Over the past decade, professional services firms have transformed how they assess, develop,and reward employees. The 2024 Evolving Employee Performance Management in the Professions research project highlights key trends shaping performance management today, including the shift towards frequent feedback, the role of technology, and the challenges of hybrid working.
Key findings from the 2024 research project
- A hybrid approach delivers more frequent feedback. While 80% of firms still conduct annual or biannual performance reviews, informal check-ins are becoming more frequent. Over 64% of client-facing employees and 60% of corporate services employees now engage in at least quarterly feedback conversations. This hybrid model balances structured formal evaluations with less formal one-to-ones.
- Performance metrics are still financially driven. Personal financial performance remains the dominant measure for senior client-facing professionals. While business development and client relationships are also key, team-based financial metrics remain underutilised given the role played by senior employees mentoring and developing junior colleagues.
- Surprisingly, performance ratings are increasingly used. Contrary to industry predictions, more firms are using performance ratings. In 2024, 62% of client-facing employees and 61% of business services employees receive performance ratings—an increase from 55%and 43% in 2015. Firms use ratings to guide pay, promotion, and performance decisions.
- Difficult conversations remain difficult. Reviews are effective at providing recognition and identifying development needs. However, managing underperformance and having honest conversations remain difficult. Are managers and employees getting to the difficult things via a development conversation? Not a bad idea,if true.
- Project-based feedback is still the most under-utilised feedback tool. Only 40% of employees receive routine feedback on their projects. Accounting firms adopt this practice more consistently than law firms. In an age where learning is vital and continuous improvement matters, the low rate of routine project-based feedback is concerning.
- Hybrid working challenges feedback culture. Hybrid working has negatively impacted feedback culture in 32% of firms. Organisations are addressing this by scheduling in-office "anchor days" and leveraging technology to facilitate structured feedback.
- Technology adoption continues to grow. Over 70% of firms use performance and feedback software. Key functions include managing reviews (67%), tracking objectives (55%), and supporting 360-degree feedback (50%). Larger firms lead use though adoption rates are increasing across all firm sizes.
- The rise of AI. While AI adoption in performance management is still in its early stages, firms are exploring its potential to summarise feedback, analyse sentiment, and reduce bias in ratings. 92% of firms are exploring to intend to explore the use of AI in performance and feedback practices
Looking Ahead: Priorities for the Next 12 Months
According to the 2024 Evolving Employee Performance Management in the Professions research, firms are focusing on:
- Increasing feedback frequency through regular 1:1 check-ins.
- Improving manager training to facilitate effective performance discussions.
- Enhancing consistency across departments and offices.
- Building a stronger feedback culture that fosters open and honest communication.
- Integrating AI and technology to streamline performance management and reduce administrative burden.
As professional services firms continue to evolve their performance management strategies, the emphasis will be on balancing human insight with technology-driven efficiency to create a fair, dynamic, and data-driven approach.
Click here to download a copy of the 2024 Evolving Employee Performance Management in the Professions Report.
