By Stuart Gallie
At time of publishing, the forecast for the proposed removal of the restrictions imposed in the UK since February 2020 is a positive one. It’s safe to assume that the run-up to this date will find the Chancellor and other ministers strongly “encouraging” the workforce to return to “the office”, in order to benefit the wider service economy. But to what extent that happens and how long it takes, is open to conjecture.
How it plays out for consultancies will be heavily influenced by their clients. For instance, some clients in the financial services sector, like Goldman Sachs and J.P Morgan, are actively advocating a full-time return to the office. Whereas others, such as HSBC, are acknowledging that a staggered ratio of 3 days in the office, 2 days working-from-home, will be their operational model – with a forecasted 40% reduction in their office space as a result.
They’re not alone – 77% of the Lloyd’s workforce are also indicating that they want to work from home at least 3 days a week. Resulting in a forecasted reduction of 20% in required office space.
The question is, if clients are adopting a mixture of working models, how should consultancies respond and what impact will that have on their operating model? Will they need more space to offset reductions in client locations? Or less, because their own staff are working from home for most of the week? And will either of these scenarios drive a change in the location and permanence of their premises?
These decisions will also be driven by what the human assets of the consultancy business want. Some consultants will want to return to the office, because they have too many home-working challenges, or simply because they miss the dynamics of interpersonal contact, socialising, and working in a team. Others will not want to return, because they now don’t see any value in going back into an office, not wanting to commute, or lingering apprehension caused by the events of the last 15 months.
A number of recent articles suggest that most employees want a working blend of office and home, but how will consultancies handle those who now want to dictate a working pattern that may not align with company policy? What if they’re your star performers or hard to replace because of their skills and experience? What if your competitors are offering a more flexible model than you?
Providing a safe, attractive and relevant model for employees is likely to become a key differentiator in a competitive post-pandemic marketplace. Those consultancies that don’t address it correctly may find themselves struggling to grow as a result.
On the flipside, if some consultants work remotely for the majority of the time, will it have an impact on their future? Will they be perceived as “less committed” than those that are in the office more regularly?
How well have consultancies managed their people during the pandemic? Was their focus on just getting the work done, or was there also a tangible investment in managing how their people were coping? This will no doubt vary from manager-to-manager, as well as company-to-company, but the reintroduction of a co-located workforce could fracture some of the relationships if the focus was on the former.
Rightly or wrongly, pre-COVID, the old assumption still held that showing your face was required to evidence value, and especially important in order to build the high-value “trusted advisor” relationships. But if some client organisations now reduce their office footprint for a more flexible work model, what will that mean for client/consultant relationships? For instance, if your client is only in the office for 2 days/week with a very strict diary for face-to-face meetings, are you going to travel to near where they live in order to meet them in person?
So, ahead of the proposed return to normal, we see potential implications – some of them significant – for employee value propositions, the client engagement model, office configurations, locations and the associated allocation of capital.
Some of these questions and challenges will be short-term, but some will play out as strategic changes to both individual consultancy businesses and the wider sector. On their own they’re not insurmountable, but when combined with our wider hypothesis that digital will fundamentally disrupt the consulting industry – there is clearly significant change on the horizon. We expect it to be the most impactful change of the last 40 years.
This impending portfolio of change will be our key focus at Garwood for the coming months, and something we would value your participation in to create a cross-sector perspective. In the next month, we plan to distribute a short survey and we’d be grateful for your thoughts and opinions.
Also, if you’re interested in leading the development of this topic and would like to join one of our roundtable discussion groups, please let us know and we’ll include you in further communications.