Article: HR consulting industry is facing a credibility gap: Debabrat Mishra

#HRIndustry

HR consulting industry is facing a credibility gap: Debabrat Mishra

While the pricing of consulting firms is going up, the resource quality has eroded and leverage model has changed
 

leadership and talent management consulting practices' revenue percentage has grown while that of the performance consulting has declined

 

The HR consulting industry is facing a credibility gap - Debabrat Mishra, Startup Entrepreneur, Led HR consultingfor MNCs across South Asia and Middle East.

How has consulting market changed over the last few years?

In the HR consulting space the Data services (salary surveys, benchmarking and job descriptions) still account for more than 50% revenue of the large HR consulting firms. In the other services (which can collectively be called the HR advisory space) until 2007 the Performance Consulting practices dominated. Since 2007, Leadership and Talent Management consulting practice’s revenue stream have grown while Performance Consulting has declined.The clients have seen pricing of the consulting firms go up, however the resource quality has eroded as the leverage model has changed.

What do you mean by that statement?

Well, take for example, 5 years ago a 5 lakh consulting assignment would have seen 2 senior and 2 middle level consultants working on a project. A similar project would now be worth 7 lakhs but see 2 middle level consultants and 2 fresh MBAs working on it. The senior person who actually engages with the client to sell the project is almost never working on the project. This is a huge area of dissatisfaction for clients. Even the young consultants suffer as they are thrown into the deep end without any senior guidance available.

What are the challenges that face the industry?

In India, the challenges are unique, compared to other markets. For example, most HR professionals in client organizations are MBAs in HR from good institutes (in other countries HR professionals don’t usually have MBAs). In a consulting project they see their friends or juniors from the same colleges coming to them as an expert. That causes a credibility gap. The other big challenge facing the industry is the entry of very senior experienced HR professionals who after 20-30 years of working are turning into HR advisors to CEOs . Clients also look at B School professors in HR for theoretical and framework help, as they are much more economical .

The other challenge is predictability of revenue forecasts. Most large HR Consulting firms as publicly listed (globally). This drives focus on annuity business which is more about data products etc. Real advisory/consulting work is always shrinking, which is a great opportunity for boutique firms run by seasoned professionals.

What would you estimate the size of the HR Consulting market to be?

The established large firms would collectively account for Rs 200 crores to Rs 230 crores currently. The freelancing HR advisors would account for another Rs. 50-80 crores, in my opinion.
 

Topics: #HRIndustry, C-Suite, Outsourcing

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