Select Committee on Treasury Minutes of Evidence


Annex

GAD ACTUARIAL STAFF: TURNOVER AND RETENTION

  1.  During the course of my oral evidence to the Committee on 8 February, I was asked to provide a note on GAD's recruitment and retention of actuarial staff.

  2.  Below is a table setting out the number of actuarial staff in post, the associated turnover rate for the year in question and a comparison of GAD's turnover with the aggregate figures for all the actuarial employers who participate in the Annual Survey carried out by Remuneration Economics.

  3.  Excluding the Department's senior staff—where the turnover rate has been a little lower—the turnover rates for both qualified and trainee actuaries over the last four years have ranged from 10 per cent to 21 per cent of the average staff in post (about 45), which compares to a range of 7.5 per cent to 10 per cent annual turnover reported by private sector employers. If senior actuarial staff are included then the range drops slightly to 10 per cent and 18 per cent, but most of the relevant private sector comparators to these senior grades are excluded from the Survey.

  4.  The turnover rates are high because GAD has to compete with private firms in a recruitment market that is continually tight. There is a shortage of actuaries for the profession as a whole, and pressures on the insurance industry to complete the pensions mis-selling work, as well as a huge demand for work in respect of the occupational pension schemes, has made qualified actuaries highly marketable and valued members of staff.

  5.  Our staff are always in demand from the private sector, which often use employment "head hunters" to recruit from GAD, even at quite junior actuarial trainee levels. Among the key attractions in the recruitment packages on offer outside are the higher salaries on offer. As a public sector employer, GAD does not expect to be able to match private sector actuarial salaries or fringe benefits. However, GAD has been able to take advantage of flexibilities in pay to offer reasonable salaries for recruitment purposes and flexibilities in grading to ensure that existing staff get proper recognition for enhanced responsibility and proven consulting skills.

  6.  Notwithstanding the general market position, persistence in recruitment efforts has enabled GAD to maintain and slightly increase the numbers of qualified actuarial staff over the past 10 years, and to increase substantially the number of actuarial trainees. The total number of actuarial staff, both trainee and qualified, now stands at 69 compared with 55 in 1996-97. That this has been possible is a reflection, I believe, of GAD's unique position as a public sector actuarial employer—and the high regard with which it is held in the actuarial profession both in the UK and internationally. Many people still choose to join GAD, for a time at least, because of the interesting work carried out and because of GAD's professional ethos and reputation.

STAFF TURNOVER RATE FOR ACTUARIES AND TRAINEE ACTUARIES: COMPARISON BETWEEN GAD AND ALL ACTURIAL EMPLOYERS

(% of average staff in post who resigned during year)


Year
Acturial Staff in Post
QualTrain
GAD Turnover (1) %
GAD Turnover (2) %
All Acturial Employers Turnover (3) %

1996-97
37
17
16.3
12.7
9.8
1997-98
37
17
21.4
18.5
9.4
1998-99
36.5
20
15.7
14.2
7.7
1999-2000
39.5
21
10.3
9.9
7.5

Average in post: 56.5 including senior staff

NOTES

  1.  Based on monthly average of staff in post in GAD Qualified Actuary and Trainee Actuary grades—excluding senior grades.

  2.  Includes all GAD professional staff.

  3.  Source: Salary Survey of "employed" Actuaries and Acturial Students 2000—Remuneration Economics. (Excludes partners and fee earning self-employed actuaries).



 
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