International work carried out by UK-based management consultancies has more than tripled in size since 2011, finds a new Half Yearly Report, published today (24th September 2012) by the Management Consultancies Association (MCA).
The report, Consulting in a Climate of Uncertainty, found that MCA member firms reported almost a fifth (17 per cent) of their work now comes from international markets compared to just 5 per cent last year. The Eurozone and Middle East are where most firms anticipate more growth in 2012 and next year.
Alan Leaman, CEO at the MCA, said:
“UK consulting firms are at the centre of developments in the digital economy – advising organisations across the globe on how to capitalise on innovations such as cloud computing and so-called big data. Firms are also particularly seeing a demand for cyber security and regulatory compliance work.”
Despite the challenging economic backdrop in the UK, fee income continued to grow – up 5 per cent in the first half of 2012 on the previous year, and 94 per cent of firms said that they are anticipating further growth. Sectors earmarked for strong growth include resources and energy, telecoms and the services sector.
The combination of growth both domestically and internationally has also led to a continued rise in employment, with almost two thirds (61 per cent) of firms expecting their number of consultants to grow in 2012. This is the third year in a row that firms have grown their talent base, a positive sign of investment in the consulting industry.
Alan Leaman, CEO at the MCA, added:
“With a slower pace in the UK markets, there is a real drive for exporting UK consultancy. We’ve seen a major rise in the amount of work UK consultancy firms are looking for overseas; whether this is small firms growing their business, or international firms turning to their UK based consultants as they have the skills that are in demand across the world.”
The report also found that financial services, which saw strong growth in 2010 and 2011, is still seen as a potential growth area for consulting in 2012, though not as strongly as in recent years. There are still many challenges for Financial Services firms but the pace of change has slowed while banks wait for clarity on legislation from the UK and EU.
In contrast, the decline in public sector work has slowed, but the report says that a lack of progress on the Government Procurement Service’s ConsultancyOne framework is adding to difficult market conditions, and particularly hurting SMEs. The report also found that the growth in manufacturing work has slowed after a stronger 2011.
Recession impacts on environmental consulting
The recession has led to a marked decline in environmental consulting. While some firms still use their environmental credentials as a differentiator, the market hasn’t shown real growth throughout the recession.
Consultants adapt well to changing client requirements
The report also found that consultancies have adapted quickly to changing client buying habits, including longer bidding processes and a shorter horizon for projects. The general economic uncertainty and the Olympics led to many firms observing that clients were reluctant to forward plan and commit to big projects in the first half of the year. Where there are large projects on the horizon, clients are quite often cutting them into segments to go onto the market, offering smaller shorter projects where in the past there would have been one large one.
-ENDS-
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David Pippett Director DWP Public Relations Tel: 01225 459676/Mobile: 07899 798197 |
About the report
This report has been compiled using statistics provided by the Management Consultancies Association’s (MCA) members and other consulting firms, covering the calendar year 2012. We estimate that these firms currently represent about 60% of the UK consulting market in terms of fee income. It is part of the MCA’s Industry Research Programme, which includes the publication of three other reports about the UK consulting industry.
The half year survey, is a quicker look at the progress that has been made in the year, getting MCA member firms to evaluate their performance in the first six months of 2012, and asking them to make predictions for the second half. Members are also asked to make comments on the year to date. These comments are used anonymously throughout the report.
The term ‘fee income’ is used throughout the report to denote the UK management consulting fee income of the MCA members and other consulting firms that contributed their data to this report. Unless otherwise stated, the figures are as reported by these firms; where like-for-like comparisons have been made, adjustments have been made to reflect changes in the MCA membership. Any small differences between the totals in tables are the result of rounding.
About the Management Consultancies Association
The Management Consultancies Association (MCA) is the representative body for management consultancy firms in the UK. Our sixty member companies comprise around 70% of the UK consulting industry, estimated to be worth £9bn in 2008, employ more than 40,000 consultants and work with over 90 of the top FTSE 100 companies and almost all parts of the public sector.
The MCA’s tough entry criteria and rigorous Code of Practice mean that MCA member companies are widely acknowledged to provide high quality services to their clients. Many of their achievements are recognised in the annual MCA Management Awards and the Consultant of the Year Awards.
The MCA informs and influences public debate on topical issues, and provides authoritative data on the industry. It commissions research and policy analysis and represents the industry in discussions with Government and other stakeholders. The MCA also facilitates networking and the sharing of best practice within the industry through events, publications and initiatives such as the Young MCA.