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Industry Trends

The 7 challenges of Professional services organizations

8 min.

challenges Professional services prganizations

Every leader, every manager needs to be clear on the challenges facing his or her intellectual services company. If you have come across this article, it is probably because you want to go deeper into the subject or to compare your ideas. You’ve come to the right place! This article offers a summary of the discussions that took place during the round tables. Organized by the Club Performance, these round tables brought together more than 100 decision-makers and managers of Professional Services Organizations.

Professional services organizations: the challenges to be faced

Optimize the profitability of your intellectual services company

Average daily rates (ADR) that remain globally stable, salaries that are increasing… It has become more difficult to optimize the profitability of one’s consulting firm, one’s ESN or even one’s design and engineering firm. In addition to GPA and salaries, there are also structural causes that explain the difficulty in optimizing the profitability of your company. Even today, intellectual services companies manage their staffing mainly by using Excel files and sometimes by organizing staffing committees. This not very digitalized management relies essentially on the knowledge and memory of managers. It therefore has its limits and is the cause of a series of profitability leaks.

Let’s take an example: a consultant returns from an assignment very soon. Between the moment when the information is known and when it is passed on to the manager or the person in charge of staffing, several days or even several weeks can pass. As a result, the consultant finds himself on the bench due to a lack of real-time information and anticipation. However, each day not staffed is a day not billed. Fortunately, new technologies now offer the possibility to centralize and instantly update information. This gives companies the means to be in anticipation to mitigate the leakage of profitability.

Recruit and retain more volatile consultants and engineers

The growing attraction of freelancing, the desire to work for fast-growing startups, the war for talent that is starting up again… Recruiting consultants and engineers is not going to be an easy task in the coming months. “In the five years I’ve been in charge of recruiting at Oliver Wyman, 2021 looks like being a record year. Whether it’s for interns, junior consultants or experienced consultants, we’re looking at two to three times the number of hires than in pre-covid years,” says Eric Bach, Partner in charge of recruiting, in a Consultor article. There is an obvious reason for this: business is picking up strongly, especially for consulting firms and digital services companies (DSCs). The order books are full and companies need new talent to staff the missions.

Once recruited, this talent must be retained. Here again, intellectual services companies will have to reinvent themselves. For a long time, the reputation of the company and the salary alone could be strong arguments to attract talent and make them want to stay. Times are changing! With numerous offers on the market, more consultants and engineers are looking for assignments that make sense to them. They will be able to increase their skills, take on new challenges and build strong relationships with their colleagues and clients.

Another subject of debate within intellectual services companies: the management of consultants in the provinces. With the successive confinements, the return to the city or to the office can be difficult. Especially since telecommuting has proven its worth for many consulting missions. “The confinements showed us that we could do our job remotely. I was even surprised by our ability to work remotely: two years ago, I would never have believed that we would be able to grow so much by telecommuting”, says Henri-Pierre Vacher, the senior partner in charge of private equity for the Wem (Western Europe & Maghreb) area at EY-Parthenon.

The difficulty in recruiting and retaining employees implies at least one thing: reconsidering consultants and engineers who are not simply “resources” to be staffed. They are people with different ambitions and wishes for evolution. Taking their aspirations into account, in the same way as the company’s challenges and staffing needs, is therefore essential.

Capitalize on its network of freelancers and partners

Transformation projects are often complex and the requirements of clients are demanding. Faced with tougher competition, intellectual services companies must be able to staff the right profiles more quickly.

However, the required skills are not always available internally. In this case, it is common to source a new freelancer. But this is time consuming. Moreover, we are faced with the uncertainty of the new freelancer’s ability to deliver and adapt to the client company’s culture.

It is better to capitalize on the network of partner companies and freelancers with whom you are used to working. It is in the interest of companies to rigorously record the experience, the customer relationship, the missions and the skills of their freelancers. They must be considered as talents. They are staffable, just like internal employees. The ability to capitalize on their sourcing and skills will be key in the coming months.

Stand out from the competition

Freelance platforms and intermediation companies are taking market share. Added to this is the issue of consultant location. With the possibility of telecommuting, the location is not as important in the arbitration of staffing. Indeed, consultants based in Paris, Lille or Grenoble can work on the same mission. This inevitably leads to a widening of the competition. It will be necessary to respond better and faster to customer needs.

Under these conditions, companies are not hesitating to rethink their organization, particularly through the recruitment of resource managers. One of the tasks of these profiles is to gather the right information more quickly in order to make the best staffing decisions. In terms of skills, it is a hybrid profile that is often targeted: “We used to have an HR profile, but it didn’t work for us. Today, it’s a hybrid profile between business and management. It’s someone who has already managed projects,” says a participant in one of our roundtables on current staffing practices.

Facing a diversification of expertises…

We are facing a tsunami of knowledge. The more knowledge there is, the more we are able to innovate, leading to a diversification of skills. Today, the pace of innovation is moving at an impressive rate. One example is the speed with which the mRNA vaccine has been developed. Or, more broadly, the speed with which new tools, in all fields, are released every day.

To understand this tsunami, Buckminster Fuller’s statistical model of the doubling of knowledge is particularly eloquent. In the 80’s, he demonstrates that the quantity of knowledge doubles faster and faster. He shows that between 100 BC and 1700 AD, it took 1800 years to double knowledge. Between 1700 and 1900, it took only 200 years for knowledge to double again. Then 50 years between 1900 and 1950, etc. After Buckminster Fuller’s death, IBM used this statistical model to predict that in 2020, the amount of knowledge will double on average every 12 hours.

And it’s 2021! Intellectual service companies have a strong challenge to map and understand the skills they have at their disposal. They need to understand in greater detail and analyze more regularly the skills of their employees, and to relate them to the expectations of their clients. It is this analysis, among others, that will enable them to identify the skills that are in tension, those to be recruited and developed.

… but also to a more rapid obsolescence of skills

Diversification and obsolescence are two sides of the same coin. With innovations coming out every day, new skills are created, some evolve, some are lost. The pace of skill obsolescence is accelerating. Continuous training is therefore also a major challenge for companies. In this regard, Alexandre Lecomte, CEO of Econocom Ingénierie, has decided to focus on technology, among other things. “We needed to take the pulse of our workforce in real time. This 360° vision allows (…) the emergence of communities of expertise and helps consultants to identify the reference points on which they can rely to train and grow within the company”. Technology is certainly not everything. But it’s interesting to note that a well-known player in the intellectual services sector is taking the technological gamble to support the skills development of its employees.

Staffing shorter and shorter projects

Remote working will have an impact on the way services are sold and billed. How can you justify billing for a full day when a remote consultant can be flexible and change clients during the day? Billing by the day will be less and less justifiable. We are moving towards a much shorter staffing, on half or even quarter days.

Shorter projects require more frequent and faster staffing. It is therefore necessary for the company to anticipate as much as possible the return of its employees from their missions. This anticipation is essential in order to staff future projects more quickly. It is also necessary to be able to identify the right profiles more quickly.