The convergence of a number of mega trends – including changing workforce demographics, the demand for digital skills and increasingly competitive knowledge marketplaces – has brought talent management back to the higher echelons of executives’ agenda globally, and in the consulting industry it is no different. In order to stay ahead of the game, and come out on top of the ‘war for talent’, a robust talent management strategy is key.
According to a report from Oxford Economics, replacing staff costs UK businesses more than £4 billion per year. This cost is derived from two core components: the productivity cost (the cost of lost output while a new worker gets up to the standard expected of them) and the logistical cost (the cost of finding and absorbing a new worker; includes advertising, recruitment and onboarding). Across all industries, the loss of an employee earning £25,000 a year or more carries an average financial impact of £30,614, although the bottom-line cost varies substantially across three key variables – the sector in question, the size of the firm hiring a new employee, and the background of the worker being recruited.
More specifically for professional services, including the accounting and consulting sectors, the industry is estimated to lose between 3.5% to 4.0% of its total output on labour turnover. In light of the massive costs attached to attrition, and the rising competition for talent on the back of buoyant markets, it is becoming increasingly important for consulting firms to adapt their talent operations to the changing business landscape, says Neil Curry, Business Director at Deltek, a global service provider that provides ERP and talent management software to consultancies. “Effectively managing talent and avoiding the risk of losing staff to competitors is moving up the partner agenda,” Curry says. One way to do this is in his view to implement a robust talent management strategy.To help management and IT consultancies with winning the ‘war for talent’, Curry highlights five strategies that partners should consider:
Align your talent strategy with your business strategy
The first point looks at the ownership and accountability for talent strategy. “Don’t just leave the talent strategy with the HR department, discuss it at board level. If the talent strategy is intertwined with business operations it effortlessly provides a broad overview of your talent needs compared to your project planning, making it easier to select the right people for the right projects.” Taking this approach helps consulting firm’s speed up their response times, for instance, to meet new projects requirements or ramp up requests on existing engagements. It in addition it provides HR teams with a better forecast for when new hires are needed, allowing them to start recruiting before the resourcing request is urgent.
Several studies have in recent years shown that diversity is critical in enabling organisations to innovate and adapt to meet the changing demands of the market and individual clients. One study concluded that employees of diverse organisations are 75% more likely to see their innovative ideas brought to life, while other research by Grant Thornton, revealed that cultural diversity benefits strategy execution and governance. “The success of your firm depends on your people’s skills and ability to work together. The focus should be on building synergy by including different characters in your team with skills complementing each other,” comments Curry.
There is, however, more to diversity than gender and race. “We tend to forget about the different generations. There are currently three generations (Baby boomers, Generation X, and Millennials) working together. Each one brings its own mind-set, work habits and technology knowledge,” and as a result, consulting firms are advised to “make the most of it” by mixing skills, backgrounds and knowledge.
Communicate with your staff
Research by recruitment firms among consultants show that one of the main reasons in the consulting industry for leaving a firm– is the lack of (perceived) career growth opportunities. While such opportunities may be around, communication is key: “The best way to avoid losing staff is to keep them motivated and engaged. Open the lines of communication with your teams, and collaborate on project planning and upcoming activity. Additionally, give your team the chance to choose the projects they would like to work on rather than mandating activity.”
By making consultants feel included and appreciated, a sense of belonging will rise, which in turn will translate into increased loyalty and lower attrition. “Showing you understand their aspirations and equally their frustrations – will reinforce the connection between staff and the firm,” comments Curry.
Develop your people
Studies show that while companies spend time identifying potential leaders there is very little follow through in helping these future leaders grow. A lack of personal development opportunities is commonly cited as one of the top reasons why employees leave a firm. “Your performers are more likely to stay if they feel they are being developed and add value to your firm.”
In order to differentiate themselves, consultancies should take the time to identify and develop talent within your firm. “Internal promotions provide a clear signal to consultants that personal development can translate into career progression. Striking the right balance between growing talent from within the ranks instead of hiring externally should be considered as a KPI within a wider recruitment strategy,” recommends Curry.
To bridge the skills gaps for project requirements and internal activities (e.g. sales, project management, leadership), the use of long term development plans and engagement review plans is advised.
Make the most of your employee data
A recent IDC survey found 60% of consulting firms don’t have a talent management system. Yet, the authors found, in line with the technology-driven disruption taking place across industries, technology should also play a central role as an enabler when it comes to talent within the consulting sector. “A unified technology solution can help you get a handle on talent related data. You can have all the information you need on objectives, performance and training in one place to support decisions around who should be on your next projects.”
Besides bolstering resourcing, learning & development and skills development, a state of the art talent management system will also allow partners that manage operations to tap into the power of strategic workforce planning. “By implementing a data-led talent management approach, it will allow consultancies to forecast future needs and better prepare for future talent issues.”
Rethinking the talent management strategy will in summary deliver three key benefits to consulting firms, says Curry. “Firstly, by aligning operations and talent strategy you will be able to manage resources more effectively. Secondly, including your employees in project allocation decision making and ensuring development plans are in place will make staff feel more engaged in their role and the business. Finally, going through your company data and furthermore, understanding it, will ensure you are coherent in your strategy and assist in advanced planning for any recruitment needs.”
For more tips on building the right talent management strategy download the free e-book Talent Management for Dummies.