Promoting diverse career backgrounds in pensions

PP discovers how the pensions industry is progressing with career diversity

Jasmine Urquhart
clock • 13 min read
Industry attitudes to people with different career backgrounds is changing
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Industry attitudes to people with different career backgrounds is changing

There has been no shortage of blogs, consultations, trustee surveys and debates about diversity in recent months - and regulatory bodies, consultancies and master trusts are all focused on how trustee boards can become more reflective of people from different backgrounds.

The Pensions Regulator, a range of consultancies and pension schemes have been increasingly vocal on the benefits of diversity, and the conversation has prompted further interest in how best to improve scheme governance, trustee skills and even the link to member outcomes. But what about diversity of skills and background, and how can this contribute positively to the experience of staff in the industry?

Professional Pensions has spoken to a range of people in the pensions industry to understand how career diversity is changing, how to attract and retain future pensions professionals, and what the industry can focus on now.

What does research say?

It would be remiss to write a diversity article without mentioning the activities of NextGen. The industry body was co-founded and is now vice-chaired by Capita Pensions Solutions chief growth officer Matt Dodds in 2018, who came up with the idea after attending an annual industry gathering which left a lot to be desired in terms of inclusivity. NextGen started as a group of professionals "who felt similarly about lots of things".

Dodds started in the industry having initially attended university with the intention of becoming a PE teacher. He joined after coming across a fast-track programme at a pensions firm, where he learned the ropes of the industry. Having progressed through the industry with a 25-year career at firms including WTW, ITM and Mercer, he points out that he would have benefited from a group like NextGen when starting out.

"It can be intimidating as a younger or less established person going to conferences… you almost have a kind of inferiority complex or imposter syndrome. These days, diversity of thought is to be valued, and embraced." Even those who are doing well can be held back by an attitude of ‘this is the done thing', he says, but adds that networking has become easier when talking to people with similar lines of work, it is "situational" and depends on who you talk to. "Something like NextGen is a good way to have the common ground of ‘just be you', and not thinking everyone is an expert."

"The easy part is saying ‘diversity is important'… there is lots of education about trustee boards and diversity, [but] you can't just flip a switch. We are on a journey but there is a long way to go."

Dodds refers to NextGen's 2022 report on retention, which found mixed views among trustees on how best to recruit diverse talent.

Many noted they saw insufficient visibility of diversity initiatives and industry programmes. Some respondents said progress was "patchy" with focus on gender diversity, but "varying levels of commitment". Half (44%) said the industry is only diverse at some levels, and some noted that junior roles tend to be more diverse. Many said there should be more education and support to younger people to encourage them to aim for roles typically held by more experienced people. There was also appetite to make schemes' diversity strategies more transparent.

There was also concern about the diversity of senior roles in particular - with trustee boards more likely to be seen to have challenges in this regard. This was consistent with Pensions and Lifetime Savings Association research which found the majority (83%) of trustees were male, half were over the age of 50, and just 2.5% under the age of 30 years old.

Suggestions for building diversity came in the form of pre-recruitment activities, including designing the right culture and having diversity training. Onboarding, setting in and career progression should involve internal and external networks, and a progression plan tailored to the individual.

Has the industry changed its attitudes to careers?

Zedra trustee executive Lucy Kerley, who is also part of the NextGen research and insights subcommittee, says her experience of the industry so far has been encouraging, but has a long way to go with regards to attitudes to different backgrounds.

She joined the industry five years ago after studying journalism at college, before completing a business administration apprenticeship and progressing towards a role in trusteeship.

Kerley says feedback from the industry after talking openly about her experience of the industry has been positive, and adds diversity has increasingly become a topic of focus "over the last year or two". However, discussion often seems to happen among the same groups of people, and general attitudes towards career backgrounds does not seem to have moved forward in the time that she has worked. 

Quietroom development lead Joe Craig entered the industry with a successful career as a musician and songwriter under his belt. He has written 16 books, and has held numerous other roles including as a composer, consultant and ghostwriter. He became aware of the work that Quietroom does, which he says is "all about the power of the story you are telling, who you are talking to and why, and how you are going to keep people reading". He said that when he joined he "hadn't quite realised" he had entered the pensions industry.

His creative background finds good company at Quietroom, but Craig cites many examples of people within the industry who have other interests outside of pensions, including some who have a "fully-fledged music career" and others with established careers as authors. However, he points out he doesn't have a similar industry to compare his experience to, but adds when he talks to people in creative industries, they find it surprising to learn of the possibilities of pursuing certain projects within the industry.

Vidett trustee director Kate Leigh draws from her experience having spent time in several careers before venturing into trusteeship. Initially graduating with a French degree, she spent time teaching English on a French-speaking island, before completing a law conversion course and obtaining a training contract in a pensions department. Following this, she moved in-house and worked across governance and employer projects before joining Vidett (then 20-20 Trustees) two years ago.

She says the industry has been improving its diversity "compared to five or ten years ago", especially within the trustee world. "There are a lot of people going for it as a career path rather than a pre-retirement option. Traditionally, the industry was comprised mostly of actuarial backgrounds, but now more former lawyers and administrative backgrounds are coming, in which she says is a "helpful starting point".

"Being a trustee can [have] such broad knowledge and not everybody can be an expert in each field. At Vidett we have a very active team function, if someone has a query then we have specialist, covenant, legal, and admin people which allows us to pool thoughts and come back with answers and ideas sharing, and recognising that not everyone can be an expert in all of the different fields."

Benefits of diversity

Like others, Kerley is a keen advocate of the benefits of trustee board diversity, pointing out that age diversity can present challenges. "You want to avoid groupthink - you can have a mix of personalities as you can in any board. Some dominate and perhaps influence other people's decisions, and when you have a group who are similar and one person who is diverse, they may not always feel as empowered to speak."

Kerley adds it is often easier to disagree with a consensus if everyone is encouraged to have their own points of view, and refers to her own "personal discovery journey" earlier on in her career. She had joined a committee as one of the only young, non-degree educated professionals and had initially felt "underqualified" in some settings. At the start of her career, Kerley was not familiar with the term ‘diversity' and says it took a while to learn that it was acceptable, even encouraged to disagree and voice opinions with colleagues. "It took me a while to learn that differences are valuable", she said, but points out this is hard to do in practice.

Vidett business development specialist Donray Rae, who joined the industry two years ago after receiving multiple university and job offers, chose the role as it fit more with his aspirations. He agrees on the importance of age diversity: "I think young people are the future leaders of the world and the industry - everyone has a different perspective and are from different backgrounds and have seen life from a different view, so you don't want to have one generalised approach." He says including young people in pensions conversations can both educate them and promote interest in a career, pointing out while this "doesn't fall on pensions", knowing more about the industry beforehand could encourage more people to venture into a career.

Craig says pensions "as a whole lags behind in terms of aspiration, creativity and expectations of what we should be delivering", especially regarding member experience and outcomes, and use of technology as a solution.

He says: "What I see is lots of people who are aligned in terms of wanting to give people the best member outcomes, but there is understandably a lot of aversion to risk. It is a highly regulated industry… but at the same time there is so much more we could be doing that perhaps requires a more creative approach - just because there is lots of regulation doesn't mean we shouldn't be trying something in a different way that is just as compliant."

Craig adds that having enough time to invest creative effort into new solutions is one possible issue for the industry, but points out change doesn't have to be about "suddenly throwing out all the regulations", and instead can be getting around smaller obstacles. He stresses the importance of having enough resources to change things: "You don't want to get into a situation where you are just passing the buck, there is so much that can be done in teams, sometimes across different organisations, which is great because it makes it a collaborative industry. [However], sometimes you run the risk of sticking to safe zones a little bit and hoping someone else will make the leap, which is a really hard thing to ask people to do in any industry, even creative ones."

Recruitment and retention

Rae became part of the industry comparatively young, and says when he joined, he was quickly surprised at how interesting it turned out to be, despite not being familiar with the intricacies of pensions. He says "no two days are the same" in pensions, but says the industry has difficult "broadcasting itself" as well as it should in order to attract the next generation.

"People tend to fall in love with the more exciting industry they hear more about, whether it be technology or the finance sector, because those are the ones that are broadcasted a lot more than pensions. I think pensions is starting to get more diverse, and starting to involve people with different backgrounds and skillsets as well as investing more in the younger generation."

However, more thought is needed around ways to attract a new generation to the industry, as they may not have a full understanding about what it does, or the ways they can get involved. That said, young people are "becoming more vocal about ESG and climate change" and are engaging in issues related to finance, meaning the industry could use this as an opportunity to communicate the benefits of working in pensions, Rae says.

The issue of recruiting and retaining the next generation of pensions professionals could start with current attitudes about careers within the industry, Dodds says. In particular, talking about careers using terms such as "falling into pensions" can be unhelpful dealing with the misconception that pensions is a ‘boring' career choice. At worse, it could even promote feelings of embarrassment about working within the industry. Part of helping with the image can be through engaging in small conversations with colleagues and "chipping away at the fact that people have no idea what it is".

"It can get very technical but it doesn't have to be - we want young talented people who communicate well to paint a different picture", Dodds says. He agrees with Rae that engaging with those in the earlier stages of their career about the wider benefits it can have in terms of sustainability can also improve perceptions.

Leigh, who volunteers with NextGen, says mentoring is an important way to improve retention. As part of the programme, the trustee director has been using her experience and industry know-how to engage with those at an earlier stage in their career, shedding light on essential skills such as career progression and how to navigate the workplace

"It is useful to have an independent person to bounce ideas off of", she says adding mentoring has tangibly improved people's careers. "When you are in the middle of something you can't always see all of the way through it, but if you have an objective mentor to bounce ideas off of, I think it can really help and gives you the confidence to take things forward with someone on your side helping you."

Additionally, there could be more of an opportunity to make the most of recruitment by promoting the industry at universities and schools. "Pensions is interesting and varied, and there is lots of different things you can do within the industry, so I think it would be worth promoting it more at schools and universities." However, it is also worth noting the value that people on "second and third careers" can bring, with varied experiences across teamwork, relationship-building as well as technical skills vital to the industry.

Kerley agrees with Leigh on the role schools can play in encouraging interest in a pensions career, adding the industry itself could do more in terms of outreach. "Trying to entice [students] into the industry, and not just falling in" is important. At her company, retention is good, adding: "The more people you have that are like you, the more likely you are to feel included and want to stay."

Craig says pensions "could be a really dynamic and future-focused industry, it just needs some gears to shift and move on a little bit, and [having] new ideas and recruiting more widely and diversely is a huge part of that".

"It is also comes out of that bigger shift the industry has had to go through in this country from defined benefit to defined contribution, you need a shift of mindset. Combined with auto-enrolment and new people coming in [to pension saving], we need to be open to fresh ideas and to be looking more broadly about what sort of background leads to excellence in pensions. For example, we have lots of fantastic conversations with actuaries, lawyers and consultants, but we also talk to user experience experts, designers, behavioural scientists and people from backgrounds or with expertise that pensions needs to take on if it is going to move forward and create a better experience and outcome for members."

Even job adverts, which sometimes fail to attract a variety of candidates even with the best intentions, can play a part in moving the dial for some roles. While many pensions roles require a certain set of qualifications, it is possible to consider other attributes within job descriptions, such as personal characteristics and qualities, he says.

"If you ask for specific qualifications it hugely narrows the field and cuts out lots of talent, and you will have the same old sorts of ideas. But if you are open to having people, for example, with great curiosity, ingenuity and problem solving, and a passion for finding solutions in innovative ways, that suddenly opens up the conversation to different people and brings in new ideas."

Read more:

TPR: Trustee diversity integral for good outcomes

TPR stresses it is a 'diverse and inclusive' organisation

Industry coalition launches workforce directors guidance

Chintan Gandhi: Embracing diversity in pensions

Jasmine Urquhart
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Jasmine Urquhart

Senior Correspondent at Professional Pensions

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