Today’s top professional services firms manage talent differently than the average organization and, by extension, are having a positive impact on engagement, growth, and culture within the broader field of Human Capital Management.
So, when it comes to managing talent, what exactly makes project-based firms different than other types of businesses? In general, professional services firms:
- Understand that their workforce is a tremendous differentiator in the marketplace
- Are in tune with the skills and competencies of employees already on their teams
- Focus on the end goal of building high-performance, cost-effective teams
- Recognize the necessity of investing in the technology needed to optimize their work force
Even in industries not traditionally focused on project work, there is a shift toward project-based hiring and the use of freelance or contingent workers. This trend isn’t fully driven by employers; many workers also prefer a non-traditional style of employer-employee relationship. While this does create a certain amount of pressure on organizations to accommodate non-traditional work arrangements, it also offers a fantastic opportunity to change the way we think about human capital management.
If your business is not yet accustomed to trends like project-focused hiring, skills tracking, and post-hire development, you can look to professional services firms to better understand how to incorporate these trends into your company’s human capital management strategy. If you haven’t developed and implemented a human capital management strategy yet, you can learn from the professional services firms that have already invested in Human Capital Management.
Managing Talent in Today's Project Based Firms
Here are three areas to consider if you want to implement a game-changing human capital management strategy:
Maintain Skills Repositories
Simply put, a skills repository is a comprehensive list of skills and competencies possessed by your workforce. It can include predefined skill levels and categories that can help your organization to plan future workforce needs. Project-centric firms use technology to maintain skills repositories in order to easily match employee skills and competencies with forecasted needs. Although other industries don’t need to be as concerned about matching talent to specific projects, skills repositories could be useful in any industry or organization.
You might be surprised what skills already exist in your workforce. Many members of your workforce have enjoyed success in different careers and industries and, as a result, possess dormant skills. A skills repository could help your business identify internal candidates for open positions and optimize their current workforce by capitalizing on the full range of available skills and competencies.
Although we might wish otherwise, the annual performance appraisal process remains alive and kicking. Too many organizations are still mired in this time-consuming and ineffective method to manage performance, while other organizations have abandoned annual appraisals but haven’t built a new model.
Professional services organizations are more likely to use shorter feedback cycles that match project work. When supported by talent management software, these cycles are extremely effective. Conversations can be recorded and referred back to, ultimately helping managers build relationships with their direct reports, track goals and log milestones. Employees in project-based firms may have measureable targets related to specific projects, but managers and employees can also work to create longer term goals during related discussions.
The gig economy, known for temporary short-term engagements, is growing and as more workers opt for non-traditional work arrangements, it is entirely likely that contract work will become the norm. Research suggests that employers who hire specifically for projects and are effective at managing contingent workers struggle less to offer competitive compensation.
Why? It could be that a reliance on alternative employment relationships helps organizations hit the compensation crunch less often. Although not all businesses should try to focus entirely on project work, being open to alternative working arrangements could have a significant impact on your organization’s ability to offer competitive compensation when you need it most.
Out of necessity, project-based firms have learned to integrate human capital management into business strategy. They work to optimize the skills and competencies of their workforce to increase the value of their human capital. Project-based firms have come to realize that engaged employees are the key to delighting clients and achieving peak profitability—lessons from which we can all learn.
About the Author
Amy Champigny spent more than 15 years working in finance and accounting and most recently she served as Director of Finance for a management consulting group. In 2015 Amy implemented a Deltek ERP and transformed the finance function in her firm.
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