The share of directors/managers who plan to leave their current firm in the next two years appears to have almost doubled since the same survey was conducted last year.
According to an initial sample of about 200 consultants for the 2011 survey, 45 percent of managers/directors plan to defect within two years. In the Summer of 2010, only about one in four (23 percent) directors and managers said they didn't think they'd still be working for their current firm in two years, which was up from 17 percent when the same question was asked in 2009.
Firm leaders should also brace themselves for an increasingly large surge in voluntary attrition among senior/experienced consultants. The share of consultants at that level that plan to leave within the next two years has climbed from 24 percent in 2009, to 25 percent in 2010, to 39 percent in 2011, again according to initial survey findings. Now it's possible that by the time the full data set is compiled and analyzed this summer, the numbers may come down a bit. But, if these numbers are correctly identifying a trend, firm leaders wouldn't be wise to wait that long before acting.
It would certainly make sense that these pre-partner consultants are especially vulnerable to defections. First, during the most recent downturn, firms tended to elect relatively small partnership classes. As a result, it has taken longer and longer for directors and managers to make partner. And when fewer directors/managers are promoted, it also takes longer for senior/experienced consultants to be promoted. When consultants feel underappreciated, those feelings can easily lead to resentment and mistrust. And it would not be surprising if some of that mistrust is what we're seeing in our initial survey findings.
Second, there's high demand for staff at this level from inside the profession. During the prior downturn (from 2001 through mid-2004) there was very little junior hiring, the vast majority of layoffs occurred at the bottom of the pyramid, and when the economy improved in the latter half of 2004 and into 2005, the largest spike in voluntary attrition occurred among the more junior ranks. Fast forward six to 10 years and those that left or were never hired during that time would now have been at the senior/experienced consultant and director/manager level—leaving many firms significantly shorthanded at this pre-partner level.
What's the Cost of Inaction?
Even though we're seeing these trends increasing nationwide, it doesn't mean it will affect your firm. You could wait until you start to see a significant uptick in attrition rates. But by then, the costs could be significant.
Each consultant you lose costs you money, including:
- The lost productivity of someone who has already mentally checked out;
- The separation costs (exit interviews and other administrative expenses);
- The replacement costs (advertising or executive head hunting fees to recruit a replacement, extensive staff interviews and background checks, lost productivity time while the position remains open, hiring bonuses and relocation costs, etc.);
- The lost productivity while the new hire gets up to speed;
- And, the lost client-consultant continuity or loss of client relationship altogether.
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