The idea of a “war for talent” has been around for a long time and was itself based on the classic law of supply and demand popularised more than 200 years ago by the economist Adam Smith. It describes how, all else being equal, the price of goods or services tends to increase when the supply of that commodity decreases (making it rarer) or when the demand for it increases (making it more sought after) and vice versa. In the case of the talent war, the commodity is people.
Despite the pandemic, professional services has proven to be a growth industry. The MCA Industry Report 2021 suggests that the growth rate for management consulting in the UK was 4.5% in 2020. Total consulting income is estimated to be £12.5 billion. Some individual firms reported even more impressive results. Deloitte saw an increase in global revenue of 5.5%, while EY boosted revenue by 7.3% to $40 billion globally. Much of that growth has been centred around expansion into new service lines in particular those focusing on technology, data and ESG.
This drive for growth has led firms to fight it out for the top talent, which in turn has driven up salaries. Newly qualified lawyers can now expect a starting salary of £100k+, while partners in some Big 4 firms have seen their pay increase to in excess of £1million. In this febrile market employees have the advantage. They know that they are sought after and, in many cases, they are able to name their terms.
The risks to employers are many. In the race to recruit, there is a danger that corners are cut in order to be the first to make the candidate an offer. In Professional Services, experienced hires tend to be recruited with an expectation that they will contribute to the revenue growth of the firm. Given that they also need to exhibit deep subject matter expertise in their specialist area, and will often need to be effective people leaders, there is a requirement for individuals to draw upon a broad range of capabilities if they are to excel in their roles.
Recruiting the right talent
To prevent a severe case of buyer’s remorse, it is critical that firms maintain a rigorous approach to recruitment that is able to assess all aspects of a candidate’s performance and potential. It may be tempting to circumvent the process in order bring people in more quickly but consider the impact of getting it wrong. Direct costs are estimated by the US Department of Labour to be 30% of salary. But factor in the indirect costs such as loss of opportunities not converted, impact upon team morale and performance, and these costs quickly escalate.
To be able to accurately evaluate these different skillsets is challenging and requires a multi-faceted approach to recruitment. Robust psychometric tools used in conjunction with in-depth profiling / debrief sessions facilitated by an expert help to “lift the hood” and consider the capabilities and attributes that are not apparent from an interview alone.
What we see time and again when working with Professional Services firms is a tendency to focus on technical and leadership capability alone. If a new hire has a sales / growth target it is also critical to assess B2B sales capability. Research tells us that in order to make the best recruitment decisions we should:
- Clearly identify the criteria associated with success in the role
- Use trained and skilled interviewers
- Use structured interviews and objective assessment tools
Cutting corners introduces bias and poor decisions, in turn bringing too much risk for firms.
Retaining Talent: What Does The Evidence Tell Us?
So, what can managers within professional services firms do to retain their existing talent to support their goals around sustainable growth?
Robust research from pre-pandemic times suggests the following recommendations:
- Ensure that you offer employees autonomy and involvement in decision-making
- Deliver on your promises and treat people fairly
- Create a positive team atmosphere
- Provide clarity of expectations
- Provide feedback
- Seek to offer rewards beyond just pay: benefits, training and career growth are all important.
Considering how to support and retain more diverse groups of employees is also key to the sustainable success of the business.
Sarah Clapperton is a Director at Bloojam Consulting and a Chartered Business Psychologist, with 20 years’ experience working in selection and development. She specialises in working with leaders and senior salespeople.
Bloojam Consulting offers a range of robust recruitment and development tools and interventions, including its unique Acuity for Strategic Sales suite of psychometric assessment and development tools.