5-Year Talent Trends

**The war for talent has never been as acute or critical as it is in 2022, with historic levels of attrition, a record number of hard-to-fill roles still vacant, huge consulting demand, and massive wage growth.**

Talent must take center stage as the number one priority for all professional service providers.

Over the past five years, real growth in billable hours (utilization) has been small. Almost all professional services productivity improvement has come from the use of technology to lower overheads and administrative costs along with remote consulting delivery. PSO employees are working the same number of annual hours (2,080 hours per year), but they are working smarter through the use of:

Agile development methodologies
Virtual consulting delivery (limiting travel time)
Maximizing multi-tasking across multiple projects
Limiting administrative time
Knowledge sharing
Developing greater levels of expertise and productivity

Voluntary attrition rose in 2021 as the economy improved, going up to 9.8% from 6.9% in 2020

Top talent in professional services have been frustrated with working from home, have missed social connection, and have gone on to join other firms who promise more exciting work, a better work environment, and more lucrative paychecks. The APAC region saw the greatest voluntary attrition rate at 10.9%, followed by the Americas at 9.8% and EMEA at 9.3%.

Involuntary attrition went down as professional service leaders worked to keep the people they had.

Billable utilization, however, went up from 71.4% in 2020 to 73.2% in 2021

The percentage of onsite service delivery continues to go down. SPI saw the largest change ever, going from 40.2% of the billable hours down to 33.9% in 2021. To future-proof going forward, firms must reevaluate their facility spending and shore up their support for working from home.

The study indicates as many as 63% of employees do not want to go back to working full-time in an office. 52% want to work from home at least 3 days a week, and 11% never want to work from an office. Only 37% favor working onsite.

Why do employees leave?

There are multiple reasons for talent leaving good businesses, but, in many cases, there is a primary catalyst for someone choosing to move on.

The number one reason, with 39.2%, is “better opportunity,” which translates to a better work environment, better compensation, a better boss, or more opportunity for advancement.

Once hired, how long until people are fully billable?

Many factors are making it increasingly difficult to onboard new hires and then prepare them for fully billable work.

42.3% of the PSOs in the survey reported over 60 days for a new consultant to become productive once hired, which is much higher than the 34% in 2020. Well-structured onboarding and mentoring programs are a must for organizations with significant growth plans.

This year, the average time for a new hire to become productive increased to 59.1 days in 2021 from 58 in 2020. Each extra day of ramping time is significant.

PSO organizations within SaaS and Software companies take the longest to ramp employees, averaging 84.9 days versus 47.8 in IT consultancies. Smaller organizations take longer, too, as they need people to perform more roles and have less well-defined onboarding programs.