Elite firms thrive on the capabilities and commitment of their employees, making an engaged workforce the cornerstone of client service excellence. But, as any leader of a services firm or agency knows, achieving an engaged workforce is easier said than done.
Midsized and boutique firms have their own version of this challenge – they often try to emulate industry giants who set market compensation and have expansive training and cultural programs, but employee engagement numbers nationwide (less than 30% according to Gallup) reveal the truth; those programs rarely work in companies of any size. But in the effort to keep up, firms adopt low-calorie versions of their larger counterparts’ strategies without considering whether these hefty structures support the firm or its employees. As a result, they end up with a lukewarm value proposition along with draconian handbooks and stringent policies because “that’s what firms are supposed to have,” inhibiting flexible and creative client solutions. So what’s the solution?
The opportunity to become an employer of choice lies in extracting lessons from the success of large firms while maintaining the agility and personal touch that the giants can’t offer. This involves adopting strategic compensation that rewards genuine contributions rather than mere presence, developing focused learning opportunities that are directly applicable to daily tasks, and instituting recognition programs that celebrate both internal innovation and client-facing successes. By doing so, smaller firms can create a dynamic environment where employees are not only well-compensated but are also actively engaged in the growth and success of the business. Here’s how you can get started:
1. Strategic Compensation - Rewarding Excellence and Alignment: Most service firms track and compensate on a billable hours framework—emphasizing quantity over quality, short-term gain over long-term growth, and ignoring excellence. Instead, connect incentives to the broader and longer-term goals of the firm.
- Performance Based Incentives: Implement a compensation system that rewards individuals not only for the effort but for achieving specific, measurable outcomes that contribute to the firm’s strategic goals – e.g., client satisfaction scores, retention rates, and upselling/cross-selling the work – contributing to the factors that drive longer-term revenue into the firm.
- Profit Based Bonuses: If you want your employees to act like they own the place, give them skin in the game. Consider profit-sharing options or bonuses tied to firm profits to allow everyone (at any level) to share in the financial success they help to create.
- Market Competitive Salaries: Regularly benchmark your compensation against industry standards to ensure your pay is attractive and fair. If you simply can’t pay at the top of the scale, create a compelling value proposition nonetheless (e.g.,flexibility, less hours, additional perks, etc.) or supplement your core workforce with more affordable resources instead of settling for the “B team” (from offshore personnel to part-time and freelance professionals). This is where tying bonuses to firm profit (as noted above) can achieve a third purpose beyond motivation and alignment, making for an attractive overall value proposition.
- Tailored Bonus Structures: Consider bonus structures that are flexible enough to cater to the diverse roles within your firm, reflecting both individual and team contributions. While client-facing employees have more obvious measurements of success, every department should feel motivated – for example, the often forgotten help desk’s bonuses could be tied to the the total number of support tickets and average time to resolve tickets, encouraging them to improve system stability and proactively communicate changes with easy self-service tips, in turn enhancing your firm’s overall productivity.
2. Learning and Development - Cultivating Hard and Soft Skills: People consume goods, but they experience service. The value of continuous learning and development extends beyond technical expertise; it also encompasses mastering the soft skills crucial for long-term client relationships and effective teamwork. Most managers assume teammates will “pick it up” over time, a dangerous assumption to make in remote and hybrid environments in particular. Effective learning and development strategies require showing, not just telling, what excellence looks like in action.
- Role Specific Technical Training: Provide targeted trainings for each service/practice area within the firm and be clear about the competencies you expect employees to master at different seniority levels. (Bonus: Creating your training programs in-house instead of pushing the program to a vendor helps your senior personnel identify junior superstars and builds stronger team bonds.)
- Soft Skills Development: To build essential soft skills, create training programs that focus on real-life scenarios and role-playing exercises. For example, instead of simply telling employees to “treat clients as VIPs,” offer workshops that simulate various client interactions, teaching employees how to handle out of scope requests, complaints, or discounts effectively.
- Show, Don’t Tell: Building on the previous point, implement a “show, not tell” approach in soft and hard skill training alike. For example, use a case study to demonstrate how a partner folded new regulatory developments into a current engagement instead of simply announcing the change and hoping staff will know how to interpret it soundly.
3. Recognition - Celebrating Contributions: Recognition shouldn’t wait until year end, and needs to encompass both client successes and internal innovation, to support a culture that values excellence in both client engagements and the firm’s growth and efficiency.
- Client Service Excellence: Highlight key client achievements such as successfully negotiating a complex merger or securing a major account, and be specific about the details that pushed your firm to the finish line. Recognizing these accomplishments not only reinforces their importance but also sets a benchmark for excellence within the firm.
- Innovation and Team Contributions: Introduce innovation challenges that motivate employees to improve internal processes or develop new service methods, and open ideas to all employees – after all, the best ideas often come from the “front lines.” For example, an accounting firm could recognize a team that developed a process that cut time in their audits through firm-wide communications and spot bonuses.
- Broader Contributions: Acknowledge efforts that significantly contribute to the firm’s culture and outreach. For example, a marketing firm might recognize an employee who led a series of workshops on digital marketing trends with a modest spot bonus, well worth the enhanced team skills and elevated service offering.
4. Policies and Procedures - Codifying Values into Daily Operations: Too many firms consider their policies to be a legal/HR “check the box” exercise instead of a reflection of the firm’s core values and blueprint for daily conduct. When these policies are thoughtfully aligned with the firm's strategic goals and values, they guide behavior and culture. Some examples of values that are common to most firms and how you can better integrate them into your policies:
- Stellar Client Service: Walk the talk on client service by creating real policies to support it – something most firms surprisingly don’t do. One simple example is requiring that all client communications are responded to within 24 business hours, and detailing further how employees should manage out-of-office communications and vacation planning to ensure continuity and reliability in client service.
- Transparency: If this is important to your firm, ensure that transparency is not just a stated value but a practiced reality. Your financial policies could require regular reporting and open communication; likewise, hiring policies could be based around honesty and clarity throughout the recruitment process.
- Work/Life Balance: Reflect the firm’s commitment to work-life balance through tangible policies. This might involve more generous time-off policies or performance evaluations that recognize and reward efficient work that respects personal time. Such policies help maintain employee well-being and productivity, showing the firm’s dedication to the health and satisfaction of its team.
Conclusion: The future of your firm depends on the people within it. Instead of following the crowd, create a workplace where employees know what “good” looks like and are incentivized to go the extra mile, so you attract a workforce that wants to live your values.
