of respondents state expertise as the main differentiator amongst competition
Leaning into Leadership
The dizzying pace of change in professional services requires HR executives to undertake more prominent roles in leadership; it’s no place for shrinking violets. More than any other industry, services firms succeed or fail based on how well they acquire, retain, and manage talented workers—and HR plays a vital role every step of the way.
When you’re dealing with high-powered superstars every day, credibility matters. But how does HR establish credibility? Lucy Adams, the CEO of Disruptive HR and former HR director for the British Broadcasting Corporation, pokes fun at her profession:
“Worrying about our credibility can be a bit of an HR obsession. We worry that we still haven’t got that seat on the Board. We worry that our opinions aren’t listened to. We worry that we’re perceived as purely transactional. We worry that we aren’t taken as seriously as Finance. We worry that we worry too much.”3
Rather than trying to impress peers with academic degrees and HR jargon, Adams offers proven strategies for closing the credibility gap:
- Eliminate 1980s processes. Replace annual performance reviews with continuous feedback programs. Ditch those nine-box grids for career conversations. Send the message that human resources can innovate, not just slog through the same old checklists.
- Be partners, not parents. “We adopt a parental role that either sees us taking on the job of compliance officer to make sure employees are kept in check, or nursemaid where we do the difficult stuff for managers.” Instead, treat employees like adults. Help them grow their capabilities—and make their own decisions.4
- Do few things but do them well. Instead of ambitious five-year plans with dozens of initiatives, concentrate your efforts on a few ideas that deliver tangible value to the firm, and execute them relentlessly. Here’s one idea: Continually evaluate and update workplace policies to appeal to younger and female workers—and use those innovations aggressively in your recruiting efforts.
The professional services industry is a numbers business, so the firm’s chief human resources officer (CHRO) and other top HR executives need to stay current on the numbers that matter. Start with key performance indicators (KPIs) such as billable hours and revenue per employee. Knowing the metrics by heart—as well as their significance—establishes credibility with other executives.
However, KPIs aren’t the only numbers that matter. CHROs have access to a wealth of information about the firm’s workforce—information they can and should use for strategic advantage. For example, if the firm is hemorrhaging top talent, the CHRO must have a credible explanation based on hard information from analytics. Opinions, even those based on years of experience, aren’t sufficient anymore. In the services world, data analytics is quickly moving from “nice to have” to “can’t live without,” and woe to the CHRO who doesn’t get this.5
Figure 2: Top Metrics Used to Measure Human Resources in New Zealand
(Source: Top Metrics Used to Measure Human Resources in New Zealand)The personality traits that make your top performers so valuable—intelligence, drive, assertiveness, and competitiveness—can also make them difficult to manage. Pulling rank on superstars doesn’t work—it’s like dousing a dumpster fire with gasoline. Instead, HR personnel must earn their trust and respect straight up, and that’s no easy task.
Delivering HR services in such a hard-nosed environment requires people skills. Topping the list is the ability to communicate effectively with highly intelligent, motivated, and opinionated employees and managers. Be willing to listen to counterarguments—sometimes with the volume turned up—make concessions where prudent, and stand firm when necessary. (It also helps to have a thick skin.)
The best HR executives often are former practitioners in the profession. Take Leslie Rohrbacker, CHRO at Fragomen, a leading immigration law firm. After earning her juris doctor degree at Seton Hall, she cut her professional teeth as a litigation attorney—bona fides that cement her place alongside Fragomen’s partners and high-powered lead attorneys.6
How do professional services firms differentiate themselves from their competitors? Almost half of the leaders at these firms believe that expertise gives them the winning edge.
But they’re unlikely to be right, for two reasons. First, rapid turnover of top performers dilutes the expertise argument because your expert today can be working for your competitor tomorrow. But the main culprit is digital disruption, a tsunami turning whole industries on their heads, including professional services. More nimble firms with innovative business models get it—they’re investing in technology that offers a customer experience that is equal to, and perhaps better than, that of their larger competitors.
The only way to stand out in today’s chaotic marketplace is by offering superior customer service—in other words, executing flawlessly. Investing in the right cloud-based HR system can be an important step in that direction.
Figure 3: How Organizations Differentiate from the Competition
(Source: “Three Major Trends Disrupting the Professional Services Industry,” Consultancy.uk, March 2018. )