To keep the top talent, professional firms must retire the 9-to-5

To keep the top talent, professional firms must retire the 9-to-5
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Before the pandemic, many associates at professional service firms — e.g., consulting, financial, legal and accounting — spent long hours in the office. They often tried to maximize face time by staying late at their desks to impress their boss. During the pandemic, however, these associates worked from home. The practice of face time broke down since the boss could not see the associates slaving in their offices late at night. Yet, foreshadowing the future, the work at these firms was done well at home.

To continue to attract top talent and improve productivity, professional service firms must shift away from their traditional emphasis on counting hours to a focus on actual results. Although hours are easy to measure, they are a poor proxy for productivity in a knowledge-based organization. Who cares about the number of hours you worked if your product is bad — a boring presentation or a weak analysis? And if your presentation or analysis is excellent, will you be criticized because you did not spend a lot of hours generating the product? 

Nevertheless, many senior executives are reluctant to give up counting hours unless they have a replacement system to hold their employees accountable. When employees are spending days at home, how does the boss know that they are working instead of playing video games or going to the beach? To move from inputs to outputs, professional service firms need a way to define clearly what they are trying to accomplish. While setting forth objectives is a good starting point, they are too general and vague to hold employees accountable.

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To make sure that everyone knows what should be accomplished in the relevant time period, managers should agree with their teams on success metrics. For example, it is not enough to set the objective of improving customer service over the next three months. That could have a very different meaning to different people. Instead, the team needs measurable success metrics such as processing transactions more accurately, responding to phone inquiries more quickly, and increasing the firm’s net promoter scores from customers.  

Success metrics can dramatically improve the working environment of a professional service firm. They increase communication by clarifying for team members what the boss really wants them to accomplish. They discourage micro-management since team leaders will know what the deliverables will be at the end of the relevant period. Most importantly, they afford a high degree of flexibility to team members. As long as team members hit the success metrics, they can work wherever and whenever is best for them.   

Success metrics provide concrete guidance to teams working in complex hybrid environments, partly at home and partly in the office, which will become the dominant approach at professional service firms. Although several prominent CEOs have called for all employees to come back to the office close to full time, it makes no sense to have one uniform rule. Nor should these choices be left entirely to each employee. Any large professional service firm is a conglomeration of different teams with different functions — e.g., strategic analysis, marketing-sales, customer service and IT support. Therefore, the comparative benefits for the team should determine the optimal combination of days at home and days in the office.  

Senior executives typically cite several benefits for having employees in the office. First is more innovative thinking, which is stimulated by informal contacts in the office. Second is forming strong relationships with institutional customers and other key clients. Third is the apprenticeship model, whereby younger professionals learn how to analyze problems and deal with clients by observing the behavior of their seniors. A final benefit is maintaining culture, as employees see how their company’s leaders treat their subordinates and their clients.  

While all these benefits are significant, they do not require employees to spend every day in the office. For example, a financial advisor can create strong client relations through in-person meetings, which are then followed by video calls. Young lawyers can learn analytic skills and absorb the firm’s culture if they directly observe the behavior of their seniors a few days each week. And a consulting firm can organize brainstorming sessions on the days when everyone is in the office.

On the other hand, employees of professional service firms have come to appreciate the benefits of working from home. They can recapture many hours by not commuting to the office. This additional time and flexibility can be used partly to meet family obligations — which are important to increasing firm diversity. Remote employees can avoid the high level of unwanted interruptions, inherent in most offices, which undermine anyone’s ability to do concentrated work. Moreover, as COVID infections rise, many employees will be reluctant to spend long days in high-rise buildings.  

After considering both sets of benefits, managers should select and implement an optimal hybrid structure for their team. They should expand the tech tools and other resources provided to professionals working from home during the pandemic. They should hold regular one-on-one meetings to make sure team members are coordinating well and not suffering from social isolation. They should set ground rules for the team, limiting hours of availability and the length of meetings. Instead of formal annual reviews, they should provide team members with regular feedback based on how well they met their success metrics.  

Professional service firms have a historic opportunity to reinvent their workplace by empowering team leaders to design a customized hybrid model and adopt success metrics focused on desired results. Such a workplace will not only attract talented professionals and enhance their productivity but will also set a better standard for the professional service sector.         

Robert Pozen is a senior lecturer at MIT Sloan School of Management and former president of Fidelity Investment. He is the coauthor of "Remote, Inc: how to thrive at work wherever you are" ( Harper Collins 2021).