Professional services and consulting firms have long been known for their high workload and fast-paced environment. Current trends, however, may call for a significant shift in the way these firms operate.
From 2020 and into the first half of 2022, the professional services industry was booming. But while firms were flush with business, many found that their teams lacked resources to meet the demand. Finding themselves short-staffed, firms were forced to either turn away lucrative contracts or plow ahead at the risk of increasingly burning out their consultants. Today the industry finds itself in a much different place on the supply-and-demand curve. Amid economic uncertainty and belt-tightening across the business landscape, many firms are now struggling with finding work for their current teams and becoming seriously worried about very low utilization levels.
In the past, firms were forced to accept such cyclicality as a reality of the consulting business. Professional services staffing levels would balloon in good times, but in trickier conditions, firms were forced to diversify their offerings to drum up business or make difficult cuts to optimize costs—leading to a loss of valuable talent and institutional knowledge. These cycles are very disruptive for professional services firms and their employees. Moreover, the problem has gotten even harder over time as practice areas have grown more specialized—necessitating deeper industry or functional knowledge for top client work. Staffing and utilization have to be examined on a more granular basis, but moving people from one area to another can be difficult given the lack of expertise.
To avoid the hit to performance that these issues can result in, many top firms are now seeking a better way to manage their staffing levels through both boom and bust periods.
A Smarter Way to Manage Fluctuating Staffing Needs
Thankfully, the rise of high-end, on-demand talent offers professional services leaders a better way to think about controlling their staffing levels of mid-pyramid talent (e.g post-MBA to engagement manager). Rather than endlessly tweaking staffing to meet current conditions, firms can set their “all full” level lower (around 90% per practice area) and then strategically supplement teams with on-demand talent—including management consultants, executives, project managers, and experts who have chosen to work independently on a project-by-project or interim basis—to fill in the roles, gaps, and expertise needed for specific client engagements. With training from traditional consulting firms, hands-on operating experience at top companies, and deep expertise in their respective fields, these independent, on-demand professionals can bring fresh perspectives and in-demand skills across a wide array of consulting engagements.
A Winning Solution for Firms and Their Clients
Using on-demand talent in this way has several benefits for professional services firms:
- The firm can reduce its fixed costs by supplementing teams with extra skills and capacity only when necessary, rather than keeping those resources on hand in a permanent position. This can help the firm maintain or even boost profitability at all stages of the cycle.
- Teams can tap into a broader pool of expertise by leveraging on-demand talent, enabling them to deliver better results to their clients and win new business.
- Industry and practice areas can have ready access to the right people with the right skills to execute specific client projects, rather than tapping somebody without deep experience “on loan” from another area.
- Staff can focus on their work and be more productive without having to worry about layoffs during downtimes. And when business is booming, consultants are no longer stretched thin trying to keep up with demand.
New Ways to Work Require Innovative Thinking and Strategic Partners
These decisions are strategic and have to be taken at the highest levels of a firm—i.e. the CEO, CFO, CHRO all have to be in alignment—and the executive team has to be open to new ways of working and be willing to experiment with new staffing models. They also have to be willing to invest in on-demand talent and develop the necessary processes to successfully deploy them. But most of all, they need an experienced, on-demand talent partner like Business Talent Group (BTG) who can ensure that the right talent are found for client projects, quickly brought up to speed, and seamlessly integrated into the firm’s teams.
With BTG, professional services firms can tap into a deep network of highly skilled professionals who can help firms with various projects. BTG carefully and compliantly curates, vets, and deploys these professionals to ensure they fit in with a firm’s culture and can work hand-in-hand with existing teams. BTG also provides ongoing oversight to ensure that projects are delivered on time and expectations are met for both the professional services firm and its clients.
Regardless of market conditions, rethinking professional services staffing strategies will be crucial to ensuring the sustainability and profitability of these firms over the long term. By embracing new ways of working with on-demand talent and partnering with providers like BTG, consulting firms can reduce fixed costs, tap into a broader pool of expertise, and deliver better results to their clients. As the consulting industry continues to evolve, firms that can adapt to the changing talent landscape will be the ones that thrive in the years to come.
About the AuthorMore Content by Laura Klein