Outlook for Recruiting in the Professional Services Industry
Evolution in Professional Services
A report from Mercer titled Professional Services Industry Insights notes that before the pandemic in early 2020, significant changes were already taking place across the professional services sector. There was an increased focus on enhancing the employee experience, clarifying career expectations, introducing greater flexibility into the workplace, reskilling and upskilling workers, and finding the right strategy for retaining valued talent.
Professional services firms recognized that although cash compensation was a key lever for engaging and retaining client-facing talent, identifying a total rewards solution was paramount for distinguishing themselves from competitors. Work generally took place in the office or onsite at client locations, and long hours, tight deadlines, and frequent travel were all an accepted part of the employee value proposition.
COVID-19 was initially met with a combination of temporary pay reductions, delayed promotions, and the elimination of merit increases and bonus awards. Firms were looking for actions to reduce costs and avoid staff reductions (which were common in the last major recession in 2008). By the end of 2020, most firms recognized that they could still be efficient when operating remotely, and overall performance was surprisingly strong.
The Importance of Professional Services Recruitment
Professional services firms are front and center in the competition for talent as young professionals migrate to jobs mainly in the private sector. However, after taking a conservative approach to pay in 2020, some major firms administered more than one organization-wide salary increase event in 2021, along with annual bonus awards and additional “thank-you” bonuses to try to stem the tide of higher turnover.
Those off-cycle adjustments continued into 2022. Leaders are now challenged to redefine their employee value propositions and identify the right levers to engage and motivate client-facing talent effectively. More recently, major law firms have announced first-year law school graduates will have starting salaries of $215,000, which has a ripple effect on pay for all levels of associate attorneys. There is an increasing realization that the right strategy to limit the departure of staff will not be through cash compensation but instead through other total reward vehicles, which will vary from firm to firm depending on their particular business and talent strategies.
As companies seek better ways to engage and retain talent, employees are scrutinizing the value they create through their work. Both acknowledge that the current environment is one of doing things differently — figuring out how to work, learn, and laugh together.
The Research on Professional Services Talent
Mercer’s research shows that relatable companies are leading the way in retaining and engaging talent. They are constantly resetting for relevance, seeking to work in partnership with talent, working hard to deliver on total well-being, and building for employability to harness the collective energy of their people.
One of the most striking findings of the Mercer research is that Partnership is no longer the career goal for most emerging professionals. The dim view of work-life balance for partners is a large factor in this. While new graduates are working for large firms (such as Mercer or large law firms) for a couple of years to burnish their resumé, they are moving on after two or three years to internal roles in the private sector.
The challenge for professional services firms is understanding their employee value propositions and crafting an array of customized programs and options for their unique workforces and cultures. Firms are all on a journey to revamp their total rewards approaches and identify the “secret sauce” that will meet the specific needs of their workforces. Creating a compelling career experience and meaningful total rewards packages will go a long way toward attracting and retaining high-value talent.
Professional service firms must shift quickly from old, traditional forms of management based in profit, competition, command, control, and expectations to leadership that is more nimble, agile, and consistent with what the new generations of leaders are used to in a fast-paced, quickly evolving world. Given the complexity of this change, firms will need to recruit, interview, and screen in a whole new way. A relationship with a recruiting firm that understands and stands for the demands of this new world is likely to produce the best results. An effective recruiting partner will partner with the company to identify the right combination of skill and experience to find the top candidates and to convey to them what the hiring company stands for.