Embedded finance and payment solution provider Sonovate reveals the importance of hiring and retaining specialist talent for the survival of UK consultancies with new research. But is the obvious solution a solution at all?
In a new report ‘The Consultancy Conundrum: growth and the double-edged sword of specialist talent‘, Sonovate explores the opportunities and challenges facing UK consultancies to boost business growth and ensure long-term competitive advantage.
New research found that 85 per cent of small consultancies (those with ten to 49 people) and 55 per cent of medium-sized firms (those with 50 to 249 people) say that being specialised reduces their scope to expand their client base. However, the challenges regarding finding specialist talent to serve any new clients they win are compounding this issue.
Eighty-five per cent of small consultancies and 82 per cent of medium-sized consultancies revealed they have enough good talent in their teams to continue serving their clients well, but would need to hire more consultants to expand their businesses. Fifty-five per cent of medium-sized consultancies have lost out on contracts specifically because they do not have the capacity to take on more work.
Finding specialists to join consultancies proves to be a substantial issue for the majority of firms. Fifty-seven per cent of all consultancies said there is a shortage of highly skilled, experienced consultants – and they struggle with finding and retaining enough of them. This problem rose to 77 per cent when looking at medium-sized consultancies alone.
“Sourcing, securing and holding onto specialist talent is a double-edged sword”.
Specialism vs generalism
One solution considered for this issue is for firms to drop their speciality altogether, and instead focus on a more generalist approach. While this may help consultancies to hire far more freely, many firms have indicated that loosening specialist focuses may not help them to survive in the long term.
Eighty-five per cent of small consultancies and 77 per cent of medium-sized counterparts believe being specialist gives them a competitive advantage over generalist competitors – something which would contribute to the firm’s long-term chances of survival.
Damon Chapple, co-founder and co-CEO of Sonovate, discussed the research findings: “Sonovate’s research definitively shows that specialist talent remains crucial to consultancies’ long-term competitive advantage. Yet, it’s intriguing how the data also reveals how focusing on a specialism can also impede business growth in the shorter term, particularly because hiring specialist talent is crucial.
“Sourcing, securing and holding onto specialist talent is a double-edged sword. Without it, a firm will fail to maintain a competitive advantage over the long term, but acquiring it takes resources, effort and time that smaller-scale consultancies can often ill afford to waste. A specialism, however taxing it makes a business’s growth strategy, is key to commercial success over rivals. Learning to navigate this complexity is paramount.”