The management consulting industry has changed the balance of its work dramatically in the last year, according to authoritative analysis from the industry’s trade association. Consultancies adapted quickly as recession hit the British economy in the 3rd and 4th quarters of 2008 and the needs of their clients changed.
A positive force for the economy is the latest report from the industry’s trade association, the MCA (Management Consultancies Association). It shows significant differences between 2007 and 2008 in the type of work being carried out by consultancies. There was a substantial rise during 2008 in the use of consultants by UK companies to increase productivity, raise performance and reduce costs.
In particular, spending on business process re-engineering was up by 31 per cent, and by 19 per cent on operations consulting. While IT consulting and programme/project management remain the largest services, even there the focus has shifted significantly towards work that helps clients adjust to the demands of a shrinking economy and a tougher economic climate.
Alan Leaman, Chief Executive of the MCA, commented:
“The downturn hit fast and furious in the second half of 2008. Management consultancies adapted quickly by focusing intensely on the new needs of their clients. The consulting industry is helping business through the pain of this recession, and also equipping companies to prosper once the recovery comes.”
UK based consulting firms increasingly win business abroad…
The MCA estimates that management consultancy contributed £914million in exports to the UK in 2008. The Government-sponsored Professional Services Global Competitiveness Report recently stated that “UK management consultancy is a world leader”. This is reflected in demand for British consultants around the globe, with particularly strong growth in the Middle East and significant opportunities in Asia.
Alan Leaman said:
“The reputation of UK based consulting firms is on the rise around the world as overseas organisations increasingly recognise the depth of knowledge, skills and experience within the sector.”
UK consulting still growing but at a slower rate…
The UK consulting industry continued to grow overall in 2008, though at a much reduced rate compared with recent years: 5 per cent growth in the past year compares with 10 per cent in 2007 and a peak of 27 per cent in 2005. The MCA estimates that the total industry in the UK is now worth around £9billion and employs more than 55,000 people.
Other findings in the MCA report include:
· Financial services and manufacturing both saw falls in spending on consulting in 2008, down 6 per cent and 3 per cent respectively
· The sectors with the largest growth in consultancy spend were Resources/Energy and Construction/Transportation, both recording 8 per cent growth
· Environmental consultancy continues to show significant growth, up 31 per cent to £77m.
· There has been some further growth in employment in the industry during 2008 as consultancies fight to win and retain business through the quality of their staff
Alan Leaman concluded:
“Management consultancy is certainly not immune from the recession and we know that 2009 will be an exceptionally tough year for the industry. But this data also shows how resilient it is, and how quick firms have been to spot what their clients need in the downturn. The value of working with expert and independent outsiders is, if anything, even greater in these difficult times.”
A positive force for the economy
is sponsored by Prism Executive Recruitment. To download a copy, please go to www.mca.org.uk
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About the Management Consultancies Association
The MCA was formed in 1956 to represent the consultancy industry to its clients, the media and government. Management consultancy is an increasingly important industry for the UK economy with management consultancy revenues for 2008 estimated at around £9bn. MCA members represent around 70% of the UK consulting sector, employ around 30,000 consultants and work with most of the FTSE100 and all government departments. Eight of the top ten UK-based consulting firms (by consulting fee income) are members.
The MCA supports its member firms with a range of services including events, publications, interest groups and public relations. The Association also works with its members to attract the top talent into the industry. The MCA provides advice on the selection and use of management consultants and is the main source of data on the UK market. www.mca.org.uk
About this report
The MCA’s a positive force for the economy report has been compiled using statistics provided by MCA member firms, covering the calendar year 2008. In this year’s report, the focus is entirely on management consulting. The MCA has also segmented the consulting industry by type of firm, to show, where possible, how these segments have fared differently.
The MCA estimates that MCA firms currently represent about 70 per cent of the UK consulting market in terms of fee income.
Estimates have been included in the few cases where individual firms have not been able to provide some of the information requested. Unless otherwise stated, the figures are as reported by MCA member firms; where like-for-like comparisons have been made, adjustments have been made to reflect changes in the MCA membership.
Management consulting covers the following services:
- Human resources
- Change management
- Programme/project management
- Financial management
- Business process re-engineering
- Economic and environmental consulting
- Marketing/corporate communications
- Outsourcing advice
- IT consulting (e.g., IT architecture and design and IT strategy).
Please note: while the MCA has made every attempt to ensure that all figures are an accurate reflection of its members’ fee income, deciding where one consulting service starts and another ends can be difficult. The analysis of the breakdown of consulting fee income by service line should therefore be read as an indicative, rather than definitive statement of overall trends.
About the Sponsor
Prism Executive Recruitment specialises in recruitment solutions for executive, managerial and other appointments within the Management Consultancy, Systems Integration, and Outsourcing markets as well as major Corporates.
Prism was established in 1997 and handles a wide range of appointments in these sectors with the common theme being provision of first rate consulting and IT services professionals. Whilst Prism has a UK focus it also successfully fills roles in Europe.