By Steve Stubbings and Actuarial Team
The Emerald Group
 The Actuarial contract market has always had a steady flow of roles, however due to the 2012 Solvency II directive the market has seen an incredible boom. Insurance experts predict that each insurance company will require up to 20 contractors due to the new legislation. As such we have seen a massive influx of permanent candidates exploring the much more lucrative and flexible contract market. Contracting Actuaries will play a key part in implementing the Solvency II directive and our Clients are aware hiring contractors is a necessary part of the process.
Many Insurance Companies started to arrange the implementation and compliance of Solvency II and plan their recruitment needs well in advance, conversely some companies adopted a more ‘wait and see’ policy. At the time this was seen by some as the best approach due to the uncertainty around the introduction of Solvency II. Insurance companies soon realised that failing to meet the required changes would be financially devastating.
It has been since late 2009, early 2010 that we have seen the contracting job market trend change in the direction of Solvency II recruitment, rather than just pure business as usual opportunities. The three pillars of the Solvency II legislation has very much mirrored the number and type of jobs that we have seen from our Clients, for example the three pillars of Solvency II each require different skills and expertise leading to a steady intake of Actuaries from our Clients. Recruitment has been at all levels of candidate from junior and part-qualified candidates to deal with documentation and financial reporting roles, right through to qualified Actuaries and even Project Managers to oversee the key stages of Solvency II implementation.
For many Actuaries the thought of leaving permanent employment for a position with no guarantees is something that requires much thought before making the transition and quite rightly so. Contrary to popular belief and in our experience the Actuaries we work with are not risk adverse but savvy candidates who are happy to explore what might be deemed by some as “risky business”. These concerns are understandable; recruitment consultants are well aware that any permanent candidate making the switch to contracting will have questions and will be well prepared to answer any queries from candidates.
For many candidates the main concern is their career path, wrongly believing that by undertaking a contract role it will affect their chances of returning to permanent employment. From our experience this couldn’t be further from the truth, a contractor’s role is very similar to that of a consultant; many of our clients offer flexibility to our contractors to join on a rotational basis therefore offering a greater deal of exposure and adding invaluable expertise to their CV.
Many common questions and concerns revolve around the contract market after Solvency II is fully implemented; we are regularly asked questions such as “Will the contract market slow down after Solvency II?’ ‘Will I still be able to command the same rates in a business as usual position?’ ‘Will there be a role for me after Solvency II?’ We have already seen many phases of the contract market over the last decade and he believes there will always be new legislation that will come into force to keep the contract market flowing. The Pensions Review required large amounts of contractors back in the late 90’s, shortly followed by the Mortgage Endowment Policy Review, these combined with business as usual opportunities has kept contractors in steady employment.
We always encourage our Candidates to have a flexible approach to the rates they charge, Solvency II has allowed contractors to command premium rates due to high demand and lack of experienced candidates to compete with. The Emerald Group feels that in the last 6 months contract rates have reached a very high peak and will continue at a relatively stable level.
In terms of flexibility we would encourage candidate to look further a field than just local opportunities. Whilst a candidate may be able to secure their first contract role within a half an hour commute it is not always that easy to find something suitable and at an attractive rate close to home and they may not be that lucky with their next contract role. Unlike the permanent market where London opportunities are offered with London weighting, London contract roles tend to pay lower rates than locations such as Surrey and Birmingham. Many contractors will prefer the security of a long tem contract, however the benefit of undertaking a shorter term contract role is that we will be able to negotiate a rate increase on your behalf should the client wish to extend your contract. It is very common for our clients to extend contractors if their work is of a suitable standard, the majority of contractors are offered the option to extend and will accept.
As with any permanent job search an important discussion we will always have when speaking to a candidate for the first time will be exclusivity and the ways in which the candidate plans to search for a contract position. Many candidates that are working with more than one recruiter will find that they are not keeping track of where their CV is being sent, this can lead to duplication and rate confusion. It does not look good from a client’s perspective if a candidates CV is submitted at different rates from different agencies. The Emerald Group would never send a CV without the candidate’s permission and without discussing rates for each individual role and location.
We understand that most senior qualified candidates have a three month notice period. This is not something that should put anyone off from applying for a contract role; permanent roles are not the only option. Due to changes in the market and the variety of contractors needed, many of our clients are aware that they may need to wait for the more senior candidates to work through their notice period and are more than prepared to do so.
The recruitment process is much slicker in the world of contracting; a process that would normally take on average a month can be tied up within a matter of days. It is general practice for clients to request a telephone interview; sometimes this can be followed by a face to face if necessary, to enable candidates to see working environments and for clients to get to know the candidate better. This happens regularly when there is more than one role that the candidate is being considered for. Offers are generally made within 24 hours of interview and unlike permanent employment offers clients would usually expect a decision to be made within a couple of days.
Once your contract role is secured, you have two routes to consider, either setting up limited company or going via an umbrella company. Both routes have their pros and cons and it is up to each individual contractor to choose what option works best for their personal circumstances. The main attraction of setting up a limited company is the financial benefits resulting in a higher take home amount due to its tax efficiency. Candidates that decide to work via an umbrella company lose approximately 8-10% of their take home pay. Limited companies come with their drawbacks; this would include more administration on the contractor’s part, whereas an umbrella company will deal with all of the paper work for you. We also find that candidates who are completing short term contract roles will prefer the umbrella company route.
In conclusion the contracting market has been very buoyant for the last two years and the implementation of Solvency II has only added to this. With new legislation always being introduced it is very likely to continue. There are many benefits of taking the leap into a contract role. Financial rewards are the obvious benefit; contractors can often triple their income. Flexibility, contractors can often work 4 days weeks or if preferred 5 in 4 days leaving more time to spend with family, pursue leisure activities or even study for exams. The other main benefit is that of skills development, contracts vary enormously from modeling to financial reporting allowing contractors to improve and become experts in that field.
|
