People are your greatest asset but….?

The largest cost item in any professional services firm’s P&L account is people. Boards/Executive Partners worry about this cost and delay recruitment, preferring to run with the variable (higher!) cost of Associates until they’re sure that the forward revenue stream for a particular type of person is truly there. Then, once consultants are recruited and have been taken through some form of induction, they often disappear into the inner workings of the firm, only to reappear on the Partners’ radars at six monthly or annual appraisal rounds unless they’ve been resourced onto an assignment that has active Partner involvement.

Why is this? I would argue that the Partners are understandably focused, on a day-to-day basis, on their clients since without them noone gets fed. Without the people, however, there is not only noone to feed but also noone to deliver the great results for our clients that we desire. We need to get the balance right.

Each firm has requirements of its people (e.g. deliver the client result, keep personal utilisation high, write white papers) but its people also have requirements of the firm (e.g. pay me the going rate, give me a career path, give me interesting and stimulating assignments, create an environment in which I can expand my business and personal network). It’s tempting (and old school!) to say that Operations should be on top of most of the first area and HR on top of the second but, if we’re honest with ourselves, we know that this is not correct.

Mechanical aspects, largely the ones that suit the firm’s requirements, can often be met these days by correct use of end-to-end professional services automation and HR management systems – modern, cloud-based solutions that are reasonably well priced and powerful in what they can deliver. Knowledge of utilisation levels, both backward and projected forward, is relatively simple, keeping detailed skill sets up to date and that fit with personal development plans is doable and resourcing people onto the right projects is a lot quicker and easier than the steam driven approaches of the past. For me, these systems are a no-brainer, allowing Partners to lift their focus out of the weeds.

Addressing the people’s requirements of the firm will come back to reward that firm in many ways. Whether you subscribe to models such as Maslow’s hierarchy of needs (the original five stage model or the expanded version) or not, such models do, as a minimum, tend to give a helpful checklist of topics that every firm should consider and decide on its approach. Yes, basic needs are met by paying people the going rate, establishing an office environment that people want to go to when not on client site, having equal opportunities policies etc., and these are topics to review occasionally. Higher level needs are harder to address and require a culture of continual support. When we get it right, our people feel that they belong, they exude confidence and they choose to go the extra mile for both the client and the firm – this is when the magic happens!

5 Replies to “People are your greatest asset but….?”

  1. An important topic David. You talk about firms making the jump from running Associates to hiring permanent employees and I think that is key. That decision is not just about having confidence in your forward pipeline of work to keep people busy and off the bench, it is also about acknowledging that permanent employees will have more requirements of the firm and anticipating how to address them. People will be looking for career development and interesting assignments, but they also want to ‘be part of something’, to influence and to contribute beyond the day-to-day delivery of client work, and that is where firms have so much to gain if they get it right.

    1. Exactly, Caroline! Understanding the motivations of the individuals and how they want to “be part of something” is a critical start point.

  2. Great blog David, quite often utilisation, however, is the driving factor and sometimes this needs to be considered too in the manner of the behaviours that it creates/helps manifest. People are, though, absolutely the key asset – after all, the old adage comes into play… “people buy people” and this is equally true in consulting as well as any other type of sales situation.

    1. Thanks Simon. Yes, utilisation is often the driving factor – without decent utilisation levels, no professional services firm will make money. Being a slave to utilisation, however, is where the danger lies.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.