License workforce | |
| Year | Number of permanent employees |
| 31 -March -2020 | 114,498 |
| 31 -March -2021 | 108,987 |
| 31 -March -2022 | 104,036 |
| 31 -March -2023 | 98,463 |
| 31 -March -2024 | 98,661 |
Major reasons behind the decline in workforce
The decline in LIC’s workforce in the last five years is powered by several factors, including retirement, limited recruitment, digital changes and voluntary exit. The following may be the main reasons behind the decline in LIC’s workforce.
1. Supernation and retirement policies: One of the primary reasons for the decline of the workforce is supernation (compulsory retirement). LIC, like many government and semi-governmental organizations, is a structured retirement policy where employees retire on reaching a certain age. Each year a large number of retirement naturally reduces the workforce.
2. Voluntary Retirement Plan (VRS) and resignation: Another contribution factor is the voluntary retirement plan (VRS), which allows employees to retire early with benefits. Many employees opt for individual reasons, changing career preferences, or early retirement due to better opportunities in the private sector.
3. Limited new recruitment: While LIC operates the recruitment drive for various positions, the process of hiring does not keep pace with the number of employees leaving the organization. The company manages to recruit strategically based on business requirements and digital change initiatives, leading to less new fare.
4. Increasing dependence on technology and digitalization: LIC is aggressively expanding its digital appearance and automation efforts. With the rise of AI-operated customer service, online premium payment and digital policy management, the requirement of a large physical workforce has decreased. Changes towards a technical-powered business model have adapted to manpower requirements.
5. Business model and expansion strategy change: LIC’s expansion strategy has led to a change in recent years. Instead of increasing manpower, company is focusing on availing technology, partnership and third-party services. With increasing competition from private insurance players and fintech companies, LIC is adopting a more agile and lean operating approach.
6. Unfortunate death of employees: Covid-19 epidemic and health-related factors have also contributed to the reduction in workforce number. Some employees have unfortunately passed away due to health issues, which affects the counting of the overall workforce.
Implications for banking and insurance exam aspirations
The decline in LIC’s workforce presents both challenges and opportunities for the candidates for banking and insurance exams. While LIC is optimizing its manpower through digitalization and automation, stable decrease in permanent employees suggests that mass recruited drives can occur on the horizon.
1. LIC may soon release a big vacancy: With the shrinking of the workforce over the last five years, LIC may need to fill the vacant positions to maintain efficient operation soon. This may result in a large -scale recruitment campaign for Assistant, AAO (Assistant Administrative Officer), ADO (Apprentice Development Officer), and other roles. Candidates should remain updated on official LIC information and start preparations in advance.
2. Increase in competition for LIC and banking jobs: As low vacancies have been announced in recent years, demand for LIC and other banking jobs has increased, leading to an increase in competition. Candidates should focus on fully preparation, regular fake tests and strategic examination skills to secure a situation.
3. High load on digital and financial knowledge: With the moving towards digitalization and automation, the future recruitment exam can give more emphasis on digital literacy, fintech trends and financial awareness. Candidates should strengthen their knowledge in areas such as banking technology, AI and digital transactions in insurance.
4. Opportunities beyond LIC: Private and public sector increase insurance: While LIC remains the largest player in the insurance sector, private insurers and fintech firms are aggressively expanded. Aspirants should also find out job opportunities in LIC and public sector banks as well as private insurance companies, NBFCs and digital banking platforms.
5. Need a strong preparation strategy: In view of LIC’s ability to release a large -scale vacancy, candidates should stay ahead by preparing with LIC AAO, ADO and supporting exams:
- Update course coverage (quantitative qualification, logic, English, general awareness and insurance knowledge)
- Regular practice of last year’s question papers
- Fake tests to improve speed and accuracy
- Pay attention to banking, insurance and economic trends
