By now it’s reasonable to assume that the anticipated 2020 promotions in large professional service firms will be delayed by a minimum of a year, or indeed longer, as corporate Australia riles under the impact of COVID-19. For those impacted, the obvious question is: “What are the longer-term implications of COVID-19 on partnership prospects in the profession?”
Over the last month there have been multiple articles suggesting professional services revenue will drop dramatically. Worst case scenarios have predicted up to a 40% drop. Whilst I don’t profess to hold any unique insights in this opinion piece, I believe a little perspective is in order.
In the short term, most people will be grateful they still have a role, and therefore the status quo will remain. However, as you begin to look beyond the initial lock down period, there are numerous implications which will play out over the next 2 years.
A large part of the attraction of professional services is the fact that the industry provides exceptionally clear progression opportunities, with no glass ceiling. Professional service firms provide defined career paths, which allow ambitious and highly driven individuals a pathway to partnership. Over the last couple of years, firms have been willing to sponsor lateral directors or equivalent into partnership, due in part to the limited internal pipeline. Not surprisingly, I’d suggest the opportunity for this type of promotion will be limited in the current climate, having said that, certain firms will be opportunistic where an accretive need existed pre COVID-19.
The consulting sector is estimated to be worth $8.5 Billion dollars in Australia, excluding legal services (Source Global Research). Over the coming year, it’s reasonable to assume this number will be adjusted downwards. Whilst I’ve heard several opinions on which lines of service / functions will be trimmed or cut, I’d suggest most firms will not decide until they have a read as to the new normal.
Professional services will continue to remain attractive for senior executives in commerce and the profession alike. The opportunity to work with leading global companies on their most important and decisive commercial projects will always attract executive leaders. Professionals who can navigate the complex matrix of decision making and relationships within the commercial and profession services landscape, will continue to be financially rewarded.
Diversity and Inclusion
Anecdotal evidence suggests the firms went backwards in the GFC on diversity and inclusion. Whether this plays out during the COVID-19 crisis has yet to be seen, but I assume the enduring need for diversity within the firms will continue and potentially accelerate. Whilst the firms should be applauded for the considerable progress they have made on diversity and inclusion, there is still much to be done.
There will come a point within the business community when peak pessimism is overtaken by optimism. Firms with sufficient connectivity to the market will then begin a process of measured growth, sponsoring directors, senior associates and lateral partners once more into partnership.
The current vacuum of opportunities will be replaced, by the traditional competitive landscape, where leaders are keen to demonstrate their growth credentials. Professional service firms will create new lines of service, pivot strategies and once again promote into the ranks of Partnership.
In my opinion COVID-19 will define Professional service firms by how they manage their staff and communication. If you are amongst the unfortunate few who’s ambitions of partnership have been delayed, do not despair, this too will pass.
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