How Booz Allen's 'Future of Work' vision shapes hiring for today & tomorrow

Booz Allen Hamilton is rolling out the firm's post-pandemic future of work and goes into that knowing there is still much to learn -- even if much has been learned in the current environment.

Booz Allen Hamilton likely knows that it and other companies are going into a bit of unknown territory regarding the post-pandemic future of work. Some of that future may be now as Booz Allen and others start to roll out new visions of how work gets done.

McLean, Virginia-headquartered Booz Allen’s new model of work breaks employees out into three groups as explained by CEO Horacio Rozanski during the company’s second quarter earnings call Friday:

  • A small group of purely remote workers that already were such and will stay that way,
  • People that work full-time at government customer and company facilities
  • The hybrid workforce that will have a mix of telework and in-person collaboration

That approach is very similar to what other companies have told us in recent months, but we still present it as an allegory for how the rest of the government market is looking at the issue.

Rozanski expects the number of people in group number two to “proportionately decline from historical levels.” He said that is in part due to how government clients have been creative on remote and shift work given they have reduced occupancy rates at buildings during the COVID-19 pandemic.

For Booz Allen’s own offices, Rozanski said the firm is preparing to reopen them on Sept. 6 (the day after Labor Day) if the health and safety situation allows for it.

What that shift to a new working model means to the company’s financials however is apparently not top of mind for Booz Allen.

“I would put this in the too early to tell territory, there’s a lot to learn on this path and to understand,” Rozanski said.

But one key item of mutual interest to companies like Booz Allen and their government customers is to grow the overall public sector ecosystem’s talent base beyond the Washington, D.C. metropolitan region.

All of those entities have learned and routinely remind us that the National Capital Region is a highly-contested market for people. Companies and agencies also agree on the need to go into other geographic regions.

“I think this flexibility is great for that, and I think it's also great for people and to both attract and retain people, which is ultimately the driver of our growth and the driver of everything else” including profit, Rozanski said. “But the near-term goal is to make us more flexible.”

That feeds into how Booz Allen approaches its number one priority of growing the firm’s workforce, which is up 4.3 percent over the prior year’s second quarter to 28,558 employees. Included in that increase are nearly 600 employees from Liberty IT Solutions, which Booz Allen completed the acquisition of in June.

Some dynamics when it relates to hiring are not repeatable from what happened last year as the country entered the first few months of the COVID-19 pandemic. People did not take time off and that extra utilization pretty much became new headcount.

“It didn't make sense to keep pedal to the metal on (hiring) and it didn't make sense to force our team to really drive down that path at the time where we were worried about people's emotional health, we were worried about running the business efficiently, delivering on contracts and so forth,” Rozanski said.

Recall the firm also launched a $100 million resilience fund and other efforts in the wake of the pandemic to focus on employee well-being as they continued to perform their jobs as well as they could.

“We had a view that change in productivity back to normal levels was going to happen this spring, not last fall, and that was the one thing we misread,” Rozanski added. “With the benefit of hindsight and looking forward, maybe we would hedge our bets a little more on when would things turn in an uncertain environment and think about that a little more carefully.”

Booz Allen left its current fiscal year financial outlook unchanged at revenue growth of between 7 and 10 percent over fiscal 2021’s $7.86 billion. The firm also reiterated its expected margin on revenue of middle-10 percent adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

Second quarter revenue was up 1.7 percent year-over-year to $1.99 billion, while adjusted EBITDA rose 11.8 percent to $238.1 million.