We all know that the ability to attract, hire, retain and inspire people is crucial to every organisation and no sector depends more on the quality of its people than professional services organisations (PSOs). But it’s difficult: hence the widely held conundrum that finding people is hard, keeping them is harder. The Great Resignation highlighted, underlined and placed exclamation marks after the point that loyalty to employers is rare today. The appropriate response: employers must therefore strive to understand motivations and triggers for engagement, job satisfaction and need for training, mentoring and career mobility. So far, so predictable, but here’s the stinger: how do you excel at a game that everybody knows is important and where everybody knows the rules and best tactics?
The latest annual figures* provides much food for thought for CHROs in an area where the annual “fully loaded” cost per consultant has gone up from US$122,00 in 2018 to US$129,000 in 2022 and where it takes 127 workdays (or over $150,000) to replace leavers, and then ramp up their replacements.
OK, with all of that in mind, let’s jump to the highlights:
Retention is settling down… a bit
Employee attrition was at its peak in 2021 but there are signs of a flattening out post-Covid. A 15 per cent rate in PSOs leaving is not great, but it is not bad given what has been going on in other sectors. And break down the numbers by geography and there is encouragement for European readers.
SPI asked about their greatest concerns pertaining to talent management and the whole recruit/retain double-pronged challenge on a scale of one to five, where one equals not very concerned. The APAC median score was 4.29 while the Americas scored 4.18 but the demographically European-led EMEA sector was relatively low at 4.10. This suggests that Europe may have a better grip on the hiring/keeping situation than counterparts elsewhere.
It is also backed up by a reasonable score when asked about managing remote workforces. Here, EMEA gave answers suggesting a far lower concern than the Americas (3.47 versus 4.28) and closely aligned to APAC (3.46).
As for resource utilisation, EMEA sat between its peers (4.13 versus 4.28 for the Americas and 3.95 for APAC.)
Staff want a quid pro quo
PSOs are turning to a cocktail of on-shore, near-shore and off-shore staffing models as the post-Covid shakedown continues to impact traditional service delivery models. This is only serving to increase pressure on customer-facing staff to pursue deep client relationships and, in return, those staff expect premium career planning, skills development programmes and flexible working options.
Training days are in double figures
For the first time in several years, guaranteed annual training days have increased to more than 10 days annually. This perhaps shows that the employee is gaining more clout, but it is a positive trend that should see more loyalty awarded to progressive PSOs.
Invest in HCM tech…
Smart companies, especially sizeable ones with over 700 staff, are using Human Capital Management (HCM) suites. Overall, over 70 per cent of those surveyed say they have adopted HCM solutions, up sharply over several years. Also, HCM benefits are boosted when suites integrate with core financials software to deliver higher per-consultant revenue, happier staff, strong billable utilisation and overall profit. Cloud-based applications are in and now represent a 10:1 ratio over installed software due to advantages such as access from anywhere.
… and other tech too
While PSO staff are working the same time (2,080 hours per year) they benefit from working smarter, using agile development, virtual consulting and multi-tasking across more than one project.
Identify why people quit and what to do about it
People leave (a) because they see a better opportunity elsewhere (b) for better money and (c) because of limited career development. But addressing work/life balance head on can act as a carrot for retention. Younger staff often focus on interesting challenges, great clients and exposure to cutting-edge technologies.
Layoffs can be tricky
Some PSOs will try to right-size via redundancies but voluntary attrition rises in parallel to involuntary attrition as people fear they may be next to be pointed to the door.
So, what do high-performance PSOs do that others don’t?
- First, they are heavily focused on their brand as employers, including making optimal use of technology to help reinvent their workplaces with knowledge-sharing, team building, transparency and collaboration at the heart of their cultures of continuous learning.
- High-performance organisations also invest in premium recruiting and on-boarding programmes that accelerate those processes. They also seek out high performers and then invest in their development.
- Some leaders offer rotational assignments that provide staff with valuable broad knowledge of technologies, clients and vertical sectors.
- Most leading companies have moved to a majority (about 70 per cent) virtual environment and many jumped before they were pushed by lockdowns. The result: lower facilities costs, lower attrition and high morale with in-person meetings and offsite retreats deployed to cement culture.
Realistically, PSOs will always be in a battle to find and keep the best people. By applying the lessons of their high performing peers, there are some clear actions that can optimise their hiring and retention prowess. Smart PSOs need to calibrate their practices against their competition in the talent marketplace and adjust accordingly.