The insurance company, which currently has 9,300 salespeople, intends to shed many of its older sales staff in a continuing change of emphasis from collecting premiums to selling new insurance policies. The basic salary of many salespeople is to be cut from pounds 9,500 to pounds 3,500, making them much more dependent on commission earnings. 'There's going to be much more pressure on the Pru's customers,' one salesman said.
He added: 'It's going to be far more stressful. It's going to be like Allied Dunbar. It's not going to be the company it was in the past.'
The National Union of Insurance Workers, which claims 12,000 members among Prudential's sales force and support staff, is making a last- minute attempt to persuade the company to amend its plans by taking the dispute to the Advisory Conciliation and Arbitration Service. The first discussion with the Acas mediator takes place today.
David Parsons, the NUIW's national officer, said: 'Quite frankly, their approach will be a disaster for the customer, for the company and for our members. They are abandoning completely the traditional approach. The man from the Pru, or woman from the Pru, is effectively disappearing and being replaced by a direct sales force. It takes people away from what is a community-based job, from what the man from the Pru is now.'
While Prudential recognises many of its sales representatives fear the changes, the life insurance giant claims they will provide a better service to customers by reducing costs.
Jim Sutcliffe, deputy managing director of Prudential's home service division, said: 'We are not trying to move away from the traditional Prudential virtues. A high-pressure sales force is something we are trying to avoid.'
In recent years, Prudential has re- directed the efforts of its sales force away from the door-to-door collection of premiums as more customers are willing to pay by direct debit. A reorganisation known as Scenario 3 has divided field staff into either sales-oriented financial consultants or customer-service representatives, who do some selling but much of whose time is taking up in collecting premiums and administration.
The latest 'KAP 2' initiative takes this a stage further. Financial consultants will bring in new customers, customer-service representatives will sell to existing customers and collection will be hived off to a new team.
The number of customer-service representatives is intended to halve from 5,200 to 2,600, with the number of financial consultants rising from 4,100 to 4,500. Prudential expects the bulk of the departing representatives, many of whom are over 50, to take early retirement or voluntary redundancy rather than to join the 1,800 collectors.
The basic salary of the representatives will fall from pounds 9,500 to the pounds 3,500 that financial consultants receive. The representatives will be guaranteed a further pounds 6,500 in advance commission. Mr Parsons said: 'If somebody was falling back upon that pounds 10,000 basic and guaranteed commission, then there's no question that they would not be employed by the Pru for very much longer.
Pru salesmen claim the financial consultants already suffer the high turnover in personnel that is common in other life insurance sales forces. One salesman said: 'This is not the reputation that the Pru has had for staff in the past. I've heard of people who have been contacted by four different Prudential reps in six months.'
Cash collection of premiums is expensive, particularly when many of the premiums are small. Mr Sutcliffe said Prudential has a million policies more than 20 years old with an average premium of pounds 1 a month.
'Travelling around collecting is a time-consuming activity,' he said. 'Traditional collectors spend only 20 per cent of their time selling.'
Prudential has said it will participate in the Acas process only until 11 June, an attitude criticised as 'not helpful' by Mr Parsons. Mr Sutcliffe said management had been talking to the union since last October: 'We need to get on with it', he said.Reuse content