The contract market has evolved considerably over the last few years thanks to Solvency II, as it was a fantastic opportunity for actuaries at all levels to capitalise on their experience. I have worked in the insurance market for the past 10 years sourcing both permanent and interim actuarial professionals. In this blog I am going to concentrate on the frequently asked questions, I find now, more than ever, I am asked about contract opportunities for Actuaries.
SHOULD I LEAVE MY JOB AND TAKE UP A CAREER IN CONTRACTING?
If I was to answer this question 3 years ago, I would have said yes! Regardless of the notice period you would have definitely secured a contract. This was when demand for Actuarial contractors was high, given the Solvency II deadline, but the supply was low. The market has now changed and the increase in contactors now means that there is more available resource than required. Even the majority of contractors who rode the wave back in the day have returned to permanent employment. Therefore if your notice period is more than 1 month, I would say there is no point in leaving a secure job to carve a future in contracting.
WHAT IS MY RATE?
This is an interesting question as your rate is a reflection of your technical experience. In a tough contract market, (i.e. the current market) in order to stay competitive you should always have a minimum and maximum rate that you are prepared to earn. You should not have a fixed rate or expect an increase in rate with every move. A contract rate is not like a permanent salary as you will not receive a pay increase as the rate of inflation rises or when you change jobs. It is important to understand that as a contractor you come at a premium, therefore the more flexible you can be, the better the chances you will have of securing yourself a contract. The length of contract should also be a consideration when determining your rate, with longer contracts offering greater sercurity. When the tide turns and the market softens then you will be in a better position to negotiate a more competitive rate.
WHAT KIND OF ROLES ARE AVAILABLE FOR CONTRACTORS?
While the majority of roles in recent years were due to the Solvency II deadline and although this is still the case, business as usual roles are also available. For example, interim resource is commonly required during the busy periods of month end, quarter end and for submission deadlines. This is in addition to cover for maternity leave, long term sickness and ahead of a permanent employee to be hired. Given the number of people in interim employment, clients are beginning to realise that paying a daily rate for a pre-determined period is considerably cheaper than paying a hourly rate to a consultancy.
LTD VERSUS FIXED TERM CONTRACT (FTC)
The majority of contractors prefer to operate via their own Ltd company on a daily rate rather than a FTC. The major difference between the two is that as a Ltd company the figure is often inflated, to reflect that you are taking a risk and do not have “permanent security”. It also accounts for pension, holidays and all the other benefits you would get as a permanent member of staff. On a FTC these benefits may be taken account of within a pro rata salary or you may be paid as a permanent employee with access to the same benefits for the duration of your contract.
Unfortunately, LTD company contractors steer clear of FTCs as they mess with their financial year and the continuity of their accounts. Therefore the people that are more likely to take up a FTC are permanent employees who are actively looking to move from their current company. I find these individuals are more willing to look at the role as an opportunity to gain experience working in the company for a short period and then decide if it is somewhere they would like to work permanently, should an opportunity arise. This reduces the risk factor for both candidate and client as there is no obligation to stay after the specified period.
Contract interviews will always be heavily weighted towards technical strengths and will be very specific to the client brief. I would always recommend having as many examples of your experience as possible to demonstrate your ability to fulfil the role. Aside from the technical skills, soft skills also play a part as you will be working alongside other teams and department members, so personality fit is incredibly important.
Hopefully I have given you some insight into the world of contracting, as well as answering the top interim questions.
In a nutshell, there will always be a market for interim Actuaries as the constant changes in regulation; deadlines; staff turnover; and need for specialist technical skills will always demand extra resource. To a certain extent, contracting is a much cheaper resource than using large consultancies and if you are reading this as a client then you are now spoilt for choice given the experience and talent that is out there!
If you have further questions please get in touch, as at HFG we have a wealth of experience and knowledge in all areas of recruitment across the insurance market.