While the market for HR-related consulting is a large and established one, it is currently undergoing something of a crisis, with clients demanding a more innovative, specialised approach to issues, and consulting firms struggling to adapt to these changes. This may be why the proportion of thought leadership (reports, articles, white papers, and books) which focuses on human resource issues fell in 2006.
Many of the topics under this heading can be classified as emerging, that is, only a small amount of thought leadership has been produced, virtually none of which is sector specific. Corporate culture and values, the role and future of the HR function and leadership are all issues which clients are concerned about but about which there is comparatively little material.
Towers Perrin produces by far the most material on this subject with 26 percent of the market, followed by Hewitt Associates (15 percent) and Hay Group (14 percent). Unfortunately, this is an area of thought leadership where quantity is absolutely no guarantee of quality.
Most of the HR firms struggle to find anything new to say about the issues they focus their attention on. Mercer and Hay Group stand out from a wide array of specialist HR firms, largely because they have something a little more original to say. Hewitt Associates produces more commercially astute material than most of its peer group: it succeeds in presenting issues that clients might choose to act on rather than just think about. But none of the specialist HR firms appears in the White Space top ten ranking of thought leadership quality.
Remuneration continues to generate the greatest proportion of HR thought leadership (nearly one-third of the total in 2006), almost twice as much as the next most important HR subjects: values/culture; recruitment/retention; and development. Although this proportion dwarfs all other areas, it is significantly less than last year, when remuneration accounted for half of all material. Clients and consulting firms, it seems, are shifting their attention elsewhere.
HR-related thought leadership is one of the most generic areas, with only one in five documents tailored to the needs of a particular sector. In the area of remuneration, the amount of sector-specific material has increased from 5 percent in 2005 to 11 percent in 2006. Healthcare and financial services are the most important sectors, as they were in 2005.
Interestingly, McKinsey produces by far the most material on organisational design and change with 37 percent of the market, and Accenture produces as much as Hewitt Associates and Towers Perrin on recruitment and retention.
With both the quantity and quality of their thought leadership in decline, the HR firms badly need to invest more time and resources in this business-critical activity. If they don’t, they may lose market share and business to firms with a broader base of consulting offerings.
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