Actuarial employers are struggling to adapt to this new, uncharted and (hopefully) nearly post-pandemic world. In this interview, Lisa Bull, president of Lechner & Associates Inc., explores a few recurring themes she’s been hearing from hiring managers.
How can I have both more open positions and fewer applications for those positions than before the pandemic? It can’t be that the 28-year-old ASAs we want to hire all decided to read the anti-work Reddit and/or take unemployment instead of acquiescing to hold a six-figure, relatively cushy job, can it?
Yes, I hear the snark in this question, too. But many hiring managers have admitted to feeling this way, which, to me, reflects a new frustration in today’s recruiting/hiring space. Let’s unpack this perspective because there are multiple components that must be identified and acknowledged to achieve better hiring results.
If your desired position/experience level is a near/new FSA with six to 10 years of experience, welcome to The. Most. Desired. Profile. Ever. In my 23 years of search, and much of Lechner & Associates’ 43 years of experience in actuarial search, this is the profile for which demand has always outstripped supply. The “hourglass” actuarial organization (with the middle experience tier slim or missing) is a real, recurring, industrywide trend.
Additionally, certain specializations are tougher to hire for than others. For example, if you seek an individual contributor for a valuation/financial reporting role and you require previous valuation/financial reporting experience (more on this later), it may take some time to find the right person for this position. Why? Don’t shoot the messenger, but:
- Valuation roles tend to be viewed as “less sexy” than product development/pricing-side roles. That’s the first shrink factor in the prospective candidate pool—less perceived wide appeal leads to less interest.
- Next, actuaries in valuation roles tend to be more risk-averse, which is the second shrink factor in the prospective candidate pool. Higher risk aversion means a tendency for people to remain in their current roles and/or at their current organization.
- Then, valuation/financial reporting work tends to be viewed as more or less the same everywhere. Right or wrong, many actuaries may not be able to perceive how a mid-level valuation job at Company A is truly different/better/more attractive from a mid-level valuation job at Company B—which is the third shrink factor. If valuation roles seem the same (or darn similar), why move?
- Finally, pull out a calendar and cross off all the crucial, high-stress, required work periods for these folks—typically late December, all of January and some of February (for yearend); much of February (board meeting); the first two weeks of each quarter (for quarter end); and, potentially, the first two weeks of every month (for month end). These mandatory periods equate to 57% of the year, which is the fourth shrink factor. While actuaries in valuation roles don’t necessarily hold a higher degree of loyalty to their employer (compared to actuaries in other specializations), we frequently see a desire not to leave one’s employer shorthanded or in the lurch during such crunch times, and this goes both for taking time off to interview (less time-consuming with remote interviewing than on-site interviews, to be sure) as well as actually leaving the company.
- And we haven’t even talked about location!
Is it just my perception that actuarial work has gone almost entirely remote (i.e., location-specific roles get nearly zero applications), or is this actually the case?
Because most actuarial employers are willing to hire employees for remote work arrangements in most roles, this has become table stakes. If you don’t offer an option for remote work in an actuarial role, you immediately lose candidates. They won’t respond, which means they’re invisible to you—you don’t even get the chance to interview them. And this goes for junior analyst roles, too.
Hiring managers have lamented that to onboard a new hire remotely and really integrate that new hire into the culture and organizational flow, it can be quite challenging, particularly for an inexperienced hire. I am in complete agreement. Best practices undoubtedly will emerge on this topic—we already are seeing some of our clients have good results while others struggle. For this article, the point is simply if you want to have the best shot at seeing the most and the highest-quality candidates, offering remote work is now the price of admission.
We struggle to find the exact right talent, particularly for senior-level roles. What gives?
We’ve observed that today’s market has exposed the shortcomings of hiring primarily based on specific skills or experience, especially for senior-level positions. This has been the go-to approach of most organizations and individual hiring managers, and such an approach is recognizable by:
- A lengthy list of “required skills/experience”
- An overreliance on keywords
- Specific focus on what the candidate hasn’t done or doesn’t have rather than what they have done or do have
In our employer due diligence process, we ask our clients to define what the “right talent” actually means. Time and time again, what seems like a straightforward question quickly morphs into a deeper conversation, with many hiring managers being caught off-guard as they find themselves grappling with unconscious assumptions they’d made. Our view has long been that hiring managers are not hiring for a set of skills or experiences. What they’re actually hiring for is a set of desired results. If as a hiring manager you could produce the results you need and want with the resources you have, why would you hire?
It’s the rare hiring manager who feels they are adequately staffed. Yet, typically, headcount only becomes available when an organization/area/team is recognized as genuinely struggling to deliver the business results and impact that others depend upon or desperately need. So, let’s keep the focus where it belongs—on the desired business results and impact.
For senior-level roles, candidates typically have a deep, varied and rich background—much more than ever gets captured in a resume or the occasional cover letter. Hence, it would be to a hiring manger’s advantage to expand their perspective. The candidate who doesn’t check all (or even many) of the “required skills” boxes could be exactly the “right talent.”
If you choose to shift your hiring practices to focus on business results rather than skills, what changes?
The first thing that a hiring manager needs to change is their thinking and approach. You begin to ask:
- What business results has this candidate (or their team) produced?
- How have those results impacted the business?
- How do those results align with our desired results (i.e., related to profitability, revenue, risk, expenses, internal or external relationships, staff development)?
- In what ways could those previous results suggest this candidate’s potential effectiveness in this role and potential value to our organization?
- Where are the gaps? Are my team and I willing and able to teach or fill in those gaps?
As you think about and evaluate candidates in this way, you begin to see opportunity and potential in candidates you previously may have excluded from consideration. And you likely will find that your hiring results change.
For example, a reinsurance client recently needed to hire for a demanding mergers and acquisitions (M&A) role. We advised them that there was a limited prospective candidate pool. Initially, our client felt a key requirement was a deep knowledge of the U.S. regulatory environment. However, as we moved through our due diligence process, our client chose to focus on the desired business results and strategic impact of this new employee to the overall staff (not requisite experience). That shift enabled them to explore additional candidates and make a successful hire of a candidate who, when viewed through the skills/experience lens, did not appear to be a strong candidate.
Ultimately, our client focused not on the candidate’s lack of specific experience but on his track record of quickly and effectively producing deal insights in brand-new (to him), complex products in new geographic/regulatory markets, which enhanced his prior employer’s revenue and profitability without increasing risk. Our client’s newest employee has ramped up quickly and already has delivered results that have increased revenue, enhanced profitability and solidified market share and presence in a strategic geographic area for the company.
To summarize, if you aren’t satisfied with your hiring results, perhaps a change is in order. We all know doing the same thing over and over and expecting different results isn’t the answer. Is it time to adapt your actuarial hiring approach to the reality of today’s market?
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.
Copyright © 2022 by the Society of Actuaries, Schaumburg, Illinois.