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Ultimate Guide to KPIs for Consulting Firms
Discover which KPIs your firm should focus on to measure business, talent and project success.
Improve Your Performance
67% of consulting firms say they have set goals and objectives to increase profits. But how do you know if you’re making progress toward these goals? The Ultimate Guide to KPIs for Consulting Firms provides a comprehensive resource for tracking and optimising performance. It offers insights into relevant and useful key performance indicators (KPIs) for your business, along with practical guidance on setting, measuring and improving those KPIs.
Profitability KPIs
The consulting firms we surveyed confirmed that business growth and profitability are a focus for them, and they are considering several different strategies to help them meet their objectives:
- 64% are planning to carry out more projects with a greater number of clients to support growth and/or do more with existing clients to increase their profitability.
- Many firms are planning to focus on controlling the ever-increasing cost of running their business to protect their profit margins including:
- Reducing expenses (31%)
- Increasing control of costs - what the firm purchases and approve (30%)
- Balancing employee/cost ratio (28%)
To meet growth and profitability objectives and goals it’s important to know what success looks like, and if you are making the right level of progress to succeed. We’ve identified several KPIs you can monitor to track progress in this area.
Project Delivery KPIs
According to the 2023 SPI Professional Services Maturity™ Benchmark report, on-time project delivery went down by 5% and billable utilisation by 4% in 2022. At first glance, this doesn’t seem too drastic although it could be the beginning of a potential trend that consultancies need to manage before it starts to have a real impact on their profitability, reputation, client retention and project win rates.
When it comes to day-to-day project management best practice, the expectations of what constitutes a successful project haven’t changed. Projects need to be delivered on time, and within budget and scope, to ensure a healthy cash flow, customer satisfaction, repeat business and an excellent reputation in your industry.
There are some essential project KPIs your firm should be measuring that specifically focus on the success of your project delivery, such as project overrun, projects on schedule and effective billing rate.
Employee Retention KPIs
Talent management is a hot topic for consulting firms. In fact, 61% of consulting firms surveyed for the EMEA and APAC Deltek Clarity Report confirmed that attracting and retaining talent is one of their top priorities.
The same percentage of firms are planning to grow their teams over the next few years. To do this, they need to have a robust strategy in place to attract and retain talent across the business and be able to monitor progress towards their goals.
There were several talent management challenges identified by the consulting firms we surveyed that need to be considered when identifying and tracking relevant KPIs:
- Difficulty in attracting and retaining talent (41%)
- Lack of work/life balance (39%)
- Lack of employee engagement (31%)
- Resignations/employee churn (33%)
If you have plans in place to improve how your firm attracts and retains talent, there are some priority KPIs that you can measure to ensure that you are on track to meet your staffing and resourcing goals.