“According to LinkedIn, the professional services sector has the highest attrition rate among all industries.”
In recent years, the professional services industry has seen a significant rise in employee attrition rates. This is due to several factors, such as sub-optimal utilization, high levels of stress and burnout, lack of proper compensation, poor career growth opportunities, and more.
Failure to address these issues can hinder the PSO’s ability to deliver projects on time and meet client expectations, thereby negatively impacting the firm’s top and bottom lines.
Therefore, it is the need of the hour for professional services firms to create a well-defined retention strategy that will help them maintain a robust talent pool.
This article elucidates the best techniques to reduce PSO attrition and how an efficient ERM tool like SAVIOM can help combat it.
Consequences of attrition in professional services firms
Employee attrition refers to the exit of resources from the organization for various reasons, such as resignations, retirements, transfers, etc. Frequent resource exits from a PSO can deplete the internal talent pool and have severe consequences on operational workflow.
When experienced consultants leave the PSO suddenly, it results in a loss of institutional knowledge. This also leads to increased training costs and project delays as new substitutes need time to gain proficiency in their roles.
In addition, unplanned attrition leads to last-minute firefighting of resources. It usually results in high-cost recruitments or the selection of inadequately skilled personnel, leading to budget/schedule overruns and substandard quality of deliverables.
Moreover, it adversely affects the team dynamics. The sudden departure of consultants can increase the workload of existing resources, hampering their productivity and leading to high burnout.
Knowing the repercussions of attrition, let’s learn the best methods to overcome them.
7 effective strategies to manage attrition in professional service firms
Professional services organizations need to take the following measures to minimize unplanned attrition:
1. Create a robust onboarding strategy for new hires
According to Glassdoor, organizations with effective employee onboarding can increase retention by 82%.
Robust onboarding processes can help new joiners in PSOs acclimatize to team dynamics, roles & responsibilities, and company culture. Therefore, managers must take them through the organizational structure and introduce them to team members. Moreover, the firms can assign mentors who can offer continuous support and guidance to the new hires throughout their journey.
In addition, PSOS can provide induction training to familiarize them with standard operating procedures and performance metrics. Besides, they can offer on-the-job learning opportunities where new employees can shadow their seniors to understand their roles better. This will help them build the necessary skills and knowledge, boost engagement, and lower the churn rate.
2. Assign professionals to suitable projects based on skills & interest
It is important to align the resources’ skills with suitable work as it increases productivity and engagement. Therefore, before assigning consultants to projects, managers must gain comprehensive visibility of their attributes, such as skills, qualifications, availability, experience, etc.
Moreover, managers must also consider the consultants’ interests when assigning them to projects. It improves their motivation and overall job satisfaction, making them less likely to seek opportunities elsewhere. Thus, competent allocation can minimize the risk of disengagement, burnout, and turnover significantly.
3. Offer compensation packages as per market standards
“According to a Qualtrics survey, employees who are satisfied with their pay and benefits are 13% more likely to continue working for their current employer.”
Compensation is one of the most influential factors that shape the consultants’ decision to remain with the existing firm or seek new opportunities. Moreover, adequate compensation establishes a compelling proposition for consultants to be more productive and efficient.
Consequently, PSOs must offer competitive remuneration packages aligned with market standards to retain top-tier talent. In addition, they must consider providing performance-based variable pay and benefits such as health insurance, paid time off, incentives, etc. Incentivizing employees signals the company’s appreciation for their contributions, fostering prolonged tenure.
4. Provide stretch assignments to junior consultants periodically
Stretch assignments are a common practice in the professional services industry. These assignments are designed to test and upskill the capabilities of the consultants. Therefore, allocating junior and intermediate associates to such exercises helps them prepare for new challenges and grow professionally.
For example, a financial firm can assign junior auditors to specialized assignments focused on data analytics. This initiative enhances the auditors’ proficiency in this field and helps them streamline financial analysis processes. Thus, stretch assignments accelerate employees’ career trajectories, keep them engaged, and curb attrition.
5. Leverage senior consultants for strategic and leadership roles
Senior consultants often experience job monotony over time, which can lead to disengagement and, eventually, unplanned attrition. Therefore, managers must deploy them to strategic or leadership roles beyond their day-to-day activities that help them showcase their learnings and contribute to bigger organizational goals. For instance, an IT firm focuses on upskilling its team with emerging technologies like Generative AI and Datafication.
For this, the firm can assign senior consultants to conduct training sessions, mentoring programs, and workshops. Moreover, they can identify senior consultants who can utilize their skills and expertise to drive strategic initiatives such as building a robust talent pipeline. As a result, it improves their engagement and curbs attrition.
6. Formulate individual development plans for each employee
One of the primary reasons for high attrition rates in PSOs is the lack of career development opportunities. Therefore, to retain top talent, managers can create IDPs (Individual development plans) to help consultants pursue their career aspirations and enhance their professional attributes.
For example, in an IT consultancy firm, a software developer wants to improve proficiency in Django. So, managers can enroll them in an online course or facilitate in-house training sessions by experienced developers. This personalized training module increases engagement and lowers their likelihood of leaving the organization.
7. Develop a 360-degree holistic feedback system
Implementing an efficient feedback mechanism helps PSOs analyze each consultant’s performance and identify areas of improvement. It also allows resources to understand their strengths and weaknesses. Moreover, it serves as an opportunity for managers to show appreciation for consultants’ hard work.
A holistic system provides a two-way communication channel that helps PSOs eliminate workplace bias and quickly resolve internal conflicts based on employee feedback. This enhances transparency and fosters mutual trust between employers and employees. As a result, it enhances consultants’ work performance and job satisfaction, reducing the chances of unplanned attrition.
Next, let’s explore how resource management software can help.
How does advanced ERM help professional services firms reduce attrition?
Adopting futuristic resource management software like Saviom can empower service firms to devise a well-structured retention strategy to retain top talent.
- The 360-degree visibility into consultants’ attributes enables competent allocation. When employees leverage their skills, it enhances their performance and motivation, thereby reducing attrition.
- Forecasting and capacity planning features enable managers to forward plan future resource requirements and prevent excesses/shortages of consultants.
- The competency matrix allows supervisors to identify professionals to be considered for stretch assignments and helps facilitate training programs.
- Real-time BI reports like utilization, forecast vs. actual, etc., enable identifying and rectifying over/underutilization, lowering burnout and unplanned attrition.
- The open seat feature helps consultants to apply for project vacancies. When they work on projects of their interest, it improves their engagement and minimizes turnover.
Skilled consultants are the backbone of every PSO. Consequently, it is imperative for firms to cultivate a positive work environment that enhances job satisfaction and contributes to the retention of skilled professionals. By integrating the aforementioned best practices with ERM software, PSOs can effectively manage unplanned attrition and ensure sustained profitability.