Clients choose well-managed firms – and HR matters
According to a recent report, 54% of clients say it is an essential pre-condition for selection that their advisors be well-managed. To put that another way, more than half of the clients surveyed will not instruct a firm they consider poorly managed.
That’s the first revelation that hits you between the eyes are you read the Effective Client-Adviser Relationships Report 2012, produced jointly by Managing Partner Forum, Meridian West and the Financial Times.
The report, which is freely available, provides a number of other significant insights into the dynamic professional services sector that range from management priorities to commercial awareness to adding value to training and knowledge management. In an overall sense, the report will make the reader question the long-held division in management authority between the partners and management. How sustainable and sensible is this in the eyes of clients?
From our perspective, the report provides some very relevant information for firms considering the business case for Performance & Planning Systems (PPS) and Learning Management Systems (LMS).
Particular points worth noting from the extended report (there’s also an Executive Summary available) include:
- When identifying management priorities, the most significant gap in perceptions about priorities relates to investing in technology and systems: 44% of clients consider this to be important while only 18% of managing partners consider it important.
- Clients want commerciality. Firms seem to know this with 87% of firms saying they need to develop a more commercial skill-set in addition to their technical competencies. Surprisingly though, only 36% of advisers receive training on business and commercial issues. And 32%, receive no training in client service, business or commercial, project management, sales and pitches, financial analysis etc.
- One quarter of firms are not assessing non-technical competencies in performance reviews. Given the stated importance of these areas by clients, and the likelihood that all are conducting reviews, that’s a concern.
- For Asia-Pacific firms, some clear differences emerge: attracting and retaining talent and training best practice are uniquely strong priorities in this region, probably underlining the strong economic performance the Asia-Pac region relative to Europe and North America.
- Asia-Pacific firms say that appraisal and reward systems are not adequately linked to commercial, non-technical skills.
These are some of the relevant insights for our clients from the report. What it means for HR and Learning could be the subject a more detailed discussion, but the report would appear to have the following implications, at least:
- Clients want to know that firms are properly managed (including in the areas of training and performance) so HR having a seat at the management table is a non-negotiatable.
- HR processes need to reflect the commercial skills and mind-set required of advisers – so a strategic competency framework that properly distills these skills and then flows through all HR processes, from learning to performance review to remuneration is essential.
- L&D managers need to increase the focus on commercial skills, including client service, business or commercial, project management, sales and pitches, financial analysis capabilities.
- Clients expect firms to invest in systems that underpin these business processes. Firm leaders may not understand this – there is a significant perception gap on this issue that BD and HR need to bridge. This report may help!
- Given the importance of both appraisals and learning, the business case for a PPS and LMS is a strong because it’s coming from clients.
Find out more about Managing Partner Forum and how your firm can join this peak organisation for professional services.
November Update: Partners Managing People
In our November Update, we launch our 2012 campaign, Partners Managing People.
Why have we chosen this campaign? Because law firm managers told us that partners managing people was their main talent retention challenge in a recent survey we conducted within the legal industry.
Their response makes sense when you consider that retention remains a challenge and partners are one the frontline. In Australia, top and mid-tier firms confronted average attrition rates of 21% in FY10/11. Despite difficult economic times, US firms dealt with similar attrition figures in 2010. Partners and managers have a huge impact on key retention drivers such as quality of work, career coaching and guidance, feedback and learning.
Throughout 2012, from our email communication to events and conferences, we will use this campaign focus to identify ways in which HR can support partners and managers to improve engagement and retention.
To read our November Update in full email us at email@example.com and we’ll send you a copy.