When faced with mergers and acquisitions, new systems, process
changes or a project that might be outside of a management team’s expertise,
a professional service firm can often provide the specific skill set your company
needs to proceed with clarity.
“I see companies going forth with a lot of
that work and trying to do it in-house with
their existing staff, and then using professional service firms or consulting firms
strategically when they need certain experience or knowledge that’s maybe not in
their existing organization,” says Martin J.
Dorfner Jr., managing director of Resources Global Professionals.
Smart Business asked Dorfner about the
ways in which a variable work force can
meet a company’s needs.
When might a company consider bringing in
someone from a professional service firm?
Professional service firms are typically
engaged when companies are going
through a great deal of change and also
when companies want to get some external influence or project management.
There are different approaches from the
various professional service firms. The traditional consulting model is used when
companies want to push project ownership, risk and control out of the organization. Our service delivery model is to work
from the inside out, integrating our team
with a client’s project team, thus enabling
client management to retain control and
ownership of a project.
Some typical areas to consider using a
professional service firm can be for acquisitions, divestitures, bankruptcy, compliance (Sarbanes-Oxley, HIPPA); new accounting, financial reporting, human resources or supply chain applications; and
loss of key people in an organization
caused by a leave of absence or traditional
promotions or job changes.
What benefits can a company derive from a
variable work force?
Companies are always trying to manage
head count or FTEs (full-time equivalents), and using professional service firms can
help. So as companies grow or downsize,
they are constantly evaluating how many
people are really needed in every department or business to sustain the current
business state and then manage growth.
Strategically using professional service
firms can allow you greater flexibility in
accessing specialized skills and experience, handling projects and increased
workloads, and transition of key positions.
As companies invest in growth through
acquisitions or implement new systems
leading to process automation, one of the
big areas of focus and efficiency is the
reduction of head count or FTEs. This is
one of the big metrics that companies have
to report on and that publicly traded companies are watched on. Maintaining or
dropping that number plays very well for
those companies with investors and the
capital markets.
What are some of the perceived downfalls of
a variable work force?
One of the big worries when any kind of
outside professional service firm or consulting firm is brought in is that the knowledge leaves when they disengage from the
project. Once someone from a professional service firm works in a company’s environment, helping put in their new system,
helping integrate an acquisition, or backfilling a key management or executive position, he or she gains a great deal of knowledge about the company. Training then
becomes important and typically occurs in
the middle or the end of the project when
one of two things is going to happen:
- When people come off a project back
to their role, we’ll spend time with them to
make sure that any changes to the role —
new systems or processes, for example —
are clearly communicated and they’re up
to speed before we walk out the door. - And if it’s a situation where we’re filling a void for an open position — interim
controller or CFO or other high-level person — we’ll make sure that he or she is
acclimated to the business and the day-today responsibilities in order to function
more seamlessly when we leave.
What are the cost implications?
As companies go through the big projects
of mergers and acquisitions or new systems, one of the big ROI pieces of the calculation is head-count reduction. So if they
can, companies will push hard for efficiencies through process automation or eliminating duplicative efforts.
When you think about the cost of traditional employees versus using experienced
professionals from a professional service
firm, it’s not as simple as comparing salary
costs of $90,000 to hire this person. There
are also the benefits cost associated with
that — which could be anywhere from 25
percent to 40 percent of the salary — and
training costs. You also need to evaluate
whether your organization needs this experience/skill on staff for the foreseeable
future or if it’s a short-term requirement. It
may make sense to evaluate all costs —
training, salary, incentive, benefit and, possibly, severance — before deciding on a
traditional employee or utilizing experienced professionals from a firm.
MARTIN J. DORFNER JR. is managing director at Resources
Global Professionals in Pittsburgh. Reach him at (412) 263-3303
or [email protected].