A lot has been written, over the past year and a half, about the way in which the pandemic has prompted organisations to rethink their relationships with their employees. Now more than ever, it’s vital that businesses know how to create a working culture in which every employee feels a genuine sense of belonging and purpose.
Historically, the consulting sector has always been one that’s struggled with issues of work-life balance—which makes it all the more important that the sector’s leaders are willing to step up to this challenge and treat the pandemic as an invitation to critically examine their employee value propositions. We sat down with Kumar Parakala, President of GHD Digital, to understand the steps his firm has taken to create a sense of belonging at every level of the resource pyramid.
For context, how challenging would you say it is right now for consulting firms to attract and retain talent?
The talent market is very hot; it's getting increasingly difficult to recruit and hold on to people. There are a lot of projects kicking off at the moment, and consulting firms across the board have had to increase what they're willing to pay in order to hire fast enough to meet demand. There are some service lines and some markets we operate in where average salaries have gone up by as much as 30 to 40% this year.
The days of all the talent you need to deliver a project being located within the same consulting firm at the same time are well and truly gone. These days, consulting firms have to be able to build strong external ecosystems of alliance partners around the world. And those partnerships have to be rooted in mutually beneficial arrangements, so that firms and the other product and service providers they work with can grow alongside each other. Value chains in every industry are becoming increasingly complex and globalised, and consulting firms certainly aren't immune to that trend.
Are there any particular levels of the consulting resource pyramid where finding and holding on to talent is particularly difficult at the moment?
It's the mid to senior level where the talent crisis feels most acute. At the junior level, there's still a steady stream of entry-level candidates and new graduates. Moreover, some of that junior level work can be outsourced by consulting firms if they have shortages. At the more senior level, on the other hand, that option isn't available. There's a huge amount of demand at the moment for great subject matter experts and engagement directors; and attracting those people is one of the toughest challenges most firms are facing.
Within your recruitment strategy, what types of skills are currently top of your priority list?
We're particularly interested in recruiting senior consultants and project managers with strong client engagement skills; i.e., people who know how to have intelligent conversations with clients and who can convert those conversations into tangible mutually beneficial outcomes. A lot of our work now revolves around helping our clients innovate through a process of co-creation, so it's important that the people we're hiring have a strong track record of doing that.
Aside from other consulting firms, what industries do you see as your primary competitors for talent at the moment?
Traditionally, our biggest competitors for talent have been the Big Four firms along with some of the larger engineering firms. But recently, it's become much more common for us to compete against younger, emerging consulting firms. These firms may not have the brand recognition that their larger competitors do, but many of them provide a great working environment for their consultants. I think that the pandemic has been a bit of a boon to many of those firms, because it's forced clients to re-evaluate what they're looking for when they buy consulting services. Clients, on the whole, don't care as much anymore about working with top brands; they want access to great talent, and they recognise that a lot of that talent is now going to small and mid-sized firms.
A lot of consultants I know, even some at the partner level, have left the industry recently to join start-ups. Start-ups have a lot of appeal for people with an interest in entrepreneurial culture and long-term wealth creation; while the salaries you get at start-ups aren't always as high as they are in consulting, that's often compensated for by the equity you can get. Combine that with the freedom and flexibility that you find in those kinds of small, entrepreneurial businesses, and it’s easy to see why so many consultants see it as an attractive career move.
What can established consulting firms do if they want to improve their ability to compete for talent against those smaller, more entrepreneurial businesses?
The attractiveness of a consulting firm to talent is dependent on its ability to create an inclusive culture that fosters a sense of belonging among its employees. After all, we all have a need to feel appreciated by the companies we work for. When the pandemic hit and the market started contracting, some consulting firms were very quick to start downsizing their teams—and I think that did a lot to erode people's trust. At GHD, we not only retained staff, we even managed to continue giving out bonuses. And I'm very glad we did, because it helped us communicate to our people just how much we value them; that we don't see them as simple commodities that we can scale up and down as demand and supply fluctuates, which unfortunately is a common trend.
It's also important that firms recognise what people actually want out of their careers. Many of the people I interview these days explicitly tell me that they don't want to climb up the ladder and become a partner at a consulting firm. This new generation, it seems, has a much more lateral view of career development; they value flexibility, and they want the opportunity to explore other choices in life instead of staying on one track for their whole careers. And I think that COVID has pushed a lot of people even further in that direction and self-reflect on their higher purpose.
So, do you think there are structural changes that the larger consulting firms need to make in order to create that sense of belonging and inclusivity?
Consulting firms have a reputation as being very hierarchical, with partners and senior partners at the top, managers in the middle, and associates at the bottom. The problem with that structure is that the people who are the real engine room of the business—the associates and the managers—often don't get the attention and the rewards they deserve. So, at GHD, we've tried to create a culture that doesn't feel quite so hierarchical, one where people can freely interact with their colleagues at every level of the business. As an employee-owned business, one of our biggest priorities has been to create a feeling that we're all on the same side—we don't want to be the kind of company where, as soon as something goes wrong, you immediately start looking for someone else to cut down.
One way to create a sense of belonging among your employees is to ensure that you're giving them interesting and varied work to do. Consultants don't want to be doing the same thing all the time. People want diversity of experience in the work that they do, and they want to presented with the opportunity to engage in truly creative thinking.
What impact do you think the pandemic has had on the ability of firms to create a supportive and inclusive working environment?
I think that we're at a tipping point in the consulting industry now where firms are finally going to have to do something about the grind. It's not uncommon that consultants, even when they're contracted to clients on the assumption of a nine-hour workday, end up working closer to 14 or even 16 hours. And the pandemic has made the problem even worse by putting more strain on people's mental health and by forcing a convergence of the personal and the professional sphere. People feel they're not being properly compensated for the hours they put in. So, it's no surprise that so many people are looking for better opportunities at firms that aren't going to take undue advantage of them—or are choosing to leave the industry altogether.
What responsibilities do you think leaders within consulting firms have when it comes to solving these problems and promoting that sense of belonging you’re talking about?
There are a number of ways in which senior partners in the consulting sector are going to have to change their approach to leadership in a post-COVID world. Values like trust, compassion, and transparency are all going to become a lot more important. At the same time, there will be more pressure for leaders to be agile in responding to new challenges; they have to be engaged with the business, they can't just sit there and watch from afar. And perhaps most importantly, leaders will need to be more conscious of the duty of care they have for the people underneath them.
For consulting firms who have a partnership model, the need to continue maintaining partner compensation levels puts a huge pressure on the organisation, which is what leads to more junior people being overworked and leaving the industry. The problem, in my view, is that too many firms focus on the short-term. They have spent all their time managing their quarter to quarter profitability and think less about long-term sustainability. Ultimately, if the business model of consulting is going to last, there will need to be a rebalancing of the financial equation in favour of employees.
What steps have you taken to put this thinking into practice within GHD Digital?
We're in the process of expanding the sources of talent that we recruit our graduate hires from, and we're also doing a lot of work to make sure that we build a strong relationship with those graduates from the first day they join our firm. In a post-COVID world, it's going to be more important than ever for firms to create a sense of belonging among their junior analysts; good financial compensation isn't enough to generate commitment and loyalty anymore. One of the best ways to create that sense of belonging is by engineering situations in which those new hires have the opportunity to work closely with even the most senior people within the business.
One of the things I'm proudest about at our firm is the culture of collegiality, respect, and teamwork we've been able to create. Our goal is to be a non-hierarchical organisation in which anybody feels free to interact with anybody else, right up to the executive leadership level. The other day, I was interviewing a candidate who was a partner at one of the big firms. I asked him how many times he'd ever spoken to their CEO; he said he'd been there five years, and only spoken to the CEO one time when they bumped into each other in the lift. In the new post-COVID world that's emerging right now, employee retention will depend on active leadership engagement to understand and empower them.