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Slide 1: Staff retention A key challenge for the Management Consultancy sector Tony Restell, Director & Co-Founder Top-Consultant.com +44 (0) 207-667-6880 tony.restell@top-consultant.com

Slide 2: Breakfast Briefing -- Discussion Points • Retention rates – key facts & future trends • What impact can you expect to have on your firm’s retention rate? • How to improve retention rates amongst: • The regular consulting workforce • Early leavers • Long-serving consultants

Slide 3: These findings come from Q1 surveys of 140 management consultancy recruiters and 700+ employees of consulting firms Top-Consultant.com Q1 Recruiter survey We targeted recruiters from the management consultancy industry – both HR managers / HR directors from within consultancies and recruitment consultants focused on the sector. 140 recruiters took part in the survey Top-Consultant.com Q1 Candidate survey We targeted consulting candidates from our Get Headhunted CV database and over 700 took part in the survey during the last weeks. Dozens of responses from consultants at each of the major brands (Accenture, Atos Consulting, BearingPoint, BT, Capgemini, etc.) and a good spread of respondents from smaller niche firms too All responses to these surveys were collected online – though no reason to think that an online audience of consultants / recruiters is not representative of the industry

Slide 4: The median staff turnover rate was 10.3% last year, though this figure flatters the industry owing to the performance of smaller firms What staff attrition rate has your consulting business experienced in the last year ? Staff attrition rates during 2006 0-5% of consulting staff have left in the last year 5-10% of consulting staff have left in the last year 10-15% of consulting staff have left in the last year 15-20% of consulting staff have left in the last year 20-25% of consulting staff have left in the last year Average = 10.3% 25%+ of consulting staff have left in the last year Source: Top-Consultant.com Recruiter Survey Q1 2007

Slide 5: A more accurate figure for the industry would be closer to 20% as demonstrated by our survey of 700+ consultants What staff attrition rate has your firm suffered in the last year ? Source: Top-Consultant.com Candidate Survey Q1 2007

Slide 6: Retention is likely to get tougher still - 80% of candidates and recruiters expect a deterioration in 2007 No let-up in staff attrition expected - recruiter responses almost identical to candidate responses Candidates: do you believe it will be harder for employers to keep consultants this year given the current market conditions? 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Much harder A little harder No harder Easier Source: Top-Consultant.com Candidate Survey Q1 2007 & Recruiter Survey Q1 2007

Slide 7: What impact can you expect to have on your firm’s retention rate?

Slide 8: Achieving best in class retention results in a massive financial upside  A poor employee Best Practice vs. Worst Case experience drives new 100.00% recruits out in less than 1_ 90.00% years on average 80.00% % of consultants 70.00% 60.00%  A great employee 50.00% experience extends tenure 40.00% to an average of 3_ years+ 30.00% (and in many cases 20.00% considerably longer) 10.00% 0.00% < 1 year 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8+ years  With firms targeting an years years years years years years years average cost-per-hire of Length of tenure with employer £5,000 this difference translates into a massive Shortest tenure Longest tenure additional recruitment bill (~£10million for a 1,000 strong consultancy over a Source: Top-Consultant.com Candidate Survey Q1 2007 4_ year period)

Slide 9: According to candidates it is remuneration, project quality and work/life balance that are the key retention factors 2007 2007 2005 Position Retention Factor score Position Change 1 Firm has better remuneration / pay than the competition 5.42 2 +1 Firm involves consultants in the staffing process - allowing 2 consultants to influence which projects they are assigned to 5.17 1 -1 Firm has a culture where evening and weekend work is 3 discouraged 4.78 6 +3 4 Firm invests heavily in staff training 4.78 3 -1 No 5 Firm offers flexible working hours 4.59 5 change Firm manages client expectations to ensure consultants are not 6 expected to be away on client site 5 days a week 4.51 4 -2 Firm actively encourages consultants to work from home if No 7 desired 4.01 7 change Firm tries to foster great morale / team spirit by organising regular No 8 social events and team activities 3.81 8 change Firm will allow consultants to take sabbaticals / extended leaves No 9 of absence 3.78 9 change No 10 Firm sponsors MBA studies 3.44 10 change Firm shows willingness to accommodate consultants who wish to No 11 move to the countryside rather than living in the city 3.21 11 change No 12 Firm provides a creche / nursery facilities 1.98 12 change

Slide 10: Recruiters report that the reasons being given in exit interviews are very similar – remuneration, work/ life balance and quality of projects Better remuneration packages on offer at other firms 55.07% Career prospects (promotion track) looks more promising elsewhere 52.17% Too much time spent travelling leading to dissatisfaction with work/ life balance 30.43% Dissatisfaction with quality of consulting assignments being staffed on 24.64% Employee wants to work in a smaller consulting organisation 23.19% Employee wants to work in a larger consulting organisation 20.29% Evening & weekend work leading to dissatisfaction with work/ life balance at current employer 18.84% Remuneration and promotion policies deemed to be intransparent or unjust 16.67% Desire to move overseas or move location 14.49% Employee feels let-down by current employer 12.32% Inadequate staff training at current employer 5.80% Lack of MBA sponsorship at current employer 0.72% Source: Top-Consultant.com Recruiter Survey Q1 2007

Slide 11: How to improve retention rates amongst: o The regular consulting workforce o Early leavers o Long-serving consultants

Slide 12: Taking steps to improve retention rates amongst the “regular consulting workforce” may be costly and may just postpone the inevitable What the “regular consulting workforce” Issues and costs want: Consultants want to secure better Once applied across the firm can prove very remuneration expensive – and easily negated by a competitor’s counter-move ** Consultants want greater influence over the Likely to lead to more time on the bench and projects they are assigned to lower utilisation rates if applied across the firm – but could be selectively targeted at staff deemed to be “at risk” of leaving Consultants want a change in culture so that Looks like the most cost-effective measure, but evening and weekend work is discouraged and needs leadership and buy-in from the most work/ life balance is improved senior figures in the firm ** 51% of firms taking measures to improve retention in last 12 months have raised remuneration

Slide 13: By contrast, overcoming a problem of “Early Leavers” is predominantly a question of tackling management problems within the organisation “Early leavers” cited lack of face-time with management, lack of guidance, poor management / consultant relationships, uninspiring leadership… poor management 7% 2% 10% 29% office politics poor projects 10% better opportunity elsewhere poor career development poor pay 13% 15% work/life balance 14% better offer Source: Top-Consultant.com Candidate Survey Q1 2007

Slide 14: By contrast, long-serving consultants are most likely to move on because of a lack of career development and uninspiring consulting assignments “Long-servers” cited a lack of actual career progression combined with a perceived intransparency in their intended career path; plus dissatisfaction with the variety and challenge of assignments being won poor career development 4% 3% 5% 24% poor projects 9% poor management poor pay work/life balance 14% better opportunity elsewhere 22% office politics 19% better offer Source: Top-Consultant.com Candidate Survey Q1 2007

Slide 15: Any questions?