Sovereign and public pension funds often face a daunting human resources challenge: How do they fill public sector jobs with individuals who can compete in and with the private sector? I think it’s a fascinating question. And so I thought I’d flag up the types of employees that these investors (in my experience) are usually very capable at attracting:
- Green: Public funds are generally quite competitive in attracting young (i.e., green) talent. At this early stage, the disparity between the public sector salaries and the private sector salaries are lowest. Moreover, the opportunities for career development at a public fund are (in many cases) far superior to those in the private sector. As a CIO recently told me, he often pitches to young recruits by saying, “If you give me three years of your time, I’ll give you 20 years of experience.”
- Grey: Public funds also seem competitive in the war for older (i.e., grey) employees. Generally, these are individuals that have had successful careers on Wall Street. They’ve made their money and are now interested in giving back or just escaping the rat race.
- Grounded: Public funds are also, as you might expect, competitive at hiring people that are tied to the region (i.e., grounded) due to family, identity or affinity. Indeed, many employees at public funds are there because they want to stay close to relatives, give back to their country, or just be close to some great skiing or fishing (see Alaska).
In short, those are the individuals that I often see thriving at public funds. By implication, however, these sovereigns and pensions are quite poor at hiring the mid-career professionals who can earn high salaries in the private sector. So should they even try? Perhaps public funds should just accept this and focus their recruiting efforts on green and grey and work strategically to pick up the occasional grounded employee.
