2019 In the rear-view mirror
What we learned about the top hiring trends for leaders in consulting
As I reflect on 2019, management consulting firms encountered various challenges in hiring top talent. Trends are trends and we can all read about them in the innumerable research-based and analytically robust articles posted daily on your favorite blogs, LinkedIn, and consulting industry websites. We can also consider the actual experience we have had doing what we do every day. No doubt, you will see that your own experience lines up with the trend data.
Further, you can trust that if you take a few minutes to ruminate on it, you will also know some of the best next steps for your organization to take if you want to continue to be relevant and on the leading edge of your game.
We have compiled the following trends based on our experience in 2019. These key trends will guide us in how we serve our clients as we step into 2020 and beyond.
- Diversity is not only relevant and one of the hottest topics in any serious leadership dialog and talent strategy, it has finally become table stakes for any growth-oriented firm.
- The need for a new brand of leadership is one challenge our clients seem to be facing in order to grow their business.
- Technology Savvy Leaders (AI/Automation/Digital Enterprise/Analytics) must be prevalent in your firm if you want to be a thriving leader in the 21st Century.
- Human Capital, the Workforce of The Future is becoming the only real competitive advantage, and relatively few organizations have really grasped the magnitude of change or how to implement it in order to create high performing “human enterprises.”
Are there a long list of other important hiring trends? Certainly. However, your organization, like ours, must place a bet and choose the few that matter most to focus on that will make the biggest difference for your clients’ and to enable your growth strategy. Why? Because choosing what you will focus on is the only way to enable excellence. When companies take the approach of being “all things to all people”, they fail many times over.
Unlike many other executive retained search and leadership firms, our only focus is leadership in consulting and professional services. Hiring, integrating and accelerating leaders to their full potential to realize success for our clients is all we do.
The most important thing to learn from trends we experience is the impact and insights they tell us. As we look ahead, we have put together valuable insights that are driving our service to our clients in 2020.
While there remain a few dominating players in the $284 Billion dollar management consulting industry, the middle market is returning as a “go-to-choice” for specialty consulting. With this shift, more and more midsize and boutique consulting firms are making their mark and increasing the competition for leadership talent in the industry.
Diversity: Over 85% of the searches we accepted in 2019 had a specific requirement for a diverse and gender balanced slate of candidates. The reasons stated had nothing to do with responding to societal or political pressure. The dialog revolved around the importance of building, from the top down, a relevant culture as a significantly important factor in getting the most creative talent into senior leadership positions.
We know the diversity gap won’t be won from a supply perspective because there is a lack of supply to meet the demand. To win at diversity, companies will need to focus on acceleration, retention and recruiting and these should be inextricably linked, and not just at the top.
- Integration/Acceleration: The first challenge in acceleration is the lack of these programs in the industry. Less than 2% of global companies have a published acceleration/integration plan and when they exist, it is primarily focused on the senior leaders. The second challenge and one that carries just as much weight, is the lack of investment being made to support the acceleration of mid-level staff.
Progressive firms should take a holistic acceleration approach allocating the spend across all levels. The least developed and engaged population today is the junior to mid-level manager. In, How HR Can Help Middle Managers Succeed, Jim Harter, chief scientist of workplace management and well-being at Gallup recently said, “Middle managers are the translators of the organization’s strategy and implementation”. This is no different for professional services and consulting firms. The middle is the key to translating the vision and executing the strategy. Let’s add the rapid pace of change in the workplace and the compounding impact is staggering. Unfortunately, this is where we are seeing the highest turnover and most significant diversity departure. The investment of integration and acceleration funds in the middle of the organization would be pay the highest dividends in employee loyalty, overall employee engagement and higher satisfaction for the client.
- Retention: The statistics around turnover of the 4 to 5-year manager in consulting has been and remains a troubling number and heavily weighted to females. This includes the manager, project leader, and engagement manager. We have seen this point as a common time of inflection for females making a career change for either a better opportunity or alternatively, to move off the road to be closer to their growing family.
A deliberate effort must be made to retain this staff by offering new types of engagement (less travel), skill building to the expertise your firm and industry lack and finally, and most importantly, acceleration programs that invest in this staff to build self-mastery skills that will be integral as they move up the leadership ranks.
- Recruiting: If you want to win diversity recruiting, focus with intent on the middle as there is more supply. You can develop a compelling reason to attract key talent to and to remain relevant in the industry.
A new brand of Leadership: The perennial issue of our time, according to the 2019 Deloitte Human Capital Trends Report, is developing 21st century leaders. In their extensive research, 80% of organizations say the need to develop leaders differently is at the heart of their talent strategies. They need leaders who know how to place an equal emphasis on revenue growth and creating highly collaborative work environments. Leaders who value and believe that diverse perspectives solicited in highly engaging ways, drive innovation, a better client experience, and better results.
In consulting we are seeing the divergence of the leadership approach from what I will call “old school consulting” (meant only in the kindest regard) and the “new” required now to engage with and lead a millennial driven workforce. In the past, IQ and work ethic was the duo successful leaders emulated and expected from every level of their teams. Today, we see the most successful teams are being constructed of leaders with high EQ, giving them the ability to balance a nurturing culture with successful revenue growth and the highest client service. This is not to say that IQ and hard work aren’t important, they are but the new leader should have the self-mastery to meet the team “where they are”.
One key tenant to fostering the new brand of leader, thus building high performing and diverse teams, lies in a companies’ ability to assess and attract leaders with high EQ and programs that build self-awareness and collaboration. Yet another instance that a robust and deliberate acceleration program would support leadership success.
Technology Savvy: The case has already been made for the inescapable need to source, hire, and build digital capability to win in today’s marketplace. According to some of the most progressive and successful digital experts, leading digital transformation is 10% data, 20% technology, and 70% people. Ray Kurzweil, commonly referred to as a “modern day Einstein” (and a renowned innovation consultant to digitally oriented growth organizations,) says that the biggest barrier to innovation in organizations is not the availability of technology; It’s the ability of people (and leaders) to support innovation and put digital at the core of their strategy.
The world in which we operate in is a new world. In our experience, the consulting leaders with an affinity for and an understanding of how technology is impacting the world they live in and most importantly, the clients they serve, are seeing the highest growth trajectory. The savvy leader will need to possess and strive to continually improve their acumen in how technology impacts everything they do. This is not to say that each practice and or sector leader must be a deep technologist, but it must be a tool in the tool belt. The days of handing it off to the technology practice is over. Without a strategy that has embraced technology, these leaders will suffer both in the eyes of the client and the teams in which they lead.
Human Capital or WOTF (Workforce of the Future): The importance of and the ability to build a human capital strategy that creates a true competitive advantage, is changing at a dizzying rate. The most operative description seems to be the imperative for putting the “human” back into our work environments. Again, according to the recent Deloitte Human Trends Report, that means building a culture that employees at all levels feel is focused on: purpose and meaning), ethics and trust, personal growth, collaboration and relationships (human connection), transparency and openness. This all sounds great until you think about what it really takes (the kind of courageous leadership) to commit to building it.
There has been a constant wave of change in operating models across consulting and professional services over the last decade. To support growth and relevancy, these firms must reshape the way work is getting done; the way teams are deployed, and the way fees are actualized. This shift is making a significant impact on today’s workforce in consulting.
Clients are measuring consultancies success on the value they provide. There are less and less projects that are rate based and headcount driven. The client needs “outcomes” and the most successful consultancies are focused on driving value and in turn, pricing on the value received. It is the proverbial “high risk, high reward” scenario.
When the consultancy is focused on and able to deploy the right expertise on the project at the right time to drive high valued outcomes, the margins increase while the outcomes are achieved. This is a departure from the “perfect pyramid” delivery team born in the consulting industry.
This creates a unique set of workforce challenges for these firms. They will need to have the expertise available to deploy and only when needed while keeping the engagement leader on the ground to ensure the outcomes. Perhaps the most tenuous challenge is that of shifting the mindset of those in both client service as well as commercial roles on the difference between rate-based project consulting to selling value-based outcomes. Firms that haven’t moved from the rate-based selling will continue to be marginalized as the only lever they have to pull is price which becomes a race to the bottom.
The potential for responding to all of these trends and separating yourself from the pack is not that you recognize and can articulate these trends; but more that you have your own secret sauce, born out of your own experience and thoughtful reflection for how to actually integrate, retain and accelerate performance in your firm. I believe the greatest scarcity of our time is the lack of great leadership. Building these muscles will drive your team to the kind of 21st century human capital leadership that will pave the path for the next generation. Here’s to a great 2020 and tremendous new growth opportunities!