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Consulting firms worldwide have had a lot to contend with over the last few years with the global pandemic and resulting great resignation, plus widespread supply chain disruption. Maintaining growth during this period wasn’t easy, but some consulting firms succeeded. What did they do differently?
The Hinge Research Institute surveyed 455 consulting firms across the globe to understand the most pressing challenges they’re facing, and the tactics they’re using to mitigate them. Eric McAdam, Vice President of Global Consulting at Deltek discussed these findings, and what they mean for Australian consulting firms in a recent webinar in conjunction with IMC Australia: “How Consulting Firms Win – Unlock the Four Key Advantages for Growth”. Eric was also joined by Ross Lawler, CFO at Cordelta, and Michael McLean, Managing Director at McLean Management Consultants.
Key Challenges Consultancy Firms Are Facing
As part of the survey, participants were asked what challenges they’re expecting to face over the next three to five years. Below are some of the most prevalent:
Unpredictability in the marketplace
Perhaps unsurprisingly – given the global disruption of the past few years – ‘unpredictability in the marketplace’ came out on top with 40.2% of respondents naming it as a key challenge. However, this is lower than last year’s survey, where 48.9% of participants said the same thing.
This finding could show that global disruption has become the new normal. We know there isn’t the same level of certainty as there was five years ago, so now we’re learning to become more adaptable and quicker to recognize change and react accordingly.
A shortage in top talent
Of the seven challenges highlighted in the survey, only one had seen an increase in prevalence compared to last year: ‘A shortage in top talent’. This increased from being seen as a key challenge by 32.4% of respondents in 2021, to 34.2% in 2022.
Although this is only a small increase, it does reflect a key trend: the ‘Great Resignation’ has left a gap in the talent pool for consulting firms. And these firms need to attract and retain new employees from younger generations as their workforce ages and current employees approach retirement.
Client’s desire for customization and flexibility
While consulting firms are looking for ways to increase efficiency by focusing on areas such as automation and artificial intelligence (AI), clients are voicing concerns about getting maximum value from the services that they pay for.
Clients don’t want cookie cutter solutions; they want an approach that is unique to their business and situation. They want to be sure that the results they are getting don’t suffer due to their consulting firm’s desire to maximize profits. This is changing the way that they purchase services, for example more focus on value added pricing. As a result, 32.7% of respondents see this as a top challenge over the next 3 – 5 years.
Learn the Secrets of High Growth Consultancies
Hinge High Growth Study: Consulting Edition
The Top Trends and Topics Worth Investigating
As well as looking at the challenges of the future, participants were also asked what trends and topics it would benefit their firms to learn more about in the coming year.
The top two answers at 33.8% and 32.6% respectively were ‘workflow and process automation’ and ‘big data and analytics’. To get the most out of digitalization, it’s vital to first make sure you understand your current processes and the areas that could benefit from automation the most.
Increasing the amount of automation in your firm will improve everyday task efficiency, remove manual error, and free your people to focus on adding strategic value to your business.
Your People Hold the Secret to Your Growth
Beyond digitalization, McAdam, Lawler, and McLean discussed some of the key challenges raised by the report – including how companies must make the best use of their top talent to stay competitive and grow.
“Digital and automation is not the only answer,” says McAdam. “It's a definite foundation. It will help you with demand generation. It will certainly help you with managing costs and simplifying your processes. But consulting's all about the value you deliver from your people and your thought leadership.”
“I think it really is around freeing up the people who are delivering the work and who are out there engaging with the clients,” explains Lawler. “A lot of our work and pipeline does come through those strong, personal, trusted relationships. And so, to be able to give our people the time to build those and retain those is very important for that pipeline.”
“It’s about knowing what you're really good at, so that you don't try to be all things to all people,” adds McLean. “Because as you said, clients are looking for somebody specific. They want the people who know their industry. They want the people that know how their processes work, but also to have that sage advice about what would be appropriate to explore, to improve that business.”
Learn More from the Full Discussion
We’ve covered the importance of digitalization and making the most of top talent in this blog. But the full survey highlighted even more challenges, like the need for new skills, and growing trends to help overcome them, such as making the most of AI and the Internet of Things.
How Australian Consulting Firms Win
Unlock the Four Key Advantages for Growth
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