Consultancy sector continues to grow, up 8% in 2019, according to latest survey, as UK clients embrace technology transformations
20-Jan-2020 – (Top Consultant)
- Over a third of firms exceed growth expectations in 2019 (34%) with digital transformation projects driving growth.
- Post-election, sector body, the MCA, warns the UK should not squander this opportunity in 2020 to reshape Britain and secure its competitive position in the world as a centre for entrepreneurship, innovation and digital leadership.
- 6% growth estimated for next 12-24 months with three quarters of firms expecting consulting activity to rise.
- A quarter of firms say driving sustainability efforts is the number one trend for UK businesses.
Strong growth in Britain’s world-class management consultancy sector is expected to continue over the next twelve months, according to the latest Annual Member Survey from the Management Consultancies Association (MCA). Despite a year of political and economic uncertainty in the UK, MCA member firms estimate growth for the sector was around 8.3% in 2019, slightly above the 7% growth rate the previous year. Continued expansion in Digital and Technology consulting and work with the Government and Public Sector continue to be the main drivers of growth, which is estimated to be around 6% in the next 12-24 months.
Over 500 consultants from a diversity of MCA member firms participated in the independent survey, conducted by Savanta, including Managing Directors, Heads of Consulting and Junior management consultants. The vast majority of firms said that consulting activity had met or exceeded expectations in the past 12 months (86%). However, compared to last year’s survey, a slightly larger proportion of firms stated that consulting activity had failed to meet expectations when compared with the previous year (3% increase for SMEs and 5% increase for larger firms). This was largely put down to external factors and the continued business uncertainty in the UK.
Those consultants who have seen expansion in 2019 cite several factors driving growth. These include a general increase in demand for specialist consultancy and improved client focus and relationship building. One senior partner in a large firm, said that “Sheer determination and focus on nurturing existing relationships during a time of economic and political uncertainty” had ensured growth. Only 40% of senior consultants said their firms had been engaged with clients preparing them for Brexit.
Looking ahead, MCA members continue to show optimism about the industry’s future with 76% expecting consulting activity to increase in the next 12-24 months, albeit a slight decline from the previous year (86%). Sectors expecting to see particularly high growth are Digital and Technology and Government and Public Sector followed by Infrastructure; Health and Life Sciences and Energy and Resources.
MCA members firms are increasingly being asked by businesses to advise them on environmental and sustainability issues and around a quarter of consultants highlight sustainability as a key focus area for the industry in the coming years. The biggest trends include reviewing business models for sustainability (25%), identifying evolving customer sustainability expectations (22%) followed by detecting risks with climate change (16%).
Tamzen Isacsson, Chief Executive, MCA, said:
“The UK is proud to have one of the biggest and most well-respected consulting sectors in the world and despite the political and economic turmoil of last year, our industry continued to experience strong growth and meet the increasing demands from public and private sector clients. This year, as we redefine our position in the world, the UK must not squander the opportunity to make a step change in how Britain works, improving our global competitiveness and embracing innovation and technology across our country. We can’t afford to lose this chance and it is imperative that, in partnership with government, we ruthlessly focus on boosting productivity, developing digital skills and securing our competitive position in the world as leader in professional services and data. Our members are positive about the outlook for the next 24 months and are already heavily engaged with delivering the speed of transformation needed in both private and public sector organisations.”
Luke Cummings, Senior Consultant, Savanta said:
“The story this research tells is one of resilience through uncertainty; the consulting industry continues to report significant growth despite wider macroeconomic and political anxiety. While the number of those reporting that consulting activity had failed to meet expectations has increased marginally since last year, the broad picture remains positive.”
Attracting the best talent to consulting is crucial and 74% of respondents felt that the sector was better than most industries at doing this. A competitive salary remains key to most consultants (31%) while sociable hours of work and better work-life balance (18%), training and development (13%) and flexible/remote working (11%) were also important.
The consulting industry is continuing to become more accessible to those from a diverse range of backgrounds and MCA Member firms are increasingly widening the talent pool and undertaking initiatives to ensure diversity in the sector. This is reflected in the number of young consultants who attended a Russell Group university which has been declining steadily from 73% in 2011 to 45% in 2019 with a fall of 9% since last year.
In terms of job satisfaction, the key factors why firms retain talent are the variety of projects and work streams (14%) that consultants were involved with followed by the overall culture of the business (13%) and exposure to a diverse range of clients (12%). Flexible working conditions, learning and developing new skills and renumeration were also important.
Tamzen Isacsson, Chief Executive, MCA, added:
“Huge investment is being made by the sector to train and develop staff as well as attract and retain the very best talent from all backgrounds. It is encouraging to see firms are continuing to diversify their talent pools looking above and beyond the traditional routes and our firms are demonstrating massive efforts to improve diversity and inclusivity across their businesses.”
Almost three quarters of consultants are not actively seeking a new role either in consulting or a different industry. The MCA also surveyed the impact Brexit might be having on the likelihood for individuals to seek work outside of the UK. While almost two thirds of respondents see Brexit making little difference to whether they seek work outside the UK, 1 in 4 consultants are now more likely to look for more opportunities outside of the UK because of Brexit.
Independent market research agency Savanta, partnered with the MCA to collect and analyse member data for the 2020 report.