By Brett Alston
It doesn't matter whether you're the general manager at a thriving company or a recent MBA graduate—you're doing what you must to live through this down economy. In recent months, the U.S. unemployment rate topped 10 percent—the highest in over 25 years—and seems to spare not even the well-accomplished.
Job losses are wide and deep, with some management-level workers contributing to this statistic having recently lost their jobs as companies look to reduce costs in the face of economic realities. On the other hand, some managers are embracing this statistic, using it as incentive to increase productivity and devote longer work hours. But for the majority of decision makers at large corporations, mere utterance of the word "recession" can lead to drastic measures such as budget cuts, frozen salaries, and layoffs—therefore deepening the root of the problem.
For many businesses today, this depressed state of the union has caused a domino effect —with one industry after another downsizing as a so-called "necessary precaution." Due to cutbacks that span many industries that make up our economy, the consulting industry is seeing a mirrored minimization of firms who follow the traditional Big 4 model. These firms' "up or out" policies make layoffs the next likely step for hundreds of consultants sitting on the bench waiting for their next engagement. In this situation, the bar for a promotion is raised and those who don't make the grade are vulnerable to being cut.
However, an interesting dichotomy in the consulting industry has emerged due to the current economic times. While these multi-national giants are caught in the cascading effects of a down economy, small- to mid-sized firms are akin to salmon swimming upstream—going the other way by adding new, talented consultants, experiencing growth and laying the foundation for a strong business for when the economy recovers.
These firms have taken a closer look at the industry landscape before falling prey to widespread fears, understanding that our industry is prone to cyclical changes and is likely to recover, potentially sooner than the broader economy does.
In fact, according to the Bureau of Labor Statistics, management consulting is the top industry for employment growth through 2016, projected to increase 22 percent from the 2006 benchmark. This statistic is attributed to the fact that 98 percent of companies utilize some sort of contractor work for strategic management functions and that the business and government sectors rely heavily on our services.
In light of this optimistic industry outlook, many small- to mid-sized consulting firms see this downturn as an opportunity—biting the bullet and hiring more consultants in order to set them up for future success. This method of anticipating robust growth in an otherwise stagnant job market is the result of a method we have coined "Picking the M&M's from the Trail Mix." While the big firms are leaning towards layoffs, firms such as ours are targeting the "M&M's" of the bunch—using a distinctive recruiting strategy to identify exceptional talent and hand-select only the best of the best amongst thousands.
How to Pick the M&Ms
Successful firms now understand that growing the business requires hiring only the top notch consultants with proven accomplishments—not an assemblage of consultants from which only a handful will shine. For every 10,000 consultants at larger firms, there are bound to be several thousands that slip through the hiring process as a result of hasty recruiting practices. The real weeding then occurs during times such as these, where high economic pressures put consultants' capability to the test.
But don't discount the consequences of a bad hire as just another lesson learned—each can end up costing the firm upwards of $30,000, and that's a conservative number when you're calculating factors such as costs to advertise, HR staffing time, the cost to interview, time and cost of performing background and referral checks, management's time for training, productivity losses, damage to the brand and low company morale. Multiply that by three bad hires and you've cost yourself the revenue from a client contract. To protect the company's assets from this costly feat requires careful selection.
So how does a firm attract and retain the best talent out there? We've found that these three simple steps are the key to optimizing these lean times for greater success ahead:
Step 1) Find them.
Don't expend time and resources on consultants who don't fit the bill. Seek out and hire a core of great consultants with a proven track record of execution and delivery so as to avoid future pitfalls. Many candidates can sound great on paper, but it takes a proactive recruiter to seek out that diamond in the rough.
Make connections with consultants who are motivated to look around corners and identify hot industry trends, who are savvy in their careers, but do not receive adequate challenge in their current positions. Realize that in today's highly connected world traditional recruiting methods may not cut it. Don't be afraid to encourage your recruiters to use the latest in social media and networks to find talent.
Step 2) Enable them.
Once you have identified the talent and brought them onboard, immediately prove to them how your firm's approach is different than their past experiences. Provide them with a true sense of empowerment to implement the changes that they have been dreaming about for years as they churned through projects with larger consulting firms.
Offer the internal resources and support necessary for success, and operate the business in a fashion that allows for decision-making independent of day-to-day touch points with management. Consultants are unlikely to have enjoyed this much freedom at larger firms no matter how senior their position.
Step 3) Reward them.
Provide ongoing incentives to advocate the high caliber of client service you strive for as a firm and reinforce their (hopefully) innate desire to deliver world-class solutions. While financial compensation is important and cannot be overlooked, remember to use other incentives such as work-life balance options, off-the-cuff surprise gifts (costlier isn't always better here—thoughtful and quirky can be more effective), opportunities for recognition and inviting their feedback as part of your firm's ongoing growth strategy.
With this formula, success in client engagements is dramatically increased and project satisfaction of your consultants rises to all time high levels. By fulfilling the needs of both client and consultant, mid-sized firms can capitalize on a difficult market, ultimately building a core of passionate, skilled professionals for better times ahead. The industry is rapidly changing around us, with these difficult economic times only serving to accelerate change. This change is inevitable. Will you be ahead of the curve?
Brett Alston is a managing partner and co-founder of Revel Consulting, a mid-sized consulting firm based in Kirkland, Wash. Revel provides business solutions across industries such as IT, software, insurance, retail, telecom/wireless and engineering. In 2009, Revel was named to Inc. Magazine's Top 500 list as the fastest growing private company in Washington State, the fastest growing company the nation's "Business Services" sector and the 34th fastest nationwide.
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