Throughout the economic downturn, professional services firms in the accountancy sector have continued their global expansion at a ferocious pace, yet have had to become more specialized in the service lines they offer. This is undoubtedly driven by client demand, on two fronts.
First, most clients of professional services firms, including those in the mid market, are known to have international growth as a key part of their own strategies. Second, those same clients are, more often than not, seeking the same level of specialist expertise that they receive in their ‘home’ market in the new territories into which they are expanding.
This dual demand is creating something of a challenge for professional services firms looking to capitalize on what is already quite a complex growth opportunity.
In certain countries in Asia for instance, we are seeing increasing demand for these specialist skills from international firms expanding in the region, yet the local firms are reluctant to pay what it takes to hire the individuals with these skill sets from other markets. They believe their clients will not be willing to pay ‘London rates’ for something that they, more often than not, remain unconvinced they actually need on a full time basis.
As a consequence firms, at a global level, frequently have to support their overseas clients by utilizing staff from offices in more established markets to support the local firm, which raises the question: “Who will pay the difference in charge out rates?”
In conclusion, as some firms are already doing, the global network needs to help the local offices determine where investment is required and gain a consensus from local decision makers, helping them to understand the value of the offering and what to expect from it.
More often than not they may even need to go a step further and invest capital to support the offering. Beyond this, the local partners will need to have a more open mind to expats joining the firm, if only to help establish the business before training and developing local talent and building a succession plan.