Actuary, Actuaries, Actuarial
1800 West Larchmont Avenue, Chicago IL 60613
(800) 837-8338 / (312) 867-2300 / (312) 951-8386 (fax)

Our Position on Restrictive Recruiting Arrangements

The following is in response to a continuing number of requests, from organizations which employ actuaries, to enter into agreements which restrict us from having recruiting contact with their employees in return for the opportunity to do future business with the organization. We have posted the following statement because we think it is important to clearly and publicly define the types of agreements that we feel we can properly enter into and the rationale behind these decisions.

D.W. Simpson & Company exists to serve the actuarial profession not only through the recruiting of actuaries for specific positions but also by providing actuaries with information on general employment and compensation trends and working closely with candidates who have made the decision to change positions.

We believe that the actuarial profession (and any profession) is best served by an open market for the services of its members and that the dissemination of information, on compensation as well as career advancement avenues, by recruiters is an important component of this free employment market. Agreements which severely limit recruiting firms from contacting a company’s actuaries serve to enable the employers of actuaries to be less competitive in relation to salaries and opportunities for advancement than they would have to be if the flow of salary and position information to their actuaries were not limited by these arrangements. Furthermore implicit or de facto arrangements which restrict recruiting contact with the actuaries of a given organization, when entered into as a common practice by that employer (whether with recruiting firms or with other employers of actuaries), can only have the result (unintended or intended) of lowering the relative compensation levels and the number of career options of the actuaries at that company by directly eliminating some of the competition for their services. As a result such agreements are non-competitive by definition, and therefore harmful to the profession.

The fact that these types of agreements are generally deemed customary seems to be the result of a prevailing, yet for the most part unexamined, view of the recruiting process which incorrectly identifies and apportions the role of each of the four involved parties (candidate, current employer, prospective employer and recruiter). The reality is that recruiting firms do not “take” people out of companies or “put” people into companies. Rather, recruiters act as conduits of information. It is the individual as a prospective candidate who decides whether or not to act on the information, and it is the current employer or prospective employer that either successfully retains its people or attracts and hires new ones. Employers accomplish this by offering remuneration, prospects for advancement and work environments that are more attractive than those offered by the other options which life presents. A recruiter making a call to a prospective candidate can influence where a departing employee accepts a position and, within a small time frame, when a change in position is made, but not if the individual chooses to leave. That, to the extent that they have the ability to affect an individual’s choice, is the responsibility of the organizations competing for the services of the candidate.

Therefore in order to preserve the spirit of the above paragraphs, avoid confusion, and to allow us to more fully serve the profession as well as our clients (who themselves are often actuaries):

1. We will, of course, continue to honor all of our current agreements until the end of the term of the agreement. At that time we hope to be able to reach agreement on the wording of future agreements, which will be satisfactory to our clients and will maintain the integrity of our position as stated above.

2. We can enter into agreements that call for us not to initiate contact with actuaries, with whom we have not established a recruiter-candidate relationship. We feel that this limitation is reasonable in situations where it is important to avoid the perception that our relationship with the client company may have introduced us to actuaries with whom we otherwise wouldn’t be familiar.

3. We can no longer enter into recruiting agreements which restrict us from being of service to the actuaries who directly seek our services or with whom we have established a candidate-recruiter relationship.

We define a candidate-recruiter relationship as one in which we have been provided with a current resume, or when an individual has given us very specific ideas of types of positions or geographic opportunities of which they want to be made aware.

If you are interested in our search services, please
call D.W. Simpson &Company at 312-867-2300


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