Hinge Research Institute have recently published a study of over 1,000 professional services firms worldwide, looking at what makes the high growth firms different to the others. Click here to review the report in full.
Around 21% of survey respondents were from the accounting and financial service sector, with other participants from consulting, architecture, engineering, construction, technology and other services. Of course there are differences within these industries. However, it’s startling to see the similarities in the experiences and challenges of firms from different professional service environments.
Overall, annual growth in revenue was 9.1%, with the accounting and finance sector experiencing just 6.1% annual growth, the lowest of the professional services sectors reviewed. The high growth firms (those with a growth rate of at least 20%) experienced an average growth rate of 34.2%.
The top 8 challenges faced by high growth firms participating in the study were:
- Increased competition from new firms and competitors – 47%
- Unpredictability in the marketplace – 41%
- Increased competition from larger competitors – 38%
- Downward price pressure on services – 37%
- A shortage of top talent – 33%
- Automation / Artificial intelligence – 17%
- Commoditisation of services – 27%
- Managing a remote workforce – 24%
Most of these challenges are familiar to accounting and financial advisory firms. Which can you relate most to? Is it the pressure on pricing or the impact of technology?
The difference between high growth and other firms lies in their response to these challenges.
The top 9 strategies adopted by high growth firms were:
- Do more research on the needs of clients – 56%
- Better training on business development skills – 55%
- Better training on commmunications and client management skills – 53%
- Better training on technical skills – 34%
- More focus on hiring better talent – 30%
- Enter new geographic markets – 28%
- Productise our services – 17%
- Outsource more functions – 19%
- Change our pricing structure – 15%
Again, there are no real surprises with these strategies. All of them make sense to accounting and advisory firms. It’s interesting that 3 of the top 4 strategies relate to training, and 2 of the 3 relate to the development of non-technical skills. In fact, if you regard ‘do more research on the needs of clients’ as a professional development activity, all top 4 strategies relate to training.
How much training are you giving your people to ensure the sustainability and growth of your firm. Remember that these are not aspirational objectives, they’re what high growth firms are actually doing to achieve the growth they are experiencing.
The HTST eLearning Academy provides a comprehensive online learning environment for advisors, accountants and administrators looking to develop their skills of communication, client management and business development.