NPS aims to lure young talent with enticing package, programs

The National Pension Service has offered an attractive on-the-job training package, including education programs to aid new hires in getting an MBA degree or seeking a professional license -- alongside a job listing last week advertising openings for 54 investment managers.

The hiring plan, if realized, will mark the single largest recruitment by the world's third-largest pension scheme and follow its fewer-than-expected, new 20 hires in January of this year.

NPS' unprecedented, three-stage training package is seen as part of an effort to overcome its geographical location and strict pay structure, the two main factors behind continuous employee outflow since its 2017 relocation to the city of Jeonju, about a three-hour drive from Seoul.

"Fly high," the job posting's headline reads, followed by the sentence: "We will provide every support in the pursuit of your dream and your future as a global asset management expert."

The training package, dubbed as the NPS WING's Program, is short for becoming a "World-class Investor to jump into New Growth." It also includes an opportunity to work at a foreign investment institution, or an NPS office in New York, London or Singapore. 

The WING Program consists of three-stage subprograms. First, on-the-job training and job rotation between the NPS' divisions at its headquarters, as well as an apprentice program. Second, new hires will be provided with commissioned professional education to earn either an MBA degree or a professional license such as a CFA, FRM, CAIA or AICPA qualification, followed by a training opportunity at a global investment company or bank in a strategic alliance or partnership with the NPS.

Third, they will be deployed to a global investment institution in connection with the NPS, or an NPS overseas office.

NPS will receive applications by May 7  and finalize the hiring by the end of June.

FUNDAMENTAL PROBLEMS

The training programs signal the difficulties the NPS has in finding good talent. The pace of its employment growth has been far slower than the growth of its assets, which surged by 25% over the past three years. 

"The NPS, on course to top 1,000 trillion won ($900 billion) in assets soon, has been shunned by market veterans, despite its rising demand for new investments such as overseas alternatives, which require a more sophisticated approach," an ex-NPS investment manager told Market Insight, the capital news outlet of The Korea Economic Daily. "NPS has left some positions empty because its applicants fell short of expectations."

Previously, the $750 billion pension fund had hired new investment managers on two or three occasions every year. Since it moved to Jeonju in 2017, it has never filled its employment quota of 250-300. Between 2016 and early this year, a total of 130 investment staff quit their jobs at the NPS. Considering its turnover, some 20% of its investment managers have been replaced with new hires every year.

Experienced managers are reluctant to relocate down to Jeonju because of their children's education and the NPS' non-competitive pay package compared to private sector companies. From 2019, the NPS began to hire junior investment staff with only one or two years of experience for the positions previously filled by those with at least three years of experience.

Asset management industry sources said that the NPS is trying to attract up-and-coming talent with the carrot of overseas working, which cannot be a fundamental solution to its chronic manpower shortage.

"NPS' hiring difficulty is due to two reasons: "It is not located in Seoul and it pays low salaries," said a private equity firm head. "Unless it solves these problems, it will not see any progress in hiring talent." 

Under the current NPS pay structure, outperforming investment managers cannot be compensated enough, because its spending is controlled by the finance ministry. That compares with the Canada Pension Plan Investment Board (CPPIB) and the Dutch pension fund ABP, which were allowed to run independently from 1997 and 2008, respectively.

In 2018, the South Korean government set up a committee composed of academics and industry experts to address the NPS employee outflows. They then proposed the pension scheme open a Seoul office to reduce turnover.

But the proposal was rejected by then-NPS Chairman Kim Sung-joo, who had pushed for the relocation of NPS' investment management’s headquarters to Jeonju during his 2012-2016 term in parliament. Kim quit in 2020 to run in a general election and was re-elected in his district in Jeonju.
 
Write to Jung-hwan Hwang at jung@hankyung.com
Yeonhee Kim edited this article.