What happens when the experts face disruption? According to McKinsey, the professional services sector is leading the charge in AI adoption, with Worldmetrics reporting that 45% of firms have already implemented AI solutions to automate tasks and enhance efficiency.
Just like in any industry, professional services are poised for big changes in the next 5-10 years due to advancements in technology, evolving business models, a shifting talent landscape, and emerging competitive forces. If you’re currently in the field or aspiring to join, here’s what you can expect—and how you can prepare for it.
How Professional Services Jobs Differ from In-House
As someone who has been a hiring manager in both professional services and product companies, and has scaled organizations globally, I’ve observed that professionals in this field need a specialized set of skills that go beyond what is typically required in-house. Here are some key differences:
- 0 to Functional speed: Unlike in-house roles where there is usually an expectation of a ramp-up period, professionals in services are expected to add value almost immediately. The client’s perspective is that the “meter is running” as soon as you walk in the door. This means being able to deliver results quickly, often within days—or even seconds. There were times when I would be pulled into a meeting room and expected to say something insightful on the spot.
- Comfort with Change and Ambiguity: In professional services, you rarely have the luxury of fully knowing what you’re getting into. The environment is often fluid, and you need to be adaptable, comfortable with change, and ready to operate in situations that lack clarity or stability.
- Navigating Organizational Politics and Building Relationships: Success in professional services hinges on the ability to build strong relationships and navigate the often tricky organizational politics of the client’s environment. It’s crucial to gain trust and influence without getting entangled in conflicts, maintaining a professional balance at all times.
- Guiding and Supporting the Client: Our role is to be the trusted advisor who supports the client in achieving their goals. This involves helping them look good in front of their stakeholders, making the case for necessary changes, and guiding them through complex decisions. The goal is to be the person they confide in and rely on, without seeking recognition—taking pride in their success from the background.
- Providing Fresh, Strategic Thinking: In professional services, you are exposed to a wide range of companies and industries, which gives you a broad perspective on common challenges and innovative solutions. Engaging with multiple CXOs and understanding the inner workings of diverse organizations enables you to bring fresh, strategic insights to each client, helping them stay ahead of the curve.
- Exceptional Communication Skills: Whether you’re interacting with daily contacts or presenting to an executive sponsor, the ability to convey ideas clearly and manage expectations is essential to maintaining strong client relationships and delivering successful outcomes.
Now that we’ve looked at a few of the intricacies that define success in professional services, let’s look at some of the broader macro trends in the space.
Trends Transforming Professional Services
More Productized and Subscription-Based Offerings
Client expectations in the professional services sector are evolving rapidly. According to Consultants 500, corporate buyers are increasingly focused on value, demanding fixed fees, greater pricing transparency, and more flexible purchasing options. Some are even tying performance to payments. As many as 37% of service firms are already using or experimenting with subscription models according to Exact. Subscription offers more predictable revenue and helps customers be more flexible and loyal. This disruption in business model will lead to changes in how firms manage their workforces.
Pandemic-Accelerated Digital Transformation
A Salesforce report shows that more than one-third of firms now expect 75% or more of their revenue to come from digital channels within the next three years—three times as much as in 2019. Paul Stillmank, CEO of 7Summits, explained that virtual collaboration provided quick data and insights that traditional methods couldn’t, helping teams make better decisions and tailor proposals to clients. The report also found that 87% of professional services leaders feel their digital transformation has sped up since 2019, compared to 79% in other industries. This shift to digital also helps firms operate more globally, making teams more efficient and able to scale up more easily.
Competition from Fractional Leaders
The rise of fractional leaders—experienced professionals working part-time at senior levels—might challenge professional service firms. The Bureau of Labor Statistics reported an 18% increase in fractional jobs from 2021 to 2022, with a staggering 57% rise from 2020 to 2022. This trend reflects a growing preference for flexible employment patterns and contract work, where companies can access high-level expertise at a lower cost compared to traditional consulting arrangements. Fractional leaders can be embedded with their clients and develop deep relationships and understanding of the business. They can offer some of the same services as professional services firms for a lot less money.
Leveraging Data for New Revenue Streams
Professional services firms are starting to see the value in the data they produce during their operations, often called “data exhaust,” as a new way to make money. For example, ADP’s payroll and HR services create large amounts of data, which is anonymized and turned into useful insights for customers, governments, financial analysts, and researchers. Similarly, CARFAX uses vehicle data, and Kastle Systems tracks trends in companies’ return-to-office patterns. By using this data, firms can create new income streams and offer valuable insights to clients. Big firms like McKinsey, BCG, Accenture, Deloitte, and PwC have also invested a lot in building their own unique data sets. These data assets give them an edge when there isn’t enough external data available. This offers firms new revenue streams that aren’t easy for others to copy.
How AI is changing the game
AI is Raising Expectations
AI is changing the game in professional services, pushing teams to do more with less. According to Ethan Mollick, a professor at Wharton, a study with Boston Consulting Group found that using AI improved the quality of work by 40%, sped up tasks by 26%, and increased the amount of work done by 12.5%. These improvements came from using AI tools straight out of the box, without any special training. Researchers have found that AI support can make it easier to train new workers and raise the performance of middling employees.
AI will allow teams to accomplish more with fewer people, making processes smoother and reducing the need for heavy project management. By 2030, McKinsey projects up to 30% of the work hours in the U.S. could be automated, driven by generative AI. However, AI will likely enhance jobs rather than replace them, especially in fields like STEM, business, and law. According to a Workday report, 84% of professional services leaders feel pressured to adopt AI tools quickly to stay competitive.
Specialists vs. Generalists
Most roles will be for generalists able to complete a variety of tasks and support from AI. Specialists will likely work on strategic projects part-time while generalists handle day-to-day tasks. Specialists can build deep expertise in valuable areas and take on fractional or consulting work with lots of flexibility. Generalists can be more creative and less limited by functional skills and formal requirements for taking on certain roles.
Competition from Big Players
Big companies with access to vast amounts of data and lots of compute could pose a threat to smaller firms. Instead of just seeing AI as a way to save money and time, look at ways to serve customers in a more deeply connected way or as a way to reach customers haven’t been interesting to you in the past.
Relearning How to Work Together
As teams become more capable with AI, the traditional ways of working together will need to change. It’s going to get complicated when people can do more without formal training. Teams will need to be more flexible in how they collaborate and define their roles. Leaders with strong communication and people skills will be essential during this transition, as the demand for social and emotional skills is expected to rise significantly. I really hope that if AI handles my annoying admin tasks I will have more time for coaching.
Increased Company Customization
Clients will come to expect custom solutions tailored to their industry, business and unique needs. This will drive companies to better understand these needs and develop offerings that are configurable and customizable while still being able to manage and scale operations. Understanding client needs and crafting custom solutions that will align with the overall roadmap. Discovering ways to do predictive analytics and offer valuable insights to clients and support their implementation.
Making the personal touch more important
Even with AI, the human element remains critical. According to a Salesforce report, 79% of professional services respondents believe that expanding relationships with key accounts is vital for company growth. Clients need people who truly understand their organizations and can address issues with care and empathy. During my coaching certification with BetterUp, I learned how essential it is to make observations, reflect, and summarize to support clients effectively. A well-timed, courageous intervention by a person, based on reading a client’s emotions, can have a much bigger impact than any AI tool can achieve.
What This Means for You
To stay relevant, you’ll need to focus on continuous learning and skill development:
- Start by taking advantage of free courses on platforms like Coursera, where you can learn new skills related to AI and machine learning.
- Focus on developing skills that make you stand out, such as problem-solving, critical thinking, and strategic planning. These abilities will complement AI tools and increase your value as an employee.
- This period of change will test team dynamics and relationships, so strong people skills and a willingness to have open, sometimes difficult conversations will be important.
- The personal touch remains essential. Invest time in building meaningful relationships with your colleagues, clients, and prospects, and work on becoming an effective coach.
- Cultivate your reputation and expertise. If you ever find yourself working independently, having a strong personal brand through writing, speaking, or creating content can be incredibly valuable.
About the Author
Jessica Hall is a Knownwell AI Advisory Board member and a leading voice on how UX will change in the age of AI. She has spent more than a decade on the cutting edge of innovation, design, and product leadership, a combination that gives her a unique perspective on how AI experiences can impact business growth. She is the VP of Design for CoStar, a publicly-traded global leader in the digital transformation of the $300+ trillion real estate industry, and a sought-after speaker on topics including product leadership in the AI era.
