Achieving best in class retention results has a massive financial upside

As attrition rates across the management consulting industry soar, effective retention strategies can translate into massive saving off a consultancyís recruitment bill, according to the according to the latest in-depth industry survey from Top-Consultant.com, the leading career web site for management consultants.

According to ì2007 Retention Report: A key challenge for the Management Consultancy sectorî, based on surveys of 140 consulting recruiters and more than 700 consultants from a wide range of firms - from the Big Four to niche consultancies - attrition rates in the industry across the globe are reaching the 15% - 20% range and many firms are losing consultants at higher rates.

Besides attrition rates, the study focused on what compels consultants to stay or to leave their employers.

The report has found that a poor employee experience drives new recruits out in less than a year and a half on average, while a great employee experience extends tenure to an average of more than three and a half years (and in many cases considerably longer).

With firms targeting an average cost-per-hire of 5,000 this difference translates into a massive additional recruitment bill (~10 million for a 1,000 strong consultancy over a four and a half year period).

Candidates rank retention factors

According to candidates it is remuneration, project quality and work/life balance that are the key retention factors. Flexible hours and work from home are still highly ranked and they remain so, with their importance showing no change in the past two years.

Recruiters report that the reasons being given in exit interviews are very similar ñ remuneration, work/ life balance and quality of projects.

Taking steps to improve retention rates amongst the ìregular consulting workforceî may be costly and may just postpone the inevitable.

Consultants want to secure better remuneration. Once applied across the firm this can prove very expensive ñ and easily negated by a competitorís counter-move. 51% of firms taking measures to improve retention in last 12 months have raised remuneration.

Consultants want greater influence over the projects they are assigned to. This is likely to lead to more time on the bench and lower utilisation rates if applied across the firm ñ but could be selectively targeted at staff deemed to be ìat riskî of leaving.

Consultants want a change in culture so that evening and weekend work is discouraged and work/ life balance is improved. Looks like the most cost-effective measure, but needs leadership and buy-in from the most senior figures in the firm.

By contrast, overcoming a problem of ìEarly Leaversî is predominantly a question of tackling management problems within the organisation.

ìEarly leaversî cited lack of face-time with management, lack of guidance, poor management / consultant relationships, uninspiring leadership...

Long-serving consultants are most likely to move on because of a lack of career development and uninspiring consulting assignments.

ìLong-serversî cited a lack of actual career progression combined with a perceived intransparency in their intended career path; plus dissatisfaction with the variety and challenge of assignments being won.