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The Actuary The magazine of the Institute & Faculty of Actuaries
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Careers: Excellent people

Growing regulatory uncertainty has made the past 12 months challenging for business leaders when setting out their actuarial recruitment strategies. As each regulatory instruction from the Financial Services Authority and its overseas counterparts unfolds, strains are placed on budgets by a new set of hiring requirements. With a reluctance to be at the mercy of the regulatory body and the subsequent risk of falling behind their competitors, practice leaders have had to make ‘considered predictions’ as to their future needs.

The senior management group at each firm will claim that their 2011 list of recruitment needs is a result of the same scientifically precise and scrupulous process that they apply to their everyday trade. However, it is clear from the outside that they are yet to find a cross-industry consensus. As one of the leading accountancy firms looks to increase its general insurance practice, another looks to push its resources into life actuarial. As one global bank looks to bring on a host of newly qualified actuaries, its direct competitor has all but stopped lower-end recruitment and is performing a search to bring in a host of new management positions that will bulk up their senior end.

In a marketplace that has been traditionally candidate-short, the lack of a common trend among firms throughout 2010 meant that the predicted salary rises for qualified actuaries did not fully materialise. The market remained relatively stagnant in comparison to expectations, but the fact remains that there will always be a place for the industry’s most respected professionals, even if there is not a direct hiring requirement.

The recruitment market across mainland Europe has been particularly buoyant. While still answerable to their respective regulatory bodies and with no common trends in required candidate profiles from firm to firm, hiring managers across the continent have a healthy approach to recruitment. As well as securing professionals to fill their immediate requirements, they are not averse to creating positions for an experienced actuary that they feel could add another dimension to their company.

This candidate-led approach is most prevalent in the emerging markets where actuaries are in short supply and very high demand. In a story that sounds like it has come from the back pages of a tabloid newspaper, two firms based in India recently went head to head to ‘sign’ a candidate. As a result, he saw his salary quadruple overnight, alongside a guaranteed bonus and a full benefits package. Understandable when securing a new business leader, but hard to justify for an actuarial trainee with six months’ experience and six CT papers.

In years to come we may mention his name alongside William Thomas Thomson and Geoffrey Heywood, but for the present he serves as a stark illustration of the shortage of qualified professionals in the emerging markets.

While the actuarial market in the UK is one of the largest in the world, it caters for a relatively small number of professionals in comparison to other areas of financial services. Consequently, the majority of firms will always have a greater demand for professionals than the market can cater for. The disparity between the number of vacancies and the number of qualified candidates can only widen as pressures are increased on actuarial practices. Despite most good candidates being known by their competitors, it is for this very reason that for the majority of senior appointments there will be a recruitment firm attached.

As an actuary you have gone through hours of rigorous examination, put in the overtime on complex projects, spent weeks familiarising yourself with the industry’s intricate regulations and then years building a name for yourself among your peers. As such, the decision of which recruitment firm you entrust with the responsibility of securing your next role should not be taken lightly, and in contrast with a decade ago, there are now an abundance of recruiters to choose from.

As with many candidate-driven sectors, the trend of outsourcing the recruitment process has grown in popularity. While sometimes more expensive than undertaking a search using internal resources, it is seen as a time-efficient way of securing a company’s strategic appointments. In addition, a couple of years ago as the recession reached new depths, and the financial services ceased hiring overnight, recruitment firms looked to new sectors in order to generate income. A vast number of firms that once specialised in low-level generalist positions were suddenly trying to make in-roads in senior level risk management and everything that it encompasses, with varying success.

In the same way businesses will receive a vast number of calls from recruitment firms offering their services, the leading industry talent will be approached on a regular basis by recruiters, who offer ‘new and exciting’ opportunities. Whether you are a practice leader or a potential employee, there are three ways to test the credentials of your recruiter:
>> Assess their industry knowledge base
>> Find out which firms make up their current client list
>> Ask if they work on a retained basis. While not a qualified actuary, any good consultant will have a solid understanding of the industry. By asking a few rudimentary questions about their clients or their personal perceptions on the latest regulatory guidelines, you will be able to quickly assess if they are an experienced sector-specific consultant, or a junior recruiter who sees you as a means of hitting their daily key performance indicators.

Firms are only worth the potential workload of their client list, and the quality of a recruitment company can be measured against the same. By sourcing the clients they supply to you, you will develop an understanding of where they rank among their competitors. A top recruiter will have an extensive list of reputable clients that they service on a regular basis. It should be noted, however, that firms sourcing for the uppermost echelons of the market, are not always in a position to articulate this information. As such, it is recommended that you allow them the opportunity to name-drop. It is not the most socially acceptable practice at a dinner party, but it will allow them to demonstrate the extent of their contact base.

In addition, find out what percentage of the firm’s work comes via retained assignments. A high percentage is the clearest indicator of a firm that is able to deliver on its promises, and has most likely done so for a number of years in order to win the contract.

The ability to remain competitive while working with the industry’s leading recruiters could prove instrumental over the course of 2011 for employers and potential employees alike. Over the course of the next 12 months, expect to see gradual salary rises across the industry in line with 2010, as demand continues to outstrip the supply. For the professionals working within a niche area, or those at the forefront of the most recent industry regulations, the percentage increase in total financial package could be as much as 20%. Business and practice leaders will continue to command an increase in percentage remuneration drastically higher than the rest of industry, yet these candidates will be few and far between as companies look to incentivise their staff to stay put, investing in the retention of their staff.

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Anthony Howitt is director at Compliant Global Ltd