How HR can drive the service profit chain

Living the principle of the service profit chain has been fundamental to the success of the largest information management consultancy in Australia and New Zealand, Altis Consulting, according to its head of HR.

At the heart of the service profit chain principle is the idea that a happy, engaged team equals happy, loyal clients, which leads to better profits, said Altis’ people and performance manager, Nadine Hamilton.

As a business whose product is its people, she said Altis Consulting is very particular about the kind of people it brings into the business.

“We hire people more for their cultural fit (the Altis ‘mojo’) than just their technical capability,” she said.

However, there are a finite number of skilled resources in the Australian data warehousing and business intelligence market, and many already work for Altis.

“I think our biggest challenge in recent years has been getting the right people,” said Hamilton.

“HR strategy is intertwined into the business. We’re not a product business; we are a people business”

“Australia is a small market because we’re a specialist organisation, so there’s only a finite pool of talented people that we can draw upon and that means that our people are in demand as well.

“Our team members are continually pursued by competitors. We’ve strived to maintain our culture, reinforce the values of Altis and what it means to be part of our team.”

This is reflected in the company’s low attrition rate (8 per cent for FY13/14), while more than 50 per cent of new hires in the past year have been through staff referrals. In fact, the size of the Altis team has increased 30 per cent from FY10/11 to FY13/14.

Today, Altis Consulting is the largest information management consultancy in Australia and New Zealand with some 85 staff across four offices as well as an office in the UK.

It has four key disciplines that cover data warehousing, data management, business intelligence and business analytics – delivered via a number of services that cover strategy, planning and architecture, vendor selection and managed services.

Altis Consulting has also been recognised in the Best Places to Work study four years in a row – 2010, 2011, 2012 and 2013.

The HR strategy of Altis Consulting is somewhat unique compared to other businesses, according to its CEO, John Hoffman, who said that it is actually a foundational layer for the success of the company.

“HR strategy is intertwined into the business. We’re not a product business; we are a people business,” he said.

“So HR is critical to the delivery of the service profit chain, which resonates very well with how a consulting team needs to function to be successful.”

“We’ve strived to maintain our culture, reinforce the values of Altis and what it means to be part of our team”

Hoffman, who reports directly into the two co-founders of the business (who now serve as directors), said the service profit chain has served Altis remarkably well in growing its business and servicing both new and existing clients (who make up 80 per cent of revenues on an annual basis comes) through recognising the importance of its people.

“We’ve been very diligent around hiring ‘A-people’. We’re also quite dogmatic about it in regards to also letting people go if we don’t think they are of that quality,” he said.

“They don’t have to be the most experienced professional, but they do have to have the right teamwork skills and personality traits around problem solving and working together to get things done.”

“We give our people a lot of opportunities to challenge themselves and take accountability for their own personal growth,” says Hoffman, who believes this variety is part of the reason why average tenure is now over five years.

“There are different career paths, different opportunities and different challenges, and they’re empowered to go pursue those and they are supported in taking them on.”

For the full story on how HR helps to drive the service profit chain and drive business outcomes in Altis Consulting, see the current issue of Inside HR magazine.