Staff Retention

Staff retentionA key challenge for the

Management Consultancysector

Tony Restell, Director & Co-FounderTop-Consultant.com+44 (0) 207-667-6880

[email protected]

Breakfast Briefing -- Discussion Points

• Retention rates – key facts & future trends

• What impact can you expect to have on your firm’s retention rate?

• How to improve retention rates amongst:

• The regular consulting workforce• Early leavers• Long-serving consultants

These findings come from Q1 surveys of 140 management consultancyrecruiters and 700+ employees of consulting firms

Top-Consultant.com Q1 Recruiter survey

We targeted recruiters from the management consultancy industry – both HR managers / HRdirectors from within consultancies and recruitment consultants focused on the sector. 140recruiters took part in the survey

Top-Consultant.com Q1 Candidate survey

We targeted consulting candidates from our Get Headhunted CV database and over 700 tookpart in the survey during the last weeks. Dozens of responses from consultants at each of themajor brands (Accenture, Atos Consulting, BearingPoint, BT, Capgemini, etc.) and a goodspread of respondents from smaller niche firms too

All responses to these surveys were collected online – though no reason to think that anonline audience of consultants / recruiters is not representative of the industry

The median staff turnover rate was 10.3% last year, though this figureflatters the industry owing to the performance of smaller firms

What staff attrition rate has your consulting business experienced in the last year ?

Source: Top-Consultant.com Recruiter Survey Q1 2007

Average = 10.3%

Staff attrition rates during 2006

0-5% of consulting staffhave left in the last year5-10% of consulting staffhave left in the last year10-15% of consulting staffhave left in the last year15-20% of consulting staffhave left in the last year20-25% of consulting staffhave left in the last year25%+ of consulting staffhave left in the last year

A more accurate figure for the industry would be closer to 20% asdemonstrated by our survey of 700+ consultants

What staff attrition rate has your firm suffered in the last year ?

Source: Top-Consultant.com Candidate Survey Q1 2007

Retention is likely to get tougher still - 80% of candidates and recruitersexpect a deterioration in 2007

Candidates: do you believe it will be harder for employers to keep consultants this year given the current market conditions?

0%5%

10%15%20%25%30%35%40%45%

Much harder A little harder No harder Easier

No let-up in staff attrition expected - recruiter responses almost identical to candidate responses

Source: Top-Consultant.com Candidate Survey Q1 2007 & Recruiter Survey Q1 2007

What impact can you expect tohave on your firm’s retention rate?

Achieving best in class retention results in a massive financial upside

Best Practice vs. Worst Case

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

< 1 year 1-2years

2-3years

3-4years

4-5years

5-6years

6-7years

7-8years

8+ years

Length of tenure with employer

% o

f con

sulta

nts

Shortest tenure Longest tenure

A poor employeeexperience drives newrecruits out in less than 1_years on average

A great employeeexperience extends tenureto an average of 3_ years+(and in many casesconsiderably longer)

With firms targeting anaverage cost-per-hire of£5,000 this differencetranslates into a massiveadditional recruitment bill(~£10million for a 1,000strong consultancy over a4_ year period)Source: Top-Consultant.com Candidate Survey Q1 2007

According to candidates it is remuneration, project quality and work/lifebalance that are the key retention factors

Nochange121.98Firm provides a creche / nursery facilities12

Nochange113.21

Firm shows willingness to accommodate consultants who wish tomove to the countryside rather than living in the city11

Nochange103.44Firm sponsors MBA studies10

Nochange93.78

Firm will allow consultants to take sabbaticals / extended leavesof absence9

Nochange83.81

Firm tries to foster great morale / team spirit by organising regularsocial events and team activities8

Nochange74.01

Firm actively encourages consultants to work from home ifdesired7

-244.51Firm manages client expectations to ensure consultants are notexpected to be away on client site 5 days a week6

Nochange54.59Firm offers flexible working hours5

-134.78Firm invests heavily in staff training4

+364.78Firm has a culture where evening and weekend work isdiscouraged3

-115.17Firm involves consultants in the staffing process - allowingconsultants to influence which projects they are assigned to2

+125.42Firm has better remuneration / pay than the competition1

Change2005Position

2007scoreRetention Factor

2007Position

Recruiters report that the reasons being given in exit interviews are verysimilar – remuneration, work/ life balance and quality of projects

0.72%Lack of MBA sponsorship at current employer

5.80%Inadequate staff training at current employer

12.32%Employee feels let-down by current employer

14.49%Desire to move overseas or move location

16.67%Remuneration and promotion policies deemed to be intransparent or unjust

18.84%Evening & weekend work leading to dissatisfaction with work/ life balance at current employer

20.29%Employee wants to work in a larger consulting organisation

23.19%Employee wants to work in a smaller consulting organisation

24.64%Dissatisfaction with quality of consulting assignments being staffed on

30.43%Too much time spent travelling leading to dissatisfaction with work/ life balance

52.17%Career prospects (promotion track) looks more promising elsewhere

55.07%Better remuneration packages on offer at other firms

Source: Top-Consultant.com Recruiter Survey Q1 2007

How to improve retention ratesamongst:

o The regular consulting workforce o Early leavers o Long-serving consultants

Taking steps to improve retention rates amongst the “regular consultingworkforce” may be costly and may just postpone the inevitable

Looks like the most cost-effective measure, butneeds leadership and buy-in from the mostsenior figures in the firm

Consultants want a change in culture so thatevening and weekend work is discouraged andwork/ life balance is improved

Likely to lead to more time on the bench andlower utilisation rates if applied across the firm– but could be selectively targeted at staffdeemed to be “at risk” of leaving

Consultants want greater influence over theprojects they are assigned to

Once applied across the firm can prove veryexpensive – and easily negated by acompetitor’s counter-move **

Consultants want to secure betterremuneration

Issues and costsWhat the “regular consulting workforce”want:

** 51% of firms taking measures to improve retention in last 12 months have raised remuneration

By contrast, overcoming a problem of “Early Leavers” is predominantly aquestion of tackling management problems within the organisation

“Early leavers” cited lack of face-time with management, lack of guidance, poor management /consultant relationships, uninspiring leadership…

29%

15%14%

13%

10%

10%7% 2%

poor managementoffice politicspoor projectsbetter opportunity elsewherepoor career developmentpoor paywork/life balancebetter offer


By contrast, long-serving consultants are most likely to move on becauseof a lack of career development and uninspiring consulting assignments


24%

22%19%

14%

9%5% 4% 3%

poor career developmentpoor projectspoor managementpoor paywork/life balancebetter opportunity elsewhereoffice politicsbetter offer

“Long-servers” cited a lack of actual career progression combined with a perceived intransparency in theirintended career path; plus dissatisfaction with the variety and challenge of assignments being won

Any questions?

Staff Retention

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