Consulting’s Top Ten Trends for 2022
“The Great Resignation.”
Or the more pedestrian “You’re on mute.”
These are the words and phrases that pundits predict will someday define our collective experience over the past two years.
But as we eagerly look towards a more hopeful year ahead, what words will describe our 2022?
In professional services, “Digitization,” “Acceleration,” and “Diversity, Equity, and Inclusion” are already forming the new narrative.
Here’s how we think the rest of the story will unfold.
1. Digital disruption will solve supply chain issues at scale.
Puns about toilet paper and rice aside, the supply chain saga has highlighted the fragility of our increasingly dispersed and globalized supply chain. Meanwhile, digitization is now table stakes, and businesses are taking it seriously. Those that can leverage digital and AI to solve the supply chain challenge at scale are primed to disrupt the competition.
2. Digital finance will fundamentally transform how organizations are run.
AI, Cloud, and digitization are now being leveraged to improve functional efficiencies. They will change how back-office fundamentals, like finance and human capital, are run. The newest frontier is Digital Finance. Capability here will pave the way for new connectivity, adaptability, and visibility into emergent challenges.
3. Verticalization will continue to change the consulting ecosystem.
Firm identity has long been rooted in strategy or implementation, but rarely in both. But as clients now demand “one-stop-shop” solutions, firms are looking to new operating models that address both needs under one brand. As a result, verticalization will increasingly define the firm ecosystem, placing new pressures on both talent and firm economics.
4. Digitalization will continue to challenge and change firm economics.
In the race to provide end-to-end enterprise strategy through value realization, human capital-intensive work that once formed the financial bedrock of most traditional professional services organizations is being replaced by AI, digital, and automation. At the same time, clients are increasingly focused on outcomes.
Together, these factors will continue to drive a move away from time and materials to outcomes-based fees. Gain share will likely reach 50%/50% by mid-decade; a nearly 10 fold increase from 2017.
5. Inflationary hiring is here to stay. At least for the foreseeable future. Temporarily.
Trading in talent has always been expensive. But today, inflationary compensation hovers north of 25% (40% for diversity hires) compared to an average of 17% just two years ago.
With the war for talent at a zenith, the trend towards inflationary hiring is likely to continue apace for the next few years. Evaluating and accelerating your talent to maximize ROI will be imperative, as will choosing the right retained talent partner to help you do so.
6. Performance acceleration will emerge as a pivotal weapon in the war for talent.
With talent at a premium, and in short supply, a singular focus on recruiting new talent is no longer a viable strategy for growth. Now organizations are asking how they can get more out of the team they already have.
Performance acceleration will emerge as the solution, helping organizations align and equip their talent to perform at their best.
7. Firms will look to nontraditional hiring to fill the talent gap.
Along with partner acceleration, firms will increasingly look to nontraditional channels, like academia and industry, as a source of new talent. But increasing their aperture for talent means that firms must sequence a new professional DNA profile for leadership success. What are the unrefined characteristics, skills, and abilities that outside talent needs to outperform in the consulting world?
Those that do it well, and first, will avail themselves of a treasury of new talent and market potential.
8. D&I efforts will shift focus from hiring to acceleration.
Most, if not all, of our clients know that having a truly diverse workforce is an inarguable business imperative. Yet meeting D&I hiring objectives has proven an extraordinary lift for most organizations. And with centuries of accumulative systemic forces to overcome, there is unfortunately no quick or easy solution in sight.
Firms will not only have to expand the aperture of the lens in which they view talent, but also work harder to identify and cultivate high potential talent from within. Identifying key high potential talent to retain and accelerate their performance, will play an increasingly pivotal role in helping them do this.
9. Technology, Travel, and Tourism will emerge as industry hot spots.
As anyone who’s tried to book a flight or rent a car in recent months already knows, travel and tourism have come back with a roar, fueled by post-pandemic pent-up consumer demand. Now businesses once shuttered by lockdowns are finding themselves short on talent, leaving the industry ripe for disruptive innovations in price, speed, and efficiency.
Meanwhile, tech remains a driving force with no indications of a slowdown. With 85% of most businesses across industries facing similar technological challenges, opportunities abound for those who can innovate common solutions at scale.
10. Social purpose will become a requirement for attracting new talent.
Demonstrating a true commitment to social purpose prerogatives like D&I, human rights, sustainability, and climate justice may be the single most important move that firms can take today to attract the talent of tomorrow.
In the words of social purpose author and entrepreneur, Jonah Sachs, “In order to tell better stories, brands must actually be better stories. Our brave new media world hasn’t just put audiences in charge; it has also given them the tools to instantly peel back the curtain on marketing campaigns and to look at the substance behind them.”
What story does your brand tell to the talent you are trying to attract?