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The Actuary The magazine of the Institute & Faculty of Actuaries

The workforce of tomorrow

A group of employment professionals specialising in insurance and finance discuss emerging recruitment trends. Chris Seekings reports



Gender, ethnic and socioeconomic diversity, flexible working hours and equal rights are just some of the trends disrupting recruitment and the actuarial profession worldwide. And they are challenges that can often be the most uncomfortable to confront.

Globalisation, Brexit and technological advancement are equally daunting. Undeterred, we invited a select group of employment and recruitment professionals, some specialising in the actuarial space, to break down the emerging issues that are shaping the workforce of tomorrow.

Broadening horizons

The IFoA’s Diversity Advisory Group chair, Chika Aghadiuno, begins by asking the panel what recruitment changes they have observed during the past five years. One difference is the number of candidates looking for a career beyond the traditional actuary’s role. “They want a sense of purpose in what they do, which is difficult in some professions,” explains Hewitt Stone CEO Noble Asinugo. “They want to feel there is a long-term vision, and to know how their role will impact opportunities in the future.”

The actuarial profession is going through a transformation. Actuaries are dealing with topics ranging from climate change and geopolitics to cyber risk and data science. The IFoA has been key in this expansion, adapting its qualification to enable actuaries to broaden into widerfields more quickly. “I have spoken to a number of people who have been at an organisation for a few years and then say ‘I’d like to see what pricing is like, or what the capital market is like, I want to experience more of that’,” Asinugo adds. 

Employers now expect recruits to have a wider set of skills than ever before, with typical number-crunching roles becoming a thing of the past. “Actuaries have to have a more commercial and outward-facing perspective, with better communication skills,” says Sophie Peterson, director at Orange Malone. “You’re no longer sitting in the background, tied to a computer, writing models – you are required to be more qualitative in your judgment.”

Data analytics, programming and visualisation skills are in demand, but this needs to be combined with insurance expertise. Failure to understand the business and commercial aspect of analytics can make it tough for new recruits, according to Willis Towers Watson director of life, Heloise Rossouw. “You need to understand the broader business of insurance and integrate the end-to-end process of analytics and automation,” she says. “But the younger people we recruit are inquisitive and brave – give them a problem and they go and do something with it.” 

Actuaries branching out into wider fields comes as a relief to Karin Warwick-Thompson, managing partner of Boyden UK. “I wrote an article for the Institute around 1999, warning that the actuarial profession could die if it didn’t broaden,” she says. “Opportunities have opened up, mostly on the risk management side, which is exciting – you could be working with a cyber expert from the military, for example.”


Freedom and flexibility

Another development is the way power has been transferred from employer to candidate. “It’s not just about candidates selling themselves – companies need to show that they have what candidates are looking for,” says Rossouw. A key aspect of this is the desire to work remotely and flexibly. Smartphones, tablets, more efficient computers and greater internet access are making physical presence in the office less important. 

“Candidates want a better work-life balance, to be able to work part-time and take a sabbatical after a few years,” Peterson says. “That would never have happened before.”

While the populations of cities are set to explode during the next few decades, some recruitment firms are experiencing a trend suggesting the opposite. Millennials are leaving university with more debt, and house prices are making it hard for younger people to get on the housing ladder. “The geographic question is interesting,” says Timi Dorgu, senior manager at Rare Recruitment. “There are huge commuter costs, yet in the North of England, for example, you can pay half the rent but do the same job, especially with technology.”

Flexible working has traditionally been a focus for women who wish to work part-time while caring for a relative or children – but this is changing. The panel agrees that men need to grasp the same rights as women. “It has to be encouraged – if it’s just an option, there is sometimes a taboo around men using it,” says HFG’s actuarial and risk lead Paul Fox.

Not that this doesn’t present its own challenges. Aviva has paid parental leave for up to six months – regardless of employees' gender, whether they are in a same-sex marriage, or whether the child is theirs biologically or adopted. “I have had some managers say ‘We think this policy is fantastic, but it is creating a problem for us’,” explains Aghadiuno, who is also part of Aviva’s Enterprise Risk team. “My response is: ‘No one said it was going to be easy, but this has levelled the playing field.’ It requires the organisation to go above and beyond, and as people managers we need to be more creative and recognise the opportunities it presents to others in our teams.”


Driving diversity

The panel agrees that much progress has been made around gender diversity in recent years. The pool of potential candidates is split roughly 50/50 between men and women, with a good balance in more junior positions. “When I first went to the GIRO conference, there were barely any women, but now there is a good mix, which shows the direction we are heading in,” Fox explains. He admits, however, to a lack of female representation among the top actuarial roles: “As you get to the more senior levels it tails off rapidly.” This is not a problem confined to the actuarial profession, though. A recent study found that current trends mean it will take until 2090 for executive committees at FTSE 350 firms to achieve gender balance. 

A problem more specific to actuarial companies is the difficulty in attracting an ethnically diverse group of employees. “Our pool of candidates isn’t as diverse as we want it to be,” Asinugo says. “If there isn’t enough diversity at pool level, we are not going to see many ethnic minorities at the top.” The profession has had little problem attracting workers from Asian backgrounds, but struggles to find candidates of African and Caribbean descent. “It has been difficult, because they have not seen others like them in those roles,” Asinugo explains. “You have to explain how the profession can set them up with a comfortable life, so it is something they aspire to.”

Awareness of the profession remains a big challenge. A recent study found that only 30% of occupations are easily recognisable to African and Caribbean boys. “That’s seven out of 10 possible jobs that they have no awareness of, and I’m fairly confident that ‘actuary’ would be one of those seven,” Asinugo explains. “You would be amazed by how many people we talk to who have never heard of what an actuary is.”

Warwick-Thompson asks whether the profession has done enough to appeal to young people from diverse backgrounds who might not see it as a ‘cool’ career. “I don’t think kids necessarily see being a doctor or a lawyer as cool either,” Asinugo responds. “An actuary can have a job for life, and that needs to be communicated better. The more employers reach out to school-age candidates and introduce them to the idea of actuarial work, the more it can be something they can aspire to.”

Another problem involves the method firms use when searching for recruits. Companies will approach several recruiters and ask them to fill roles for them. “Then the race is on, and I don’t have time to proactively talk to a diverse pool of candidates, because by the time I have done that the job has been filled,” Asinugo says. “The model isn’t effective. An opportunity is being lost in terms of the impact recruiters can have.”

Fox recounts that HFG has been able to work with a client exclusively, with great success. It compiled a shortlist of candidate CVs with a 50/50 gender split and removed any hobbies that might indicate gender. “The best people got the job, and it turned out to be two women and one man,” Fox says. “It’s more work for us, but it’s worth it because it’s exclusive.”

There is also a danger that candidates from diverse backgrounds can fall into the trap of thinking they have “made it” after finishing their exams, according to Asinugo. “They often need more encouragement, to push them further, as there is a lot more they can do if given the support.”

But who is responsible for providing support to staff who are less confident? There is agreement that employers need to be more nurturing, and more considerate of personality differences. “They have got to develop ways of generating leadership material without doing it in a one-size-fits-all way,” Peterson says. 

Companies also need to do more to ensure employees do not suffer a confidence hit after taking up flexible working options or paternity leave. “A lot of women take time off after having children and lose confidence because their self-worth is tied to the number of hours they work,” Rossouw says. 


Pecking order problems

There is concern among the panel that there has been much talk about gender and ethnicity, but no discussion around wider aspects of diversity. “I find it troubling that there should be a ‘pecking order’ of diversity,” Aghadiuno says. “It is irrational to think you are going to fix gender first, then move over to race and ethnicity – diversity is not compartmentalised. We are doing this to achieve diversity of thought and perspectives, all these other things are just proxies.”

However, this is where companies are today. A recent study of HR professionals and hiring managers found that gender is the number one diversity priority, coinciding with media scrutiny of the gender pay gap. 

“From my perspective, the focus has been more on gender and ethnic backgrounds because that is where the bandwagon is right now,” says EY’s HR for actuaries, Ekta Desai. The panel agrees that attention should be given to socioeconomic backgrounds, too, but concedes that this can be hard to measure. “Whether they were eligible for a free school meal is a strong indicator, or whether their parents have been to university and what their occupation is, but it’s hard to track,” Dorgu says. “It is easy on gender and ethnicity, but socioeconomics is hard and a lot of companies don’t know what their starting point is.”

And becoming an actuary requires a high level of academic achievement, which can often be tied to a student’s socioeconomic past. “We encourage contextualisation where you take into account the school and the grades that someone has achieved and their social economics, right through to flexible working and equal maternity and paternity rights,” Dorgu adds.

But it is often the employer that limits options. Peterson explains, for example, that some clients actively target Cambridge University graduates. “You can’t even get on a graduate course if you haven’t got a 2:1 degree, but what about all the people with 2:2s who are really good and just need a bit of help?” she asks.

While many companies look at candidates abroad to satisfy diversity needs, there are fears that they are overlooking local talent. “Before running to places like South Africa, Asia and Singapore, I would be interested to understand why more young black people here are not working in big institutions,” Peterson continues. “People from other parts of the world might be similar to who you already have here – you might find what you are looking for closer to home.”


Creating a culture

The discussion keeps returning to company culture – something that wasn’t on the radar at board level a few years ago. “We started to think about this more after the financial crisis, when we were asking how it happened,” Warwick-Thompson says. “What I find thrilling is that the board is interested in talking about culture, and I am sure everyone around this table is passionate about making change.” 

The panel admits that changing company culture is an uphill struggle, though. Dorgu explains that people are attracted to people who look and sound like them. “The thought process is to hire as many people who look like them as possible, because they are going to connect,” he says. “They are going to play golf together and get on like a house on fire because they have got the same experiences, so don’t need to build a rapport.”

It is also suggested that companies create an inclusive culture by avoiding some of the more traditional social activities. “We are looking to move away from activities based around alcohol, which may not work for some religions,” Rossouw says. She also explains that many candidates now come with a global perspective and have worked in various different companies and markets. “With that comes the communication element – not just different languages, but different ways of raising things, which is very important.”

Fox says that the practice of ‘reverse mentoring’ has had considerable success. This involves a junior member of staff pairing up with a more senior manager to share their experiences and perspectives. “Reverse mentoring is a great way to drive change and action, because you can’t ignore your own people when they’re telling you the truth of what’s happening,” Fox explains. “What is it like to be a younger person at that firm? What’s it like to come from a diverse background and navigate the culture of that firm? Board-level management actually knows there is a lack of diverse talent at the bottom and that something needs to be done now.”

HFG runs a summer academy programme for children from underprivileged backgrounds in East London. “They are 16 and come in to learn about insurance in the hope they will go on to be part of bigger programmes,” Fox says. “The way to reach people is to take a proactive approach.” Rare Recruitment is on the same wavelength, and actively targets students from disadvantaged backgrounds. “We have launched a product that helps firms find candidates as young as 17 based on their demographics and quality of school,” Dorgu says. “We also work with these candidates one-on-one to make sure they are as prepared as possible.”


Change in the air

Many other external factors are driving change in the recruitment industry, too. Brexit, for example, has not gone down well, according to Asinugo. “I know quite a few people who are moving back to their home countries in Europe because the branding of the whole thing, and the way it has been communicated, has left a bad taste,” he says. “Companies can do more to communicate the effects better.” 

Regulation is another trend shaping the industry. Fox explains that some companies have had to invest a lot of time and money meeting regulatory requirements in recent years and have got “badly burnt” as a result. “A lot of mid-level actuaries are now saying to me, ‘I’m not sure if I want to be a chief actuary, it seems like an awful lot of meetings, satisfying regulators and board members, justifying ourselves all the time rather than staying in the numbers’,” he says. Consolidation in the pension and insurance industry is also growing in prominence, while fintech start-ups continue to threaten the incumbents.

What were the takeaways from the meeting? The panel agrees there shouldn’t be a pecking order arrangement of diversity and inclusion, with some admitting they have fallen into this trap before. There is also agreement that the responsibility falls on both employers and recruiters to deliver diversity, and that firms should look for potential rather than tick-box abilities. “I think you have a long way to go but it sounds like you are making the first steps,” Dorgu says. “But you have to think long-term – it can’t be a flash-in-the-pan trend that you just drop over time.” 

There is also a need for companies to avoid bias and look to younger candidates, and a continuous requirement to challenge the status quo: “There is nothing that frustrates me more than people saying, ‘It is just the way it is’,” Asinugo says. “When we are looking at things like diversity and other changes, we need to continuously improve and challenge complacency.”

This could be a formidable task for an industry that is always looking to the past to determine future risks. Desai says that tomorrow’s workforce must take the opposite approach to ensure their success. “What you want to achieve is in your hands, and you cannot let your past determine what you get in the future.”

More Info

Diversity Advisory Group: bit.ly/2SxR4CU or email [email protected]

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