As I stand at my window, like a character from a Jane Austen novel, silently judging my neighbours who don’t maintain an appropriate social distance, it’s hard to remember a time when I rode the underground happily on my way to the office. An office where I would sit in close proximity of my friends and colleagues, and talk about a dinner or an event that took place without masks and with over 6 people.
I’m coming up to the end of six months on furlough and it’s time to pull my head out of the sand, and take a look around at what’s been happening in the professional services sector whilst I’ve been away. Specifically within the Reward space. The news has been full of furlough schemes, government bail outs and delayed bonuses. I can see I have a lot of catching up to do.
Professional services by definition are occupations that require special training/skills/qualifications to support other businesses of all different sizes and sectors. Therefore a professional services business is only as lucrative as the clients that they are supporting. Where some companies are smashing it, (Amazon for example have all but taken over the world) others are on the verge of going under.
At the beginning of lockdown businesses went into self preservation, and crisis management mode, and the professional services world was no exception. Unsurprisingly the businesses that were able to most efficiently move their workforce to home working were the ones that were able to maintain a more business as usual approach. Hats off to the Big 4 consulting firms who already prided themselves on flexibility, and were able to slip relatively seamlessly into this “new normal”.
However, projects and bids were put on hold whilst the businesses they support and clients tried to figure out how to set up working from home, child care and staff safety. The immediacy of the pandemic took priority with businesses across all sectors, hitting professional services industry, who support them, hard.
With the majority of projects being paused or withdrawn, in order to reduce redundancies professional services have been taking advantage of the furlough scheme and reduced pay across all levels of employees.
Cost saving exercises have been put in place in order to preserve the business.
Deloitte for example:
-Scrapped summer internships- offering online training instead.
-Pay cuts across all employees of up to a fifth.
-Bonuses will be slashed and pushed back to later in the year
-Employees offered the option to reduce working hours.
EY and PWC have similar measures in place, as well as hiring freezes. During the last recession, WTW prided itself on not making any redundancies, and they look set to continue this trend, putting work culture and staff retention high on its addendum. The professional services sector is very risk averse by nature, meaning that all this uncertainty has made it a tough market at the moment. You can imagine how much this thrills me as a recruiter specialising in professional services… pause for awkward laughter here.
The Confederation of British Industry says that nearly half go firms are planning to cut jobs of freeze hiring in the next 12 months. A poll of employers show that 46% will either reduce full time jobs or pause hiring.
Statistically speaking 23% of firms have cut employees working hours to preserve jobs, 20% have reduced bonuses and 33% plan to implement a pay freeze.
The CBI has also said there is a “two speed recovery” with some businesses enjoying a strong rebound whilst others are struggling. Matthew Fell, CBI policy chief said that “ it is not uncommon for permanent recruitment to drop significantly during periods of recession and usually after a short recess, the temporary side of recruitment kicks back in to provide opportunities to enter into new roles. We have already seen signs of this during recent weeks.”
Ever the optimist, despite the figures, business must continue. With bonuses being pushed back and reduced, Reward professionals will inevitably be required to come up with new and creative solutions to keep employees engaged. Benefits will need to be communicated, reworked and negotiated for the new demand in mental and financial wellbeing.
If you are working within the professional services sector in a reward and analytics space, I would love to hear from you. It’s been a long 6 months, and I need catching up.