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The Actuary The magazine of the Institute & Faculty of Actuaries

Careers: A time and a place for actuaries

The UK’s economic output has fallen for the first time since 1992, with successive quarters of negative growth signalling the beginning of the dreaded "R" word. As future uncertainty grows, businesses sensibly look to tighten their belts, typically focusing on their most immediate costs - the workforce. So how can firms ensure that they keep a tight lid on actuarial recruitment costs, whilst continuing to attract the highest quality actuarial trainees necessary to deliver future success?

Difficult times for actuarial recruiters
Faced with the choice of making redundancies from the existing workforce or reducing the number of new staff recruited, most firms opt for the less painful latter option. However, whilst reducing the number of new recruits can help constrain costs in the short-term this strategy can store up longer-term problems for the business.

This is particularly true in the actuarial sector, where new recruits typically take 4-5 years to qualify and start adding significant value to the business. Any short-term reduction in the number of graduate actuarial trainees recruited will have a much more significant longer-term impact on the business.

Is there an alternative?
Graduate actuarial trainees are a relatively expensive resource: good candidates are hard to find, and salary costs are high - especially once study support/leave is taken into account (trainees effectively work a 4-day week). However, there is an alternative...

Actuarial placements
An increasingly popular option is for actuarial employers to take on undergraduates for paid ‘industrial’ placements.

Having completed their placement year, the students - who are typically in their penultimate year of studies - return to university to complete their degree. Placement students offer many benefits to employers:

>> Most students are studying for a maths or actuarial science degree, and so are highly numerate and already well-versed in basic actuarial techniques

>> Placement students do not study for exams, so work five days a week and can provide invaluable exam cover for other actuarial students

>> The students are a highly flexible resource, and can be used to ‘plug’ actuarial holes in the business

>> The placement usually forms part of the degree, so students are highly motivated, and work to extremely high standards

>> Students are typically available for up to 15 months, which means that they can train up the next incoming placement student

>> Placement students are good value, typically working out at around 30-40% cheaper than the cost of a comparable graduate trainee.

Complementing existing recruitment processes
Perhaps the biggest advantage of taking on a regular number of placement students is that it helps to support a company’s overall actuarial recruitment strategy - but without the long-term commitment that a graduate trainee entails.

Placement students are effectively undergoing a 12-month job interview, where every aspect of their ability and potential can be accurately assessed. This provides a far more effective and accurate measure of their ability and fit to the company than the typical ‘snapshot’ obtained from interviews and assessment centres.

Placement positions provide actuarial firms with an efficient and low-risk way of identifying and recruiting high quality actuarial students a year earlier than the usual ‘Milk Round’ route.

Moreover, if the student returns to work for the placement-year company following graduation, they have a year’s relevant experience, and are able to add value straight away.

Finding placement students
Although placement students offer significant benefits to actuarial employers, identifying the right students is time-consuming and expensive.

In practice, top quality students are few and far between, and tend to come from a wide range of different universities. To attract the best students, employers therefore need to put a great deal of effort into establishing a presence at a number of different institutions (for example, through fairs, presentations, and open days). Moreover, the process of screening students - filtering CVs and organising interviews, is extremely time-consuming and requires sustained commitment and effort from the organisation.

However, employers do have the option of an easier and much more efficient method of identifying and recruiting placement students.

There are a number of firms which specialise in identifying the best quality students from around the country, and providing employers with comprehensive screening and assessment services, ensuring that they only take on the strongest and most suitable placement students. Services that may be provided by these companies include:

>> Promoting the concept of actuarial placements to students through presentations and attendance at careers fairs and seminars at UK universities

>> CV screening and student interviews

>> An online system allowing employers to view details of selected students

>> Presenting details of specific employers to actuarial students, and promoting the benefits of working for them.

Given the current difficult market conditions, it might be tempting for actuarial firms to scale back on their recruitment activities. However, actuarial placements offer employers the opportunity to reduce recruitment costs, whilst still maintaining a prudent and sustainable longer-term strategy that ensures they continue to attract the highest quality actuarial recruits.

Mark Heller is director of Alpha Consulting and The Actuarial Placement Company, and Roger Massey is director of ARC and The Actuarial Placement Company

>> To view the latest actuarial jobs, visit http://jobs.the-actuary.org.uk/