2. Securing talent
‘People strategy’ has never been more important for the consulting industry. Business owners are facing the challenge of simultaneously increasing agility and flexibility – in line with changing client demands – while building suitable retention and incentivisation structures to attract talent and prepare for succession.
This is leading many firms to cast aside the traditional 9-5 working model, driven by the ‘always-on’ nature of professional services work in a globalised economy and the proliferation of personal mobile technology enabling work to be undertaken anywhere and at any time. Consulting firms, most of which are trading on the insight and expertise of their individual consultants and teams, are in a battle to secure the best and brightest and for many this means providing a large degree of autonomy to facilitate positive work-life balance.
"The instinct for many businesses is that incentivisation is all about money – share schemes, bonuses etc – but today’s worker is far more complex than that."
The rise of the millennial worker has brought this firmly into the spotlight. For example, a survey by global real estate consultancy CBRE found that 70% of millennials would make some form of trade off - including potentially earnings reductions - for an improved workplace. In our own teams at BDO, for instance, we find that team culture, including manager relationships and personal development, is a primary concern.
With millennials projected to make up 75% of the global workforce by 2025 it is a demographic which cannot be ignored. But, more generally, socio-economic headwinds - from the cost of housing in prime urban / economic centres to the disruption of the traditional single-earner household - are pushing businesses to adopt greater flexibility and, in line with the desire for greater focus on training and positive at-work relationships, transition senior team members from being delegators to mentors.
The challenge of this latter element is an acute one.
In large consulting firms, there is an acknowledgement that much of the value creation is tied up with senior individuals who are correspondingly highly pressured and time poor, with limited capacity to focus on training and mentoring. Technology, including innovations such as Robotic Process Automation (RPA), may help ease this dilemma if high volume, lower value work is able to be automated or accelerated. This has the potential to free up both the demands on junior team members and the corresponding coaching demands on senior team members.
Managing an agile workforce
Increasing flexibility and individual autonomy does though bring its own risks.
The consulting industry has traditionally relied on associates and freelancers and, with the primary ‘product’ being intellectual capital, has always had a variable cost level with fixed costs kept to a minimum. It is therefore well placed to seize on the opportunities presented by the growth of the so-called gig economy while also using technology to create networks of virtual teams capable of advising clients around the world.
However, with an increasingly disparate workforce comes the issue of sustaining productivity, maintaining company culture (and wellbeing), while ensuring effective information sharing and data security.
Culture becomes a greater issue when consulting firms are scaling up; there is a tipping point at which stage hiring internal teams becomes more cost effective than utilising external resources, such as contractors. Internal teams, and client demand, still require flexibility but the issue of company culture becomes far more of an imperative when dealing with permanently employed individuals.
To a large extent, this comes down to ownership and responsibility, which consulting firms can in some cases engender through their corporate structures.
While employee ownership has seen its popularity accelerate in some segments of the professions, including law and architecture, it has yet to take a firm grip on consulting. For some businesses, particularly those which are entrepreneurially-led and which are seeking to de-risk realising value through employee ownership may make financial as well as cultural sense.
The traditional partnership model, though, still looks likely to play a significant role in the future of consulting with its built in ‘business owner’ approach and clear ladder of progression.
Fundamentally, consulting remains a people business. Firms (and clients) are reliant on the skills and expertise of consultants and the independent, external perspectives that are brought in to advise businesses on their organisational issues. The success of consultancy businesses in the future will be driven by their approach to attracting and retaining the best talent. But, critically, this will require careful balancing with appropriate investment in technology and technological expertise, with firms seeking to both ensure technological innovation is embedded and effectively deployed, as well as establishing the requisite skill base to service the technology-driven requirements of clients (see Harnessing technology).