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What’s the secret to high-performance in PSOs?

Mark Gibbison, Head of Strategic Motions for New Business - Unit4

It has become a cliché to say that people are an organization’s most important asset but it remains true nonetheless. People provide the intellectual capital, the ‘can do’ spirit, the brand and culture, the innovation and ideation. Yet, they are often left underserved and taken for granted with little regard for how they wish to be treated and what can be done to get the most out of them in fulfilling, mutually beneficial roles for employer and employee. SPI Research’s 2022 Benchmark report suggests that for professional services organizations (PSOs) talent remains the central issue. As the ultimate people businesses, there is a clear correlation between attracting, hiring, retaining and motivating talent, and optimal results from an engaged, loyal workforce.

Providing a great employee experience is critical, and this is especially the case in an age where ‘a job for life’ is rarely prized and there are high levels of mobility between firms. It has also come more sharply into focus thanks to changes in how PSOs operate, with their modern cocktail of onshore, nearshore and off-shore staffing models that accentuate the need for customer-facing staff to foster client relationships and meet or surpass requirements. Quite rightly, consultants today want a lot: career planning, skills development, flexible work options and compensation rewards. These changes mean there is a need to double-down on how consulting firms identify talent, attract top candidates to join, on-board them, offer continuous learning opportunities, provide attractive compensation packages and exciting career tracks.

And of course, people being people, we need to be attuned to individual needs. Not every consultant will want a tour of duty around the organization or around the world. Even in a world where emotional quotients are analyzed and T-shaped and E-shaped people are at a premium, there remains room for specialists who plough their furrow and are content to build domain expertise over years and decades.

In this context, how is your company performing? Think of the following baseline levels identified by Service Performance Insight (SPI) in its 2022 Professional Services Maturity Benchmark Survey and consider which of the five buckets your PSO falls into:

Level 1. You hire as needed and rely on individual heroics. You tend to favor ‘jacks of all trades’ who selflessly turn their hands to multiple tasks, for example combining presales with project management and consulting delivery.

Level 2. You have a workload capacity planning system and you have some sort of mechanism for matching compensation packages with roles. You have rudimentary career planning paths and you have started to measure employee satisfaction.

Level 3. You have established programs for career planning, training, resourcing and access to skills. You also have aligned goals and measurements with compensation packages, helping you reach an attrition rate of under 15%.

Level 4. You have good access to business process and vertical skills as well as technical and project skills. Your career planning, training and mentoring programs show your investment in people and have yielded low attrition rates alongside positive indicators of employee satisfaction.

Level 5. You are relentless in hiring people with skills and you are coaching the workforce to meet and anticipate market needs. You have a sophisticated blend of onshore and offshore workforce models, and you tap into outsourcing for commodity skills or to meet demand peaks.

Wherever you sit on the maturity curve, to stay competitive you should constantly be examining how to make your brand stronger with employees of today and tomorrow. Technology is your friend here, helping you to reimagine the workplace based on knowledge-sharing, team building, continuous learning, transparency and collaboration. In a globalizing economy and a world where hybrid working is common, investing in a virtual workforce and using tools to ensure that out of sight does not equate to out of mind will be key. SPI research suggests that high-performing PSOs have high-quality recruiting and on-boarding programs that translate into fast recruiting and ramp times as well as higher billable utilization. Indeed, the most advanced PSOs have over 79% employee billing utilization versus 65.5% for laggards.

High performers (level 4s and 5s) hire the best people, then invest in them and set high expectations in return. Some offer rotational assignments so their people are regularly learning about technologies and clients and are more likely to stay. Even when forced by the pandemic to move to remote working, high performers use their virtual resources to foster a spirit of collaboration and adventure, while back in the face-to-face world they create events that bind people in the form of company retreats and team-building sessions.

But even high performers suffer from attrition and the events of the last couple of years have seen a spike in departures, both voluntary and involuntary. We need to perform ongoing forensic analysis of the situation because as SPI notes: “In 2020 the pandemic limited the ability of employees to seek new opportunities but 2021 brought an avalanche of resignations.” In the wake of the Great Resignation, we still don’t know how attitudes to working have changed and whether there has been a permanent shift that impacts everything. But we do know that employee burnout and breakdowns in culture caused by lack of interaction are reality. And, again thanks to SPI, we know that high performers that get the fundamentals of hiring, onboarding and culture right bill an average 200 hours per year per consultant more than the rest and take just 47 days for new hires to become productive.

Leading firms are supplementing their already strong virtual tools and creating loyalty through culture but also by offering flexible hours and family-friendly offers. In effect, we can say that those PSOs that go the extra mile to support and nurture people create a continuum that creates benefits at every turn. In an ultra-competitive sector, coaching and culture, backed by technology, can literally be the difference between success and mere survival.

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