The professional services sector is vital to the UK economy through Covid. Including law and accountancy firms, real estate and management consulting firms, professional services makes up a quarter of UK businesses, employs nearly 15% of the UK workforce and contributes £190bn to the economy every year. Its ability to weather the Covid storm (as well as temporarily forgotten Brexit), will be significant in determining how the pandemic recession and recovery evolves.
In this piece, we share our insights into what is happening on the ground in this vital market. As recruiters helping to place business services professionals across the sector, we spend a lot of time talking to professional services firm leaders (and candidates). Through lockdown and its gradual easing, we have had many informal conversations with clients and candidates, as well as hosted numerous virtual networking meetings via Zoom with business services managers and leaders from across functions such as HR, BD and marketing, and business operations.
During the course of these meetings, we have been struck by the fact that beneath the competition that is essential to the growth of the modern professional services business, runs a deep and strong current of collaboration and collegiality – the cultural mainstays of a sector bred in partnership. Whether discussing issues related to furloughing people, working out how to manage performance remotely or designing an office re-opening policy, we have seen a huge willingness from people from different businesses to share experiences and ideas. Firms have come together to collectively face whatever challenges lie ahead.
The current climate
Contrary to despair-inducing news reports of businesses falling off cliffs, nor has work output so far been as bad as feared. Firms in the legal sector, for example, may be encouraged somewhat by figures from the past financial year end. Although incorporating only a small part of the Covid lockdown, 2019-20 finished strong, with finances holding up well and many law firms paying out bonuses off the back of their strong performance, despite the on-going uncertainty.
This of course can’t guarantee what is likely to be a rocky year in 2020/21, with reports of law and accountancy/consulting firms implementing measures to forestall the worst of a shrinking market through the winter (freezes to payrises and promotions have proved a popular means to protect cash-flow so far). But strong financial foundations at least provide something of a buffer zone.
Since year-end, we have also seen that firms have generally kept busy, albeit work has migrated to different areas. In law, there has been considerable activity across arbitration, litigation and compliance, IP tech and employment, although M&A and competition has obviously slowed.
In addition, and across the professional services sector, indications suggest that lessons learnt in the 2008 financial crisis have enabled firms to act quickly to protect their businesses as the Covid crisis took hold. Firms were quickly able to save cash in certain areas (particularly around events/travel) while taking advantage of expertise in credit control and cash flow mechanisms, skill-sets that we have seen flowing into the sector in the shape of working capital managers and senior revenue controllers in recent years.
It has been striking too, just how smoothly firms across the sector shifted to working from home, pretty much overnight. Amongst the Big 4 accountancy firms, such flexibility is not uncommon – this is a sector that has led the way on workplace flexibility. But even in law, we saw IT teams using technology to support a wholesale migration home – and, more importantly, we saw it work. Business did not fall apart – and while firms in meetings have expressed concern about making this work long-term – there’s no doubt they passed this particular form of resilience testing.
In recruitment too, we have seen firms adapt extraordinarily well to considerable challenges. At the beginning of lockdown, we thought there might follow no placements whatsoever. Many roles were understandably put on hold overnight, surprisingly few were cancelled altogether though. And encouragingly, a good number of business-critical roles continued on to placement, with new ones going live since lockdown, and activity further picking up now. We wouldn’t say we are at full capacity, but we are busy.
We’ve also found ourselves working in new ways, helping firms to recruit remotely via Zoom or Teams. Firms making people job offers and on-boarding them without physically meeting them is quite a feat. People have started their new roles without meeting any of their colleagues. It has gone far smoother than we could have imagined. Again, this process may get harder the longer social distancing and the presence of the virus goes on, but the fact remains that individuals and businesses are far more adaptable than any of us might have expected.
Of course, we cannot predict where things will go next. But we do think that the professional services sector has already learned lessons it will take long into the future: how to use technology to its full capabilities to deliver seamless digital communication both internally (across remote working teams) and externally (virtual pitching being a biggie); the ever-vital role of finance in delivering skills in obvious areas like credit and cash control; the importance of prioritising employee wellbeing; delivering really focused client engagement; the need for increased focus on Diversity & Inclusion, including issues highlighted by Black Lives Matter; and of course fresh new thinking around the flexible workplace and future office space.
Business services teams
As recruiters, we’ve worked in this sector through a few periods of uncertainty and, at times, crisis. Some things follow the same pattern in these times of stress and have provided invaluable lessons for firms to follow now. Other things are very different – Covid is a unique force, unprecedented in our lifetimes, that has pushed businesses to radically reappraise how they interact with staff and clients, and deliver services. Some learnings here – like prioritising employee wellbeing – will long outlast Covid and result in improved and more flexible workplaces, and perhaps a more human face to professional services brands.
We’ve also noticed just how vital business services teams have been through this crisis. HR has been key to working through people issues, supporting the shift to homeworking, followed now with strategies for re-opening offices, and working through the end of the furlough scheme, including re-skilling and redeploying people as necessary. BD & marketing teams have played a huge role in helping to maintain and grow external relationships – helping partners engage with clients effectively across virtual channels. IT has literally kept the doors open and finance has kept the engine running.
If previous crises typically put such teams first under the spotlight for potential cuts, we don’t think that’s the case now. Firms seem to acknowledge more than ever just how vital these teams are to continuity, productivity and performance.
Some firms are actively looking at what positives can come out of the pandemic. How can firms manage flexible working in the future, strengthen the employee brand and create an environment that best supports employees and clients? With Covid making firms think harder about how they maintain client relationships, there’s also a sense that firms have had to look externally – and away from an all-to-easy preoccupation with internal affairs. We are now hearing firms talking about how to maintain this outward-looking perspective post-Covid.
We don’t know for sure how the professional services market will fare in weeks and months to come. But developments so far point to more confidence and success than might have been supposed back in March. This is a resilient and highly capable sector that learns much faster than people think.