We read an article from America which we have adapted for the UK and Irish market;
The most common challenges affecting the profession;
- Staffing Pressures.
Because “Pay and benefits” remains the biggest factor/issue to attract and retain team members (including partners). Inflation within the profession is running as high as 12% in some parts on the UK and firms are struggling to increase prices by the same amount – our advice is put your prices up especially for those clients that are holding you back and not paying you properly – if they go, it’s probably a good thing!
- Goodbye baby boomers (and goodbye to “loyalty”), hello millennial. Millennials are the largest generation in our workforce and they have different goals;
- They tend to job hop,
- Always looking for better pay and
- Are less connected to their job BUT…
- They do want to make a difference within their firm and the environment.
We are seeing firms change their recruitment and retention strategy with far more attention given to their concerns (ref “Keeping you Team Sweet – 58 Simple, Powerful and winner ideas” – available to 2020 members)
- Data-mining capabilities (Analytics) – most firms either have or are about to have software that can be mined for all sorts of information, segmenting the clients for those that are most likely to be affected by certain conditions, MTD, for example, highlighted the need to be able to quickly and easily work out which clients were affected and when they would be brought into the new system. We are going to need lots of this technology moving forward
- PITA clients – we all know what to do! We cannot afford the luxury of keeping clients that are not rewarding us fairly. Either send the “Dear John” letter (otherwise known as the PITA letter, an example of which is available to 2020 members), package up your worst clients and either give them away or sell them (2020 have members who will buy these from you), and/or set a minimum fee level for all clients (and stick with the plan!)
- Profit Erosion. Not all firms by a long way have this concern, but enough for it to be raised as an issue. Firms falling foul of decreasing profits tend to have the following
- Too many of the wrong clients,
- Marketing focused on quality clients is lacking
- Prices have not gone up enough and
- Salaries are getting out of hand (without increasing charge out rates accordingly)
Here are some things that can be done to can do stop the erosion:
- Keep looking to add on non-traditional services to your mix. Diversification of services is the key to higher profits.
- Learn how to do more with fewer people. Even if it’s only one less one person, it makes a difference.
- Improve your workflow with technology
- Use cloud technology to work remotely and create flexible position opportunities
- Don’t be afraid to invest in some R&D
- Solidify your brand and culture
- We will always have challenges, don’t let them overwhelm you.