How Professional Service Firms Are Keeping Their Doors Open During the Pandemic
The COVID-19 pandemic has been devastating for businesses around the United States and the world. The majority of business industries have felt the impacts from this virus. The professional services industry has not been immune.
Professional services firms are businesses that provide services to other businesses. These services are rendered by subject matter experts who have gone through specialized training. Professional services firms consist of these professionals who hold degrees or licenses from certified bodies or authorities. Examples of professional services firms include accounting firms, law firms, tax advisory firms, research and development firms, among others.
Many professional services firms were not prepared for a pandemic. Firms struggled to adapt to a work environment that did not include face to face meetings. The lack of preparedness was often due to a lack of having a disaster recovery plan or business continuity plan. The lack of preparedness was extremely evident inside of many professional services firms with employees feeling the brunt of turmoil. Hinge Research Institute published a study in March of 2020 titled “How Professional Services Firms Are Responding to the COVID-19 Disruption” that examined how employees of professional services firms felt about their companys’ COVID-19 response. 53% of the employees surveyed had mixed or poor feelings about their organizations’ adaptation to the pandemic. Of the 53% of neutral to negative respondents, 56% believed that their firm was not prepared for this type of crisis. Some firms that had continuity plans found that they were essentially useless.
The outlook for professional service firms is not all doom and gloom. A study released by the National Academy of Sciences indicates that professional service firm revenues were not impacted as severely as other industries such as retail, travel, and hospitality. This includes fewer reductions in their workforce and also in revenues earned. This is largely due to the ability of professional service firms to pivot to providing virtual services. This ability to pivot also enables professional service firms to ensure their critical business functions are able to continue if a proper disaster plan is in place.
Critical business functions are functions within a business that are crucial for the operations and survival of the organization. These are essential activities that deliver the key products and services that generate revenue for the company. Identifying, monitoring, adapting, and updating critical business functions are part of the continuity plan.
To identify its critical business functions, a professional services firm must consider all the following aspects of a function:
How it supports the goals of the firm
How frequently the function is needed or performed
Why the function is needed or the context of the activity
Any compliance issues related to non-performance, such as fines, penalties, legal actions, lost revenue, etc.
Impact of the function on the overall reputation and market share of the firm
The priority of the function
Professional services firms have started to modify their critical business functions to allow for continued business operations during the pandemic. For example, some firms have enacted a digital and telecommute policy(s). These firms have upgraded their functions to enable employees to work remotely without the need for physical presence in the office. Similarly, other firms have outsourced any non-critical business functions or where possible, postponed them.
Some professional services firms have been ahead of the curve and adapted to the rapidly changing situations. Other firms have had little time to change but have eventually caught on. These firms have had to remain cognizant of the necessity to continuously assess their operations and make important, sometimes difficult decisions to stay operational. It is also critical that management continues to communicate to employees how the business is changing and adapting. In the world today, it’s less-often optional, and more commonly a necessity.
Finally, as previously discussed, professional services firms provide a diverse range of services to clients. With the changes caused by the pandemic, the needs of the clients have also changed and will continuously keep changing. Therefore, to continue providing an essential service that meets clients' needs, firms should constantly monitor public health and safety updates, guidance from local, state, and federal health agencies, and adapt accordingly.