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The Awkward Hourglass Shape of Consultancies

by Jon White October 15, 2018
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​This might seem like a strange title for a business blog, but this is something that has been a continuous problem for all of the professional services companies and indeed SMEs that Freshminds have worked with over the years. It seems to have been particularly prominent recently and whether this is simply due to a candidate-led market or wider macroeconomic conditions it is hard to tell, but it has always been present and there is sadly still no quick fix to overcome it.

What I am referring to is a tricky problem that is faced at some point or another with altering severity by every consultancy and small growth business regardless of whether they are the biggest names in strategy and management or a 10 person boutique. I am referring to the awkward middle stage of any consultant’s career and how it can be incredibly difficult for consultancies to hire at this experience level and retain both new and homegrown talent. It is at this level where it can be problematic to move people from consultancy to consultancy despite the obvious need for it evidenced at a huge range of different businesses.

I have lost count of the number of businesses that have said to me something along the lines of: “It's easy for us to hire at milk round and get fresh grads into home grow – we have that level sorted”

Similarly “We’ve had no trouble attracting a new partner across from ‘x’ as they were keen to get the impact that is available in a smaller business.”

Either end of any given hierarchy is relatively speaking easy to do from a recruitment perspective, but for a host of reasons, it gets exponentially more difficult as you approach the median. When you start talking about Consultants, Senior Consultants, Principals, Directors, Engagement Managers, Managers, Senior Managers, things get more and more difficult.

The problems are manifold when this hourglass begins to form and can have surprisingly drastic effects on a business which ultimately at the extreme end can drive a business under. The most obvious and telling of these problems is the pipeline catch 22, when you have a business with lots of Junior Analysts, Junior Associates and Junior Consultants and a relatively large amount of Founders, Partners, MDs but only one or two people in the middle. It is at this point when sales pipelines can really begin to creak.

The Scenario:

Senior people end up having to dip back down the value chain to work on delivery and management tasks that in reality, they may have left behind years before in their career. Mentoring and managing the junior bracket all of a sudden take up more and more time, on top of this the senior pool end up having to work the day-to-day delivery of projects.

This is much more than a casual annoyance for the senior team as the senior team tends to be the people who should be winning business. When a small company spends too much senior time looking after the day to day and not pushing out and growing the business then sales inevitably start to dip.

If not arrested in time, the future pipeline of work can even dry up altogether. This can cause a flip-flopping of effort and result in a spiralling situation. The senior people then switch to finding new clients again and by force having to neglect the management and delivery and subsequently flip back again and so on. Thus an incredibly spikey boom and bust sales cycle appears, where there can be very valid capacity orientated reasons to actually turn down new work that previously they had been very hard to win, which of course is a deeply difficult situation. This can often mean that the few remaining middle management you do have, become very disenfranchised and overworked and can leave, this can then sneak up and down the value chain thoroughly compounding the problem.

So for this reason both consultancies and in general small businesses often come to Freshminds looking for help to find that middle bracket, but it is not always easy!

But why is it so difficult to find people at this ‘middle’ stage in their careers?

Here are some of the core things that are circulating through a prospective candidates mind when considering this potentially drastic step into another consultancy or SME:

  • Tired of consulting in general: After 3-5 years in consulting there is a usually a rather obvious attrition to in-house/industry roles or to start-ups and SMEs. For all the usual reasons this is a classic exit point and convincing someone who is just not feeling the joy of consulting anymore to move to another smaller consultancy that they may not have heard of can be a very difficult sell.

  • Internal network: If you have spent over three years in your current consultancy you will have invested some if not significant amounts of time in building a network with senior colleagues and this senior mentoring web of contacts, if used properly, can be incredibly powerful when looking at a promotion or even simply being staffed on projects you enjoy. To start this from scratch in a different consultancy/business where you know no one is seemingly a thankless task.

  • Your cohort: Consultancy work can be a lot of fun and if you have joined with a strong cohort of like-minded individuals that you get along with then the prospect of leaving these friends for a cold new business where you will be an outsider again is not a pleasant one.

  • Work life balance: At circa five years into a consultancy career a lot of people (though by no means all) are at an age and stage of their life where the sometimes gruelling work life balance simply does not fit with their personal situations and are therefore looking for more flexibility to fit around family and life in general. It is hard to stomach a move to a new business where to shine and be appreciated you know you will have to be fully committed to prove your worth and really put the hours in.

  • Disparity on salaries and the simple unknown risk of package and bonus: If you have been in your current business for a few years you know what to expect, you know how performance relates to progression and reward, and you know what you need to do to progress. Moving to another place you are relying on the word of a recruiter and a hiring manager and any anecdotal evidence you can gather – this can seem an unnecessary risk from the outside looking in.

  • Titles: This may sound relatively unimportant, but moving from a business where you are a Principal or Senior Manager to a role that is technically more senior, but where you get called Consultant does have a psychological impact, similarly responsibility levels don’t always scan across businesses you might be managing a team of 10 and then drop down to 1 or 2 which can feel like a step backwards for some.

  • Specialisms and clients: You simply might love working for a specific client or focussing on a particular sector so why would you move to a consultancy that you don’t have that exposure or indeed expects you to help build it from scratch, there are a lot of promises thrown around with this, but they are often viewed with a healthy dose of scepticism.

So what can be done by a consultancy, big or small, or an SME to improve the chance of finding these sorts of mid-range consultants to join and retain.

  • Well, thought out long-term on-boarding; might sound obvious, but so many companies get this wrong. It can take months to get somebody sensibly and properly up to speed with how your company likes to work. On the surface, the work might look the same, but every business has a slightly different way of doing everything from the pallet and font you can use on slide decks to how many croissants it’s OK to eat on a Friday morning! Giving people the time and space to come around to these things rather than expecting them to work just like you from the outset is incredibly important irrespective of any commercial deadlines that are looming.

  • Not setting the bar too high at interview; on a similar note to the above, you simply cannot expect someone from a different business to perform to the same standards as someone from your own business. They will simply not have the same way of phrasing and will always seem worse compared to people already doing the job. The number of interviews we have seen fail thanks to a negative comparison to someone in-house is marked and essentially unfair!

  • Understanding the need to flex on salary and experience; this is always a contentious one, but a sympathy to the fact that extra encouragement will be needed to get people over the line and overcome the psychological hurdles of upping sticks and moving company. Avarice is a useful tool if used cleverly in this instance and an extra few thousand pounds can go a very long way even if in the long term it does not seem like a big deal. On the flip side of this, we see a lot of people discard out of hand the other benefits on offer as essentially worthless – hammering on about the free fruit and half hour off on a Friday mean very little in the great scheme of things and are fooling no one, salary is a different matter altogether! Even shares can be disregarded out of hand as their tangible impact is minimal when a candidate knows nothing about them and has no frame of reference.          

  • Being able to clearly differentiate from others;  having a USP and knowing how to describe and indeed sell it – saying you have a better work life balance will not necessarily cut it, saying you have a flat hierarchy, have bean bags or table tennis tables, none of these things will work. You need a sector or functional specialism that people want to be involved in to stand out from the crowd. If you don’t have this be realistic and upfront about this and win them with charm!

  • Actually taking the time to sell to and get to know the candidates; again may sound obvious, but in the current job market candidates often need a lot of selling to. If you are trying to make someone take a difficult step and they don’t feel loved it won’t work. You need to mitigate the lack of cohort/friends. So take the time to have lunch, drinks meet the team sessions. A cold start can feel exponentially worse without these at the mid-range as grads and Senior candidates expect it, but they might not. Use gardening leave and notice periods to good effect get people involved in events before they start and generally let them know you want them on board!

  • Bridging gaps with an Interim resource: Sometimes when the pipeline problem has become very acute you end up with a very leaky bucket with valued members of the team leaving for all the reasons outlined previously. Sometimes a simple physical presence of people in a business, even if they are part-time resource, can help steady the ship. Bridging those sometimes drastic capacity shortfalls with the interim resource can, at a relatively low price point, give the breathing space necessary to find the longer-term solutions without letting the day-to-day quality of work dip.

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