Lately hiring managers are asking me some variation of the following question, “why is it so hard to find candidates right now?” It’s not as though hiring actuaries has ever been what you might call easy, but recently it does seem tougher than normal to attract and hire actuarial talent. Partnering with DW Simpson grants a considerable advantage in that we have the highest quality and most numerous candidate relationships in the business, but there are realities even we must contend with.
Read on to learn more about some of the trends we are seeing, our thinking on the causes, and what you can do as an employer to give yourself an advantage in the marketplace.
1. The Great Resignation
The Great Resignation may have ended, but we are still feeling the effects of the seismic upheaval in the job market that began in late 2020 and extended into 2022. Those were heady days for us here at DW Simpson, not just because we all suddenly found ourselves out of the office and separated out into our own homes, but because as we were making that adjustment, we found ourselves busier than we had been in over a decade. Active candidates and open jobs increased by orders of magnitude, and it is a great credit to everyone on the team that we were able to keep up and find a seat for all of our candidates.
The issue facing us today is that a lot of those candidates are still in that seat. Of course, I’m not only referring to the individuals we placed, but also to people across the industry. The Bureau of Labor Statistics recently released a report that said the average worker will hold their job for around 4 years. After an unprecedented number of candidates changed jobs from late 2020 into 2022, that means that many won’t be looking again until next year at the earliest, barring another earth-shattering event like Covid. The Department of Labor projects a 20% or more increase in growth for actuaries this decade, with about 2400 openings expected each year. This is borne out by the increasing number of calls we have been receiving from companies looking to hire their first actuary or to expand their departments. All of which is a long way of saying, supply is low and demand is high.
2. Work From Home v. Return to Office
At present, 54% of all the jobs we are actively engaged on offer the option for candidates to work from home full time, generally regardless of where they live in relation to the hiring company’s home office location. Many of the remaining jobs allow for some sort of hybrid working arrangement that allows for some work-from-home days every week. While we are seeing more employers who are asking their people to return to the office, the overwhelming preference of candidates is still to work from home. Moreover, willingness to relocate is perhaps at an all-time low.
The challenging part about all of this is that it effects your ability to attract talent, even if you are open to remote work. Certainly, a remote role will be much easier to fill because you can be open to a nationwide pool of candidates, but at the same time, you are competing against companies you might not have had to worry as much about in the past, because their offices were in another part of the country. Similarly, the story isn’t only about candidates not wanting to come into the office. Over the past 6 months we have seen more and more candidates who actually want to return, and some few who are even willing to relocate, but the quality of the job opportunity makes a big difference. Even if someone is local to you and is open to coming into the office, they could still have their head turned by a great career opportunity in another state if that employer is willing to hire them on a remote basis.
3. Changing Skill Requirements
As the insurance industry evolves and becomes more data-driven, the skills required for actuaries are also changing. In addition to the traditional skills in mathematics and finance, today’s actuaries need to be proficient in data analysis, programming, and data visualization tools. Although many in the profession have taken it upon themselves to learn these new skills, and many in the academic establishment have begun to recognize the need to train rising actuaries in them, there is still a bit of a lag. This is most evident among mid-career actuaries and even senior candidates who may not need to dig in and code, but who at least need a solid understanding of advanced model outputs and the ability to direct advanced analytics focused teams.
We are also witnessing the continued growth of the actuary as a key strategic voice within their organization, with leadership and communication skills increasing in importance. Whereas before these skills might not have become critical until the upper stages of one’s career, now more junior and mid-career actuaries are finding themselves with more outward facing responsibilities. Competition for these more business minded actuaries is high, as not all actuaries have had the opportunity to develop these skills as they progress through their careers.
4. Compensation Matters
Although compensation packages have not quite broken the averages we identified in last year’s salary survey, they are edging towards the top end of the range in many cases. We are also seeing more candidates who are looking for both short- and long-term incentives. They would like to feel rewarded and recognized for their day-to-day work, but at the same time they would like to feel like a company is making a long-term investment in them. Long-term incentives also increase an individual’s feeling of ownership and responsibility for the success and prosperity of an organization.
Beyond pure dollars and cents, as compensation for talent gets tighter, we are seeing things like PTO, the cost of health benefits, and the structure of actuarial exam programs become dealbreakers in a way we haven’t seen before.
What Can be Done?
Now that we’ve laid out some of the challenges, let’s have a look at what we can do to overcome them. The answer to each of the points above is really the same: flexibility. Any time the candidate pool is depleted, you need to try to do what you can to cast as wide a net as possible.
1. Flexibility with Job Requirements
Sure, there might be some cases where you really will need an FCAS with seven years of commercial lines reserving, three years of experience with direct reports, Python, Tableau, and excellent presentation skills, who can come into your office for four days a week and work for under $160,000 total compensation. If, however, you take a second look at what your organization really needs and find you can be flexible on any one of those points, then you should be.
The consequences of waiting longer for the perfect candidate must be weighed against the consequences of bringing in a good organizational fit who might not have all the experience, but who has shown themselves capable of growth.
2. Flexibility with Location
Can you make remote work, work? Perhaps with an arrangement for regular travel into the office for important meetings, or on a quarterly or even monthly basis? Few candidates will tell you they never want to set foot in your office, so it can benefit you to get creative and try to work out an arrangement that balances necessary face-time with the kind of flexibility most candidates are looking for these days.
What I tell clients in this situation is that it’s all a matter of time. It will take longer to find a quality candidate who is willing to relocate or return to the office, but it is by no means impossible. One just has to weigh the consequences of leaving a role unfilled versus making allowances for remote work.
3. Flexibility with Compensation
It’s always tough to find room to be flexible with pay, but in this market, you may find it unavoidable, especially if you’re unable to be flexible in other areas like background, skills, or location. The primary message here is that you can’t take the compensation figures you have spec’d out in the past as a given. There are plenty of justifiable reasons you might not be able to go over your target range, but you owe it to yourself to do some research, both external and internal, to make sure you’re as competitive as possible.
4. What Are You Offering in Terms of Personal and Professional Development?
This isn’t about being flexible per se, but in the face of all this competition, you need to ask yourself, what can you do to make your role stand out? Candidates need to see how taking your role is going to help them advance, not just from a financial or leadership standpoint, but also as an actuary. What opportunities can you create for personal and professional development? Is there an exciting growth story that you can tell them, and is there a key role you can offer them to take that story to the next level? Are you invested in innovation and technology? Can you give them the opportunity to work with new products, emerging technologies, or unique datasets? Is there a learning community for actuaries within your organization and a place for someone to collaborate and learn from their peers? Can you carve out leadership opportunities for candidates who are ready to take that next step?
These are the kinds of questions actuaries are asking of their current and prospective employers, and the more of them you can answer in a positive way, the better your chances will be of attracting top talent.
Why is it so hard to find candidates right now? Well, hopefully now you have a little bit more of an understanding of our perspective on the challenges we’re facing in the market, and some potential ways to make it easier. As always, we are here to be a resource for you, even if you’re not quite ready to partner with us on a search. Feel free to reach out to us to discuss how these different factors might come to play in your specific circumstances.
By: Clifton Frei
Director, Client Development