The rise of AI has put serious pressure on professional services firms to figure out hiring and training strategies as an industry built to sell knowledge faces a knowledge gap as a new era enters the workforce with skills very different from the cohort ahead of them, writes Maria Ward-Brennan.

Much of the conversation about the future workforce in the professional services sector has focused on how its traditional structures will change. The ‘pyramid’ model, in particular, has come under scrutiny as firms are expected to reduce graduate roles as AI rewrites the playbook on hiring, training and career development.

Over the summer, several leaders told about the pressure they feel to get the rejig of their training and hiring restructuring right.

This debate comes at a turbulent period for the sector, especially in consultancy, as AI and the economic downturn are dragging fees down for the giants.

The industry now faces headaches over how to rejig training programmes for their juniors as Gen-Zers enter the workforce skilled in AI but lacking much of the critical thinking and interpersonal skills needed in roles that sell knowledge to clients. Not surprisingly, unlike millennials or boomers who had to adapt to AI mid-career, this group of new professionals experienced the early AI boom, with the launch of ChatGPT in 2022, right in the middle of their university degrees.

The new cohort of juniors, born between 2002 and 2005, have joined legal, consultancy and accountancy firms with an established knowledge of new technology, out-toeing partners in the new world of tech and AI, but they often lack the simpler skills: picking up the phone to clients, pitching for business or making a judgement call without using an AI tool.

These foundational skills are so lacking among juniors that City law firms have had to roll out mandatory communication-skills training for junior lawyers. Addleshaw Goddard and Winston Taylor told  that their mandatory training focused on how to speak on the phone and deal with clients in person.

The need for this skill issue isn’t limited to one geography either. The Wall Street Journal reported on Monday that Big Four giant EY’s US unit said it will invest $100m (£73.8m) to recognise staff who show skills such as judgement and adaptability with an award that will appear on their pay cheques, as the firm seeks to tie a financial benefit to the skills it is aiming to bring back out in the post-AI world.

Trusting bots too much is costly to reputation

While there are advantages to being a digital native, a reliance on AI can have a knock-on effect on people’s critical-thinking skills, according to a study by the Massachusetts Institute of Technology (MIT) in June, which also highlighted that constantly relying on bots may also reduce people’s ability to discern misinformation.

This is an alarming problem for the professional services industry, where juniors trust AI bots too much. When AI hallucinations occur, they may miss it when someone with experience would catch it. This issue has become a major reputation problem for some firms, especially the Big Four giants and some notable law firms, as AI hallucinations have flooded clients’ reports and even legal documents submitted to courts.

However, sector leaders must also accept that updating training programmes to match the new cohort of juniors won’t be enough. Each year for at least the next five years, juniors will come in with different skill sets depending on when AI entered their lives, meaning businesses need to adapt. The current batch of 21- to 22-year-olds who had GenAI introduced in their university years could have more interpersonal and soft skills than those who had it introduced in their GCSE years.

As the landscape continues to shift, firms that depend on these young adults to become the next generation of leaders will need to prioritise not just technical expertise, but the timeless value of common sense, sound judgement, and human connection to ensure lasting success in the AI era.

‘Beyond The Billable’ is a weekly column focused on the professional services industry.