Consider yourself warned.It’s easy to be lulled into thinking that just because voluntary attrition is low today, attrition strategies can become a low priority. However, the truth is that steps firm leaders take today in handling layoffs and other potentially culture-damaging decisions could affect staff retention for years to come.
According to a recent survey of more than 6,000 consultants conducted by
Consulting, more than half of consultants below the manager/director level plan to leave their current firm within the next four years and more than one-third plan to leave within the next two years.
In other words, when demand finally returns, firm leaders that haven’t taken steps to keep their best consultants engaged and committed to their firm could find themselves with a severe talent shortage. If this sounds familiar, it’s because it’s the same problem many firms created for themselves during the 2001 to 2004 downturn.
“Just like during the last downturn, there is also a surplus of consultants who are delaying leaving their firms for fear they will not find another position,” says Steve Crandall, Director of Kennedy Information Research, the advisory and custom research arm of
Consulting’s publisher Kennedy Information. Once the economy improves, the profession will likely experience a spike in turnover.
One of the biggest mistakes firms made during the last downturn was that they failed to consider how their decisions would affect their staffing mix long-term. There was little to no junior-level hiring, most of the layoffs occurred at the bottom of the pyramid, and once the economy improved there was a disproportionate spike in voluntary attrition at the junior-most levels. Fast forward five years and many firms are now struggling with a void left by those consultants that would now have a minimum off five to eight years of experience.
“The worry is that the actions we take today will affect whether it’s 15 percent to 20 percent [voluntary attrition] in 2010 and 2011 or more like 35 percent to 45 percent because we abused their goodwill,” says Dave Kuhlman, a partner at Axiom Consulting Partners, a firm which advises professional service firms.
“It seems to me that firms are at a reflection point right now regarding their 2010/2011 attrition, whether it will be ‘normal’ or we’ll see a spike that will live with us for a very long time as the hole passes through the leverage model.”
Consultants’ self-reported attrition expectations should be read as a warning that a significant share are predisposed to leaving their firm and loyalty must be earned every day. And given that projected attrition rates only go down gradually from staff level to staff level means firm leaders can’t coast on the value proposition to staff.
The data also highlights that there’s a baseline of 20 percent to 25 percent of highly experienced staff (i.e., partners/VPs and directors/managers) that should be considered “at risk” of leaving their firm. This is also a potentially scary number because they are the key to most firms’ leverage model.
