Why High Talent Turnover Is the Greatest Threat to Your Consulting Firm — And What You Can Do About It

20-May 2022
MGL0816 1
Chelsea Williams COPYWRITER

Bad news can make us want to check out. And there’s been a lot of it lately.

The pandemic, high inflation, the Great Resignation. What now? 

Don’t worry. This isn’t another scare-tactic story. It’s an invitation to step back from the inflammatory news feed and think objectively about the core trends directly impacting your business.

Which economic circumstance has hit your bottom line most severely? And which can you respond to immediately?

In Accelo’s experience helping professional services businesses thrive through these global challenges, we’ve learned the answer to both questions is often the same: high employee turnover.

We encourage you to pause and evaluate:

The Destructive Potential of High Employee Turnover 

You undoubtedly understand the frustration of losing employees, but when was the last time you measured the effects?

Frightening as it is to face a negative reality, it’s foolish to pull the proverbial wool over your own eyes. Let’s conquer your fears together. 

First, we’ll explore the very real consequences of frequently changing your staff.

Revenue Leaks

The most obvious cost of turnover is the investment you make in hiring and training replacements. On average, employers spend $4,000 per new hire. That figure covers the basics of recruiting and onboarding. It can be higher if you offer perks like signing bonuses, which many employers are doing to stay competitive.

Even if your firm has only a few full-timers who manage a team of contractors, it’s expensive to acquaint new consultants and leaders with your business’s values, systems and expectations.

A Disconnected Team

In a collaborative environment, solid camaraderie is key to success. You could easily underestimate the negative impact of regular turnover on your team’s ability to gel.

While it’s tough to measure a lack of connectedness, there are a few metrics related to this specific struggle:

  • The number of days, weeks or months your team must cover for an unfilled role
  • The number of days, weeks or months it takes for a new employee to start contributing billable work
  • The number of hours it takes your senior employees to review — or duplicate — a new employee’s work before they’re comfortable

Employee loss is even more disruptive to a remote team because it takes longer for people to become familiar with and trust each other from afar. 

Subpar Skills — And Client Relationships

When you lose a great employee, there’s no guarantee you’ll find someone to replace them. If that person was your star tech-savvy team member or your best presenter, it could prove difficult to come across a candidate with comparable skills immediately. 

What’s more, if your clients have become accustomed to the level of service your existing team provides, it will be evident to them when something changes. They may also have established relationships with your consultants and be wary of anyone new. If clients choose to back out of contracts because of upheaval in your business, you could experience a devastating blow.

Why Consulting Firms Are Losing Employees

You can see why paying attention to talent turnover is essential, but what’s driving people to leave?

Here are some top reasons workers quit in 2021:

  • Dissatisfaction with managers
  • Not feeling valued
  • Low pay and lack of adequate benefits
  • A desire for work-life balance

Consulting as an industry is feeling some additional pain. The lack of travel during the pandemic and the high-stress reputation of the industry is no longer attractive to a new generation of MBA grads.

It could be hard for your firm to respond to workers’ needs for engagement and flexibility as you simultaneously try to meet the high demand for consulting services. Drowning in client requests could mean requiring more work per consultant — thus, making for a far less attractive set of job responsibilities. Work-life balance may be merely a dream at this moment.

Add these components together, and you’ve got a dire situation that can seem insurmountable. But we promise it’s not.

How To See Gains in Retention 

Sure, there are current trends in employee turnover that are beyond your control. However, you can impact consultants’ desire to stay loyal to your organization.

Find Loyal Employees Now

  • Be deliberate about who you want to attract. You should have a profile in mind of who you and your current team want to work with. Brainstorm together to write fresh job descriptions that would entice those types of people.
  • Switch up your recruiting strategy. Job candidates today have a ton of viable options. They need to be enticed to apply, and having to study for a traditional case interview won’t get them excited. Get creative about evaluating prospective consultants and use the review process as an opportunity to demonstrate your company culture.
  • Ask questions of candidates. Put the ball in an interviewee’s court. What environment are they looking for? Considering their expectations rather than just their skillsets will help you determine if you can make them happy in the long run.

Adjust Systems To Hold Onto Your Best People

  • Get comfortable with tech. Today’s consulting clients expect you to have a tech-savvy team that can help them up their business’s performance. But having the right software is also about supporting your employees. A tech-based paper trail can help you identify problems and solve them before frustration ensues.
  • Automate the mundane. Make your team more efficient with consulting-focused tools and they’ll want to stay. If you’re not automating daily tasks, you’re probably already behind other consulting firms that could be recruiting your top talent.
  • Create a human culture. It may take some time, but investing in your employees’ well-being pays huge dividends. People expect you to care for them holistically when they dedicate their time to helping your business succeed. Establish policies for paid time off and professional development, and require regular touchpoints with managers.  

Want more ideas for improving your rate of consultant retention in the short and long term? Download our latest guide.

The People Factor: Retention Strategies for Consulting Businesses

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