News:
Accenture boosts
technology consulting
page 4

News:
Atos launches
healthcare arm
page 7

Feature:
Taking belief into
the workplace
page 9
  July 2007   :  
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Talent management
tops HR agenda
Staff loss endemic in management consulting industry
 
 Consultants and HR
directors alike agree
that attrition rates in
the consulting industry
are likely to worsen in
2007/8, according to the
latest in-depth industry
survey from
Top-Consultant.com, the
leading career website
for management
consultants.
   UK staff loss at
consulting firms is
running at 15%-20% and
both employers and
consulting employees
expect this figure to
deteriorate in 2007,
according to
Top-Consultant.com's
2007 Retention Report:
A key challenge for the
Management Consultancy
sector, based on
surveys of 140
consulting recruiters
and more than 700
consultants from a wide		 
 range of firms – from
the Big Four to niche
consultancies.
   Top-Consultant.com
director Tony Restell
commented: "These staff
loss figures explain why
recruitment has become
the number one issue for
consulting firms. Most
major brands are winning
work at fee rates that
are far less profitable
than during the last
consulting boom. This
has meant they've been
unable to reward staff
across the board with
major pay rises and
sizeable bonuses. The
knock-on effect of this
is that many consultants
are now seeing a move to
a competitor as the most
likely way to enhance
their earnings in the
coming year. Hence the
significant staff loss
figures we have been		 
 witnessing. Most are not
leaving the industry
altogether – simply
moving from one
consulting employer to
another. But the
implication for
consulting firms is that
they need to hire
15%-20% of their
existing headcount over
the next year, just to
stand still."
   The UK market as a
whole is experiencing a
median rate of staff
loss of 15% to 20% per
year. A minority of
firms are experiencing
worse rates than this,
with over 10%
experiencing staff loss
of 1/3 or more per year.
   However, locating an
office outside of London
brings a noticeable
reward in the form of
better staff retention
rates. Partly this may		 
 reflect that there are
fewer alternative
consulting employers for
consultants to switch to
out in the regions,
compared with a London
market awash with
opportunities.
   In Europe, firms seem
to be experiencing a
lower attrition rate
than the UK with most
firms seeing turnover
rates of below 15%, the
median being 10% to 15%.
Attrition rates in the
range 20% to 30% seem to
be in the minority but a
significant number of
firms saw more than 35%
staff turnover.
   In North America,
most firms lost staff at
the rate of 15% to 20%,
although a significant
portion of the market is
seeing attrition rates
in the 20% to 35% plus
range. 		 
    Most importantly,
about 80% of both
consultants and HR
managers felt that rates
of staff loss are likely
to worsen in 2007/8.
   Aggravating the
problem is the fact that
a clear majority of
consultants expect to
work for three or more
consulting firms during
their consulting career.
   These are just some
of the key findings to
emerge from
Top-Consultant.com's
2007 Retention Report:
A key challenge for the
Management Consultancy
sector. The full report
is available to download
in PDF format
here.
  
   		 
 
KPMG report prompts recruitment rethink
 
 Recruitment is now the
top problem for more
than half of all UK
companies ahead of
business strategy or
management, a new study
by KPMG and the
Recruitment and
Employment Confederation
has found. The study
reveals that the battle
for skills and talents
compels UK employers of
all sizes and sectors to
reconsider how they
manage recruitment and
staffing.
   "Recruitment is now a
key challenge for most
organisations in the
UK," Rav Bains,
principal at KPMG
Sourcing Advisory
Services, explained.
"Most employers realise
that modern recruitment
is going beyond the
remit of a traditional
HR function; what we are
seeing is that many HR
departments now view		 
  
   
 
 
 
 
 
 
 
 
 
 from web-based solutions
to managed services or
recruitment process
outsourcing.
   Direct online
recruitment seems to
have the biggest impact
among larger employers.
A number of major
companies have launched
recruitment web sites in
the last years – with
impressive results.
Organisations such as
Unilever, the BBC and
the Royal Mail have been
able to reduce their use
of recruitment agencies
by up to 80%.
   However, direct
internet recruitment
only makes sense if the
organisation has a
strong corporate
presence or a brand
powerful enough to
attract a large number
of candidates. Most
employers do not fall
into this category and
therefore will need the		 
 help of agencies to find
and attract staff.
   In fact, 80% of those
surveyed use a
combination of in-house
recruitment and agencies
to find staff.
   The survey predicts
that over the next one
to two years, most
employers will have a
career section on their
corporate site and make
some efforts to move
recruitment
communications online,
assisted by agencies
offering support and
services.
   Bains explained:
"Online recruitment has
traditionally been a
preserve of larger
organisations, but many
smaller companies
already have a career
website and they will
professionalise these
sites. The internet will
become an important
recruitment tool for all		 
 employers regardless of
their size."
   Recruitment process
outsourcing and the use
of so-called managed
services, where an
employer appoints one or
two agencies to manage
all recruitment and
staffing needs, are
becoming more popular.
At the moment central
and local government
agencies are the biggest
users of managed
services; among all
employers the percentage
of users is relatively
low at 20%.
   KPMG foresees greater
consolidation in the
market, but there will
be a role for both
bigger and smaller
players. Ultimately, the
winners will be those
who change their
business models fast
enough and deliver what
the market wants.
   		 
 their role separated
into two functions – one
revolves around typical
HR issues such as
managing staff and staff
relations and the other
one focuses on
recruitment, finding the
right people in the
first place. This is
driving a marked change
in the HR services
market."
   The search for staff
increasingly impacts
costs and productivity
of companies. Many
employers therefore
explore alternative
approaches to
recruitment, ranging		 
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