RESOURCING ISSUES WITHIN THE PENSIONS MARKET

The mobility of labour within a sector is a strong indicator of the health and optimism of that sector. If people move jobs, it is because they believe there will be increased wealth as a result of the move, without sacrificing security. Companies will hire new staff when they believe business levels will justify the expenditure and are confident of the opportunities for increased revenue.

It has become a cliche to state that pensions are in crisis. A serious lack of public confidence and the rise of the property market are just two in a range of factors that has posed a serious threat to the industry. As a result, there has been much navel-gazing, attempts to continue profitability by focusing on cutting costs and a tone of introspection and pessimism. This has led to slow, rare mobility of labour within the pensions sector.

There are additional factors to consider - The Pensions Bill development, changing work patterns, the decline in defined benefit (DB) schemes, even issues of communications, following reviews of the government launch of stakeholder pensions.

The Pensions Bill, along with the onslaught of recent FSA legislation, has meant those within the pensions industry face increased scrutiny and a much tighter framework within which to operate. The introduction of Simplification in April 2006 will have a major impact on scheme design. There will be areas of additional work for not only consulting but also administration.

The development of work patterns away from traditional office hours, increased home working and the attractions of working freelance have meant identifying new markets for pensions products and services has become more difficult.

Combating the public lack of trust with improved communications and an improved profile is a long and slow process. This is made more difficult by the high profile of the property market which is depicted as offering faster, more dependable returns than a pension scheme.

There is, however, increasing evidence that the worst is over. Pensions deficits are decreasing (though they are still substantial), the property market is levelling off, and the financial services industry is developing new portfolios of products to handle different lifestyles.

All of which poses a potential problem for recruitment and personnel issues within the pensions market. All of the above issues - the alternative of property, lack of confidence and new working patterns have made the market for pensions staff very candidate driven.

High value property markets attract new entrants and graduates into areas such as mortgages instead of pensions, and a lack of confidence in pensions translates to a lack of entrants, because they are not confident of making the money traditionally offered by financial services.

Successful staff in any part of the financial services industry will always be in demand, but the market has been short of suitable, mobile candidates for some time now. The market has already taken initial steps to combat this, offering very competitive salaries and packages designed to shepherd candidates onto the fast track.

The role new members of staff will play in developing growth at many companies is crucial. The impact of FRS17 and whatever the unveiling of the Pensions Bill will bring, are both examples of new challenges that will need fresh thinking. Inside organisations, new models of variable costs, to be more responsive to market conditions, are challenging the foundations of pensions companies and, therefore, those who work within such organisations.

How can organisations best deal with this threat? The most effective strategy is to establish your company as an employer of choice among the few new entrants and those able and willing to move jobs. Given the close-knit nature of the industry, the most effective tactic in achieving this aim is firstly to improve retention and ensure you attract and keep the teams and individuals that deliver results. Secondly, this improvement and what it means for the professionals within your organisation needs to be communicated as effectively as possible to potential new members of staff.

Identifying, recruiting, rewarding and retaining the staff to develop the pensions industry is a specialised task demanding both an in-depth knowledge of the issues within pensions and focused application of human resources expertise. This is as true for senior pension management as it is for sourcing new entrants.

Identification can be assisted by modern methods such as online databases or websites designed to attract the less active job seeker. However, there is an increasing complement of more traditional approaches - monitoring the news for pensions redundancies resulting from outsourcing decisions, or word of mouth.

Retention is often financially motivated and therefore remuneration packages are key. Benefits packages can vary greatly and it is important to constantly review and develop the performance of pensions staff.

It is therefore important to identify pension recruitment specialists and engage them as early as possible to make your recruitment campaign as effective as possible. A national network, use of both advanced technology and traditional candidate attraction strategies and specialised consultants who focus on individual areas such as pensions are all key areas of competitive advantage to those seeking pensions staff.

Martin Delahoyde, Operations Director, Reed Insurance