Resource Management at APR – balancing supply and demand
Resource management, and balancing supply and demand relating to APR’s actuarial team, has been one of our biggest challenges in the past couple of years. Despite growing the size of our actuarial staff team from around 35 to over 60 in that period, there have been times in which we’ve found it difficult to meet client demand. In this short article, I discuss the challenges we’ve faced in resource management (which may well mirror some of those you face with your own teams), how we’ve looked to rise to those challenges and how we deal with the situation when resourcing risks crystallise.
Managing demand risk
Whatever the size of team, there is always the risk of client demand exceeding our available resources. Our approach to mitigating this risk has included:
- Almost doubling the size of our client-facing team over the past two years. This is easier said than done and has required us to scale our teams and processes responsible for Graduate FIA, CAA and Senior Associate hire – we provided some insights last month on how functionality within Office 365 can help to streamline the recruitment process. One of the successes of this period has been devolving nearly all recruitment decisions away from partners to other staff while simultaneously maintaining the quality of our staff and providing a better experience to candidates.
- Creating the right development pathways to ensure staff retention levels remain very high.
- Sharing knowledge and accelerating skills development of our staff so that a high proportion of staff can take on as wide a range of projects as possible. During the past year, we have implemented internal ‘Code Clinic’ sessions to encourage staff to actively participate in developing their skills in the solution of real-life problems, something which has helped us to satisfy the increasing number of roles requiring strong technology and coding skills.
- We’ve also adopted a deliberate strategy of keeping a good proportion of our staff working across more than one sector, such as Life and GI; this approach seems rare in the consulting world but as well as providing an attractive variety of work for our staff, it also maximises resource fungibility.
- As more of our work has turned from resourcing to consultancy in nature, availability is less binary than was previously the case, resulting in increasing pockets of part-time resource at different levels. On several projects, this has allowed us to overlay junior support with a small amount of review and quality oversight from more senior staff to provide good, cost-effective solutions to clients.
Managing supply risk
As implied above, the more significant issue for us in the past few years has been insufficient availability of resources. However, we’re not complacent against the reverse scenario. This has underpinned our measured, organic growth. 2013 was our toughest year since we founded APR, due to the significant delay to Solvency II implementation and the ongoing impact of the financial crisis. In retrospect, we see it as a positive as we demonstrated to both ourselves and our staff that the business is resilient in a downturn, and almost by necessity, made us accelerate our mitigations for when this risk next crystallises. Those mitigations include:
- Widening our client base and deepening our relationships with many clients.
- Diversification across sector and geography.
- Acquiring more predictable and recurring revenue by taking on long-term projects, or annually recurring pieces of work.
- Introducing the option for clients to pre-book capacity in certain situations.
Demand risk crystallising
Despite the actions outlined above, some risk remains as it is impossible to perfectly match supply and demand. A number of client managers reading this may have approached us and been informed that we don’t have the capacity to currently help them. This is never done lightly; a high proportion of our clients have worked with us almost continuously for a long time and it’s never easy to say we’re unable to provide a solution when such clients approach us for additional support.
Some principles that we apply when this arises:
- Existing vs new clients. We never adopt a systemic approach of prioritising new clients over existing ones.
- Empathy with our clients guides our tricky decisions. For example, we recently had a situation where we had to make a decision between extending at a smaller client or taking a new project at a more strategically important client and on more advantageous commercials. As the incumbent client had recently lost two members of its own staff in a very small team, we took the decision to extend as we felt the loss of the APR resource would be felt more acutely there. A narrow perspective of what’s best for APR may have taken us in the opposite direction. Such scenarios are rare, but we try to provide transparency around our decision-making to all parties.
- We often allow the staff member to have significant input into decisions such as whether to extend or take up a new project; this we believe is critical to our ongoing high staff retention rates. On many occasions, staff are happy to stay on especially if they can see exposure to different work or through wanting to see a major project through to completion. Occasionally, there can be a conflict between the individual’s preference and the common client view of wanting to hold onto a resource that now has valuable knowledge, but drawing on our experience, it is an issue on which we can usually find a solution which everyone considers fair.
- We sometimes bolster our staff resources through contractor resource. For certain roles, many of our clients have a clear preference for our staff. When proposing candidates who are contractors, we will make clear their engagement status and often also provide an indication of the depth of our working relationship with that individual, rather than seek to obfuscate or hide the nature of the relationship from the client.
- If proposing staff that we feel don’t have all of the key skills outlined by the client, we try to be clear on what the shortfall might be so that the client can make an informed decision on whether that is manageable for the piece of work. However, we have a good track record of placing our staff in areas in which clients were originally expecting to use a more senior resource. While specialist, deep knowledge is sometimes required, on many other occasions a high-quality but more junior resource can provide an effective solution at lower cost.
Quality is King
Whenever client demand exceeds capacity, there can be a temptation to loosen quality thresholds to meet demand. As most of our actuarial recruitment is at graduate level (an area in which we typically have 700 or more applicants each year), this is a tap that is relatively easy to turn off and on by changing the quality threshold. However, we have always resisted the temptation to treat quality as a recruitment lever. For example, we have never practiced quotas in terms of vacancies to fill – we would simply take fewer if we were unable to recruit enough resources of the required calibre. Our reputation, and the success of our business, has been built on the quality of our people and this is something on which we are not willing to compromise.
In summary, by continuing our growth and developments outlined above, we hope to further reduce the number of occasions where we cannot meet client demand. Ultimately, though, we have taken the view that it’s best for both us and our clients for us to occasionally be clear that we are unable to help, or can only provide a different form of solution, rather than take actions that could compromise valued long-standing relationships.