We live in a cost constrained environment where the way we work and do business has fundamentally changed in every way. In the financial services sector, one of the major ways I see businesses shifting to take advantage of these changes is in how they allocate consultancy budget.
Have the leading consultancies adapted to the needs of the organisations that engage them? Financial Services firms are evaluating the cost and calibre of the consultant offering and often find the results lacking – and the major consultancies will soon be forced to adapt as businesses reconsider this large overhead. Here are the three main forces that I see driving these changes:
1. Firms are seeking efficiencies
When I speak to my clients who hire consulting firms, I’m hearing time and again that consultants are mainly brought in for staff augmentation during busy periods, and that 70–80% of consultancy spend is on heavy-lifting tasks – that is, the necessary but hands-on jobs that form a large part of the workload for teams across infrastructure.
In effect, this means that firms are paying top prices for the privilege of training up junior consultants – and organisations are now waking up to this fact. When bang for buck is a top priority for businesses worldwide, this kind of expenditure is simply not justified. What firms really need is a qualified, flexible contingent workforce that can come in and hit the ground running – at far less inflated prices.
2. Technology has created an explosion in offshoring and near-shoring
Some firms have already begun to find alternative ways to meet these needs, and at the same time, technology is making more options available. Firms are choosing to outsource or offshore niche specialist tasks – such as financial crime to Belfast, or to engage subcontracting consulting firms. This is a trend we’re seeing not only in Compliance and Risk, but also in Legal, where external counsel currently consumes a large part of the budget.
This technological shift is also creating a cultural shift: where it was once seen as the safest bet to hire in one of the major consultancies, the same move could now be considered inefficient. As more options become available, I expect more competition at more cost-effective prices.
3. Top quality people are looking for flexible ways of working
The third piece of this puzzle is that more and more top quality professionals are pursuing independent consulting as a long-term career path. Where once people sought decade-long tenures at recognised firms, this is no longer the case, with independent consulting professionals prioritising the flexibility, stimulation and remuneration of short-term assignments.
This means that the population available for agile staffing solutions is rapidly increasing, and that top talent is no longer only accessible via the big consulting firms. Organisations can now utilise this decentralised workforce to take more responsive and immediate action when needed.
It’s for these reasons that we launched Danos Consulting, which operates alongside the existing recruitment business. We now have a bench of over 5000 expert professionals who are ready to work across Compliance, Risk, Financial Crime and Legal, delivering the same results on a much smaller spend.
If you’re looking to reduce your consultancy spend while retaining quality results, call me on + 44 (0) 20 7471 8943 or email firstname.lastname@example.org to discuss your consulting needs today