The ability to attract, hire and retain staff is one of the most critical factors in any management consulting firm’s success.
A smaller, growing consultancy firm, without a Big Name draw, will often find itself in a constant battle to find people. This is time consuming for key senior staff, inhibits growth and saps profits.
The firm’s assumption can often be that this is an inevitable ongoing challenge. While this is an understandable conclusion, it is not in fact true. Nevertheless it is a mind-set that can prevent an objective look at the real reasons for failing to find the right talent.
What are the key success factors?
Clear employee brand and value proposition
It may be obvious to the founders and early employees why their new company is great but this may not be conveyed to potential applicants. Time needs to be spent clearly defining attractive and resonant messages to communicate these to the relevant candidate market. How do you differentiate? Why would someone want to work for you? Where’s the career progression and development? What are the firm’s culture and values? Much of this should be tied in with the leaders’ vision and goals for the firm.
Clear and consistent candidate profile
Small consultancy firms often prioritise team fit over experience and track record: the result can be illogical hires. This may bring unexpected left field talent but more often means employees whose capabilities are unproven, some of whom inevitably either can’t do the job or will take a lot of leadership time to get on track. Because these employees are great in the team it might take time to recognise this, if ever, and traumatic to rectify. A management consultancy firm needs to have a clearly defined candidate spec. This should be flexible enough to recognise that perfect candidates don’t exist but narrow enough to reduce the risk of mistakes.
The other vice is the reverse: seeking candidates in the mould of the founders, or one or two successful early hires. Inevitably smaller management consultancy firms will feel the stakes are high and fear the damaging effects of a mistake but can end up too risk averse. Too narrow a spec can scupper growth ambition and a firm’s diversity. Many firms shrug their shoulders and view this as a badge of honour, a reflection of their exacting standards, the fickle market or inept recruiters. When actually it’s an excuse for failure to hire and acts as a brake on success.
Unless a candidate already knows how wonderful an employer is (perhaps because they come via the network) their only impression of a prospective employer is the people they meet, the way they present the role and the firm and how they are treated in the process. The process in particular is sometimes a weak link because senior hiring decision makers inevitably have many demands on their time: “candidates have to understand that clients are our top priority”. It doesn’t have to be one or the other! Arguably the candidate experience should actually be top priority (because of the knock-on impact of getting the best hires) and this should be agreed across the leadership team.
Competitive salary or package
The early hires and founders may be willing to start on salaries below market rate but once the firm becomes more established the question to be asked is perhaps the reverse: should a small, “risky”, non-branded firm pay above the market rate to attract good people? Many management consultancy firms will be wary of bribing candidates to accept an offer. However sometimes the difference between an offer that can be perceived with a measure of coolness and one that might be viewed positively can be as little as 5%. If that tweak to the offer is not possible what could be part of the package (in the broadest sense) to compensate? A more generous bonus? Equity? Work/life balance benefits?
A good candidate pipeline: volume
Firms always underestimate how time-consuming building a pipeline can be. Or how many candidates they need to be putting into the hopper to produce successful hires and compensate for any attrition. Also growing the team by 25% requires massively more effort when you are 25 employees than it did when you were 5! Combined with the understandable wish to focus on clients and reluctance to hire without a project to put employees on this leads to stop/start and sporadic hiring. Recruitment needs focus, consistency and effort and that can only come from either hiring someone to do it, or outsourcing i.e. using specialist management consultancy recruitment agencies, or ideally a blended approach of both.
A good candidate pipeline: quality
When firms fail to find the right quality of candidate it is tempting for them to assume that the problem is down to their own expectations or the market. The much quoted “war for talent”. While both expectation and market can indeed be a problem, it is more usual that the firm is too narrow in its use of sourcing or candidate acquisition methods and routes. The most common example might be to employ an inexperienced (i.e. lower cost) internal recruiter whose main focus is LinkedIn approaches. There is nothing wrong with using LinkedIn to find management consultants, but it should be merely one of a variety of different routes. The broader and more extensive these are then the greater the firm’s reach in the market and the greater the numbers of first-rate consulting candidates they can access.
Sensible cost benefit analysis: strategic use of agencies
Strangely, given this is bread and butter with their clients, consultancies often overlook the cost benefit analysis. I mean, of course, recruitment agency fees, which firms will go to considerable lengths to avoid despite the pain it may cause them. There are many reasons for keeping Cost Per Hire low. However, the simple fact is that if an agency candidate is hired and goes on a project their margin will cover the fee fairly swiftly. Or at a senior level they may sell work. Whereas a delay in hiring, to avoid using an agency, may involve paying associate rates or possibly no revenue. If there is a better candidate without a fee then of course the profits are higher but in many cases there isn’t such an individual available. So not using a specialist management recruitment agency will simply mean there isn’t a permanent employee to staff a project or grow the business which is a hit on both revenue and profit.
If you would like to discuss how Prism could help you to find and secure your ideal candidate please contact Chris Sale, Managing Director, Prism Executive Recruitment on 0203 143 5926 or [email protected]