24 Nov 2011 | Peter Baker
The technical and commercial sophistication of the UK's actuarial community is a key plank in the insurance industry's competitive advantage and its status as pillar of the country's economic strength. It's therefore appropriate that the UK should seek to attract the world's best actuaries and that the world's best actuaries should seek to work here.
Such overseas staff are an enormous boon to the profession: supplementing the mathematical skills that are its lifeblood and expanding the cultural horizons of those working within it. Retaining the services of such staff should be part of the recruitment strategy of every major actuarial employer in the country. For actuarial recruiters, liaising with overseas actuaries is a day-to-day part of the job.
The work of both actuarial employers and recruiters has therefore been disrupted by the changes to the rules on managed migration to the UK, which have taken place during the past year.
Among the main problems have been uncertainty regarding the direction of policy and the unpredictability of its implementation, which, observed from the factory floor, has often been haphazard and poorly communicated. For example, on 22 December 2010, the government announced - with one day's notice - that it was to cease issuing Tier 1 (General) visas for overseas applicants. I know several actuaries and clients whose plans were thrown into chaos by that unexpected and abrupt procedural change.
The political backdrop
The backdrop to all this are larger political developments, of which the actuarial world has been caught in the wake. The consensus on immigration policy is in flux. There is growing agreement that the laissez-faire attitude of the late 1990s and 2000s brought short-term economic and demographic advantage at the expense of long-term social cohesion. For example, there is a perception that some immigrant communities have failed to assimilate into Britain's multicultural ideal. In addition, the argument that inward migration depresses wages of the low-skilled is likely to remain prevalent while unemployment is high.
The irony for actuarial employers is that these concerns very specifically do not apply to the sorts of individuals they're looking to hire. The qualified and senior part-qualified actuaries, of which the UK economy has the greatest need, tend to be urbane, cosmopolitan and very well educated. These are not the type of migrants who have trouble understanding, assimilating and contributing to British culture. Their entry into the UK is certainly not likely to depress wages among the low-skilled.
The upshot can be frustrating for recruiters.
From where we stand, it's a no-brainer. Thriving, private sector organisations are desperate for people with proven actuarial skills and good exam progress. Such individuals become economically active immediately on entering the country, boost the profits of some of the UK's most high-performing firms and pay large amounts of income tax to the exchequer: precisely the sort of migrants from whom the UK most benefits.
But immigration policy is a blunt tool. For recruiters who spend their working days matching candidates to client needs, it's generally fairly clear who is employable and who is not. However, visas are awarded on a points-based system which doesn't even recognise overall work experience.
This is rational from the point of view of policymakers (who couldn't possibly design rules calibrating experience requirements for every profession), but throws up inconsistencies at the operational level. We often see overseas candidates with visas but no skills the UK economy particularly needs. Meanwhile, I know a senior-part qualified actuary, working for a top-four consultancy, who is about as employable as it is possible to be, but who couldn't get a Tier 1 visa because he didn't have a masters degree.
We also see first-hand the ways perception among overseas candidates differs from reality. Such individuals, anticipating streets paved with gold, often fail to appreciate the intensely competitive nature of the UK market. Management experience in a developing economy will not necessarily qualify you for a management role in Britain. If your career to date has been at a foreign financial regulator, it's very unlikely that you'll secure a role at a London investment bank.
Looking to the future
Britain's managed migration policy will probably remain in flux for some time. The country is evaluating the nature of its multiculturalism. Immigration is likely to remain high on the political agenda. The rules around Tier 1 and Tier 2 visas are easy policy levers for governments to pull.
Unfortunately, this will make Britain less attractive to overseas actuaries, intensify the shortage of actuarial skills and mean visa risk for both employers and employees. There's a limited amount the actuarial community can do about this, other than to ensure it remains an active part of the business lobby.
Advice for employers
I advise recruiting managers who field CVs to familiarise themselves with the commonest classes of visa. This will allow them to quickly assess what, if any, visa risk would be associated with hiring a particular candidate.
The key visas are:
- Tier 1 (General) visas. This is the ideal visa. It allows candidates to work for any UK employer and freely move between them. There is little or no visa risk to the company. Retaining the visa essentially requires staying employed and the relevant paperwork is the responsibility of the candidate. Plenty of overseas actuaries in the market work through this class of visa. Unfortunately, the government has ceased to issue new ones.
- Tier 1 (Post Study Work) visas. In the actuarial context, these are only relevant to graduates or recent graduates. They provide eligibility to work in the UK for two years after graduation. The Home Secretary is currently consulting on this class of visa (until April 2012), so the rules may change.
- Tier 2 visas. These are company-sponsored visas. They give the employee the right to work only for the sponsoring employer. There are many sub-categories of Tier 2 (including the Tier 2 general, currently subject to an annual maximum of 21,700). The employer is responsible for undertaking the application paperwork.
- Tier 5 (Youth mobility). These visas are issued primarily for non-economic objectives, such giving Japanese or Australian twentysomethings the chance to take gap years. They allow freedom of employment, but are only valid for either 12 or 24 months. Employers looking to permanently hire staff on such a visa should make plans to eventually sponsor them through a Tier 2.
- Dependant visas. These visas are issued to spouses of individuals employed in the UK under a Tier 1 or other type of visa. They allow the dependent spouse freedom to work for any UK employer. Ironically, if the partner in question is on a Tier 2 visa, the dependant spouse has more freedom within the labour market.
Advice for overseas actuaries
If you have a Tier 1 visa and intend to stay in the UK, keep an eye out for changes to the extension rules, on the Home Office website. Without a Tier 1 visa, your ability to move jobs to your own best advantage will be curtailed.
Generally, we find that gaining Tier 2 sponsorship is extremely difficult at the current time, particularly given the administrative burden placed on employers. However, there is good reason to believe this will change. As the new system beds in, employers will become more familiar with it, particularly given that it's now the main route for hiring overseas actuaries.
Bear in mind that, whatever the year-by-year variations, the underlying theme for professionals navigating the UK's visa regime tends to stay the same. That is: that the longer you work, progress your career and increase your remuneration (and resulting tax payments) the easier it gets. Employers who wouldn't dream of going through the rigmarole of sponsoring a junior part-qualified actuary will pull-out the stops for experienced, qualified consultants.
Finally - despite the current flux in its managed migration system, the UK remains one of the most interesting and rewarding environments in the world in which to live and work. It has an exceptionally free and open economy, a society that's particularly amenable to non-natives, cultural assets that rival anywhere on the globe, and it remains at the intellectual and physical heart of global insurance markets. Not a bad place for an actuary.
Peter Baker is a Recruitment Manager at Reed Actuarial