Eight emerging and evergreen issues testing professional service leaders this year – and how to overcome them.
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Professional service leaders are facing what feels like a perfect storm right now, as evergreen operational pressures collide with emerging challenges.
AI and technological transformation represent both significant opportunities and challenges for project-based firms, where managing time and human talent are key to business success.
Meanwhile, economic uncertainty is turning up the heat on longstanding operational issues like efficiency, capacity planning, and data access.
Here’s our take on the new operational challenges facing professional service leaders this year, and what to do about them.
Microsoft declared 2025 ‘the year the Frontier Firm is born’ – heralding the AI early adopters creating hybrid human-AI workforces. As AI automates more tasks, businesses have the opportunity to rethink how teams are structured and where people add most value. But some leaders feel under undue board and stakeholder pressure to cut headcount now, before AI efficiencies arrive.
Commenting on a Morgan Stanley report that AI had caused 8% net job losses in the UK, the Work AI Institute warns:
Executives are conflating early tool investment and adoption with license to reduce headcount, often before demonstrating genuine productivity gains. UK boardrooms appear particularly susceptible to cutting first and measuring later - a dynamic potentially driven by shareholder pressure, cost-saving mandates following economic uncertainty, and a political climate fixated on headcount efficiency.
Put simply, many businesses are under increased pressure to reduce headcount, and they’re banking on future AI gains to do it. This risks damaging cuts that undermine current productivity. Fortunately, many professional service firms are actually well placed to manage this process, thanks to their collection of utilization data.
Utilization data captures how teams and individuals are actually spending their time: which projects or tasks they’re working on, how much capacity they have available, and which skills are being consistently used or underused.
By analyzing this data, leaders can identify opportunities to optimize their workforce. For example, firms can:
Utilization data helps professional service leaders align resources with demand while maintaining productivity, quality, and client satisfaction. Plus, ensure that any efficiency gains are driven by strategy rather than cuts based on guesswork or gut feel.
Discover more about how to use utilization data.
Businesses are under growing pressure to digitally transform their operations or be left behind by competitors – especially as some sector reports find as much as 40% of budgets dedicated to transformation projects.
As a software vendor, we support companies investing in technology to execute their operations strategy more efficiently and effectively. However, where many professional service firms fall down is underestimating the potential impact of digital transformation on people, processes, and projects.
Transformation projects reconfigure workflows, roles, and organizational habits. This can be resource-intensive – demanding the time and talent of team members to implement the projects – as well as disruptive for end users. For service providers, this can result in temporarily reduced capacity for client work. However, this productivity reduction isn’t always accurately factored into resource planning.
Plus, when firms try to adopt and implement new technologies faster than internal resources can absorb the change, it can result in overutilization, cognitive overload, and burnout. And that’s bad news for transformation projects and client commitments – not to mention staff satisfaction and retention.
Professional service leaders tasked with improving operational efficiency through new technology and AI can mitigate this risk. Here’s how.
By planning transformation around people and capacity, rather than treating it as a disconnected project, leaders can ensure innovation strengthens rather than hinders their ability to deliver for clients.
Read how Runn makes implementing a resource management platform easy.
As global economic uncertainty affects the market, professional service firms are likely to feel this as:
Each of these factors makes it harder for professional service firms to plan work, manage capacity, optimize utilization, and – ultimately – keep financial control.
It’s when the future is unclear that project-based businesses most need operational visibility – a transparent, real-time view of people, projects, and capacity.
In a recent webinar – How to Elevate Operations with Efficient Resource Management – our panelist Nicola Armstrong compared resource management to Tetris. You need to see all the pieces, where they fall, and how they fit together. Only then can you confidently move things around to clear work efficiently. Without that visibility, pieces fall badly, gaps appear, and things build up until they overwhelm you.
Firms that have a dedicated resource management are best placed to weather economic storms because they have the project and people visibility they need for fast pivots when demand changes. For example:
Professional service leaders might question the logic of investing in new tools when revenue isn’t as predictable as in the past. But a resource management platform is a catalyst for smarter, more agile operations – something that serves professional service firms especially well during financial storms, and continues to deliver value when the clouds have lifted.
For all the disruption brought about by AI and economic pressures, some aspects of professional services leadership remain consistent – consistently challenging. Longstanding operational issues are currently magnified, as technology and market expectations widen the gap between firms that manage them well and those that don’t.
As technologies advance, the skills required across professional services are evolving – but those skills are in short supply. Attracting, retaining, and reskilling talent is now more critical than ever to remain competitive. That means a stronger focus on employee satisfaction, employer brand, and retention rates. Balancing workloads, reducing burnout, and providing skills-aligned assignments can all help.
With the promise of AI-powered automation yet to be fully realised, overloading teams remains a risk. Overutilization negatively impacts productivity, delivery, and quality. Balancing capacity, workload, and well-being remains an enduring leadership challenge.
In Runn’s State of Resource Management 2026 report, only 9% of respondents said they fully trusted their data. Technological transformation risks fragmenting systems and data sources further. Professional service firms need to prioritize systems that provide live and reliable data for confident decision-making during uncertain times.
Revenue margins are under pressure from rising costs, client expectations, and operational inefficiencies. Maintaining financial health requires careful project planning, utilization monitoring, and proactive resource management to ensure your project profits don’t get eroded by avoidable costs.
Hiring new talent is costly and, as budgets tighten, developing existing employees is often a smarter approach. But it’s hard to know who wants to grow which skills. Professional service firms need a way to understand individual career development goals, to match them to assignments that upskill them to meet future business needs.
These challenges demonstrate why resource management software is a valuable investment, whatever the economic climate. With greater visibility into projects, people, and capacity, professional service firms can manage both perennial and more pressing operational issues – and ensure efficiency, profitability, and well-being are always achievable.
Whether you’re tasked with emerging challenges like AI adoption – or enduring issues around capacity, utilization, and profitability – Runn provides the visibility and data you need for confident and proactive decision-making. Try Runn for free here.
