- Consulting activity expected to grow by 13% in 2023 and 12% in 2024, as MCA member firms experience a significant increase in demand from clients during period of disruption and change
- It follows estimated growth of 25% in 2022 by the sector due to a large increase in client work on digital transformation, cost reduction and sustainability
- 60% of those surveyed said they were more satisfied with their job as a result of the adoption of hybrid working
- Number of young consultants from a Russell Group university continues to decline opening up consulting to a greater pool of talent
- A quarter of consultants say learning and developing new skills is one of the most important drivers of job satisfaction as new figures show 30% increase in number of Chartered Management Consultants
Strong growth is expected in the UK consulting sector this year due to intense demand from tens of thousands of clients in the UK and abroad in a period of unprecedented change and disruption. The latest Member Survey from the Management Consultancies Association (MCA) reveals that consulting leaders expect activity to increase by 13% in 2023 and 12% in 2024, demonstrating the crucial role that MCA member firms play in supporting clients through periods of economic uncertainty and change. Key areas expected to drive this growth include Digital and Technology, cost reduction, cyber security, sustainability, and achieving net zero goals.
It comes as the latest MCA figures show that 2022 saw growth of 25% for the consulting industry in the UK, which is now one of the biggest centres for consulting excellence in the world. The growth rate surpasses that of 18% in 2021 and 4.5% in 2020 and underscores the importance of consultants’ roles as trusted advisors as businesses deal with the economic consequences of Russia’s invasion of Ukraine, higher energy costs and the cost-of-living crisis, and an impending recession. This growth far exceeded the expectations of industry leaders, with half (48%) saying their firm’s growth was better than expected. However, 18% stated growth did not meet their expectations, mainly due to a loss of confidence by consumers and businesses in the second half of the year.
The Digital and Technology, Energy and Resources, and Health and Life Sciences sectors are expected to experience the biggest growth this year, followed by Financial Services. However, economic conditions understandably present the most significant challenge for 2023. A general economic slowdown is the biggest challenge facing firms (39%), along with reduced spend due to the economic conditions (31%) – both considerably higher than the 18% and 20% recorded respectively in last year’s survey. The challenge of an overall slowdown in the global economy has tripled since 2022 (28% in 2023 versus 10% in 2022).
Tamzen Isacsson, MCA Chief Executive, said:
“In times of economic uncertainty and rapid change, the UK’s management consultancy industry continues to grow significantly due to consultants’ unique position as vital and trusted advisors as clients navigate unprecedented challenges. This strong demand for services means firms are recruiting intensively to meet demand and it’s positive that this survey shows more evidence that our sector is increasingly diverse and providing huge opportunities for talented individuals from across the UK regardless of their background or location.”
Minister for Industry and Investment Security, Nusrat Ghani said:
“This encouraging survey from the MCA highlights the continued strength and growth of the vibrant UK consulting sector.
“Growing demand in areas such as digital transformation and sustainability advice is already creating thousands of new jobs across the UK, including opportunities for school leavers and young apprentices – advancing the latest technologies and setting us firmly on the path to Net Zero.”
MCA members reveal in the survey that retaining and attracting the best talent remains a major challenge. A competitive salary remains the best incentive that consulting firms can offer (57% consultants agreed), followed by a better work life balance (39%). Despite this growth in consulting activity, 44% of consultants believe they have a better work-life balance compared to the previous year and this perception is similar between both men and women (43% and 46% respectively).
Coinciding with the improvement in work-life balance, 60% of those surveyed said they were more satisfied with their job as a result of the adoption of hybrid working. It was highest amongst those who had been in the consulting sector for less than five years (65% versus 54% who had been in the industry longer). On average, the days that employees wish to spend in the office match with the days they currently visit offices (2 days a week on average). The same applies to in-person visits to client sites with an average of 1.5 days per week. The issue of hybrid working will continues to be a major focus in the coming year as firms balance the needs of servicing their clients and managing employee demands.
Elements of the role that provided the most job satisfaction included remuneration (32%), flexible working conditions (30%) and the variety of projects and workstreams (28%). The appeal of a career in consulting and improved social mobility means that the industry continues to be more accessible to those from a diverse range of backgrounds The ongoing decline of young consultants who attended a Russell Group university signals a widening of the talent pool from 73% of young consultants attending a Russell Group university in 2011 to 35% in 2022. These figures reflect the continuous efforts that MCA member firms of all sizes undertake to increase opportunities for all.
A quarter (24%) of consultants said that learning and developing new skills is one of the most important drivers of job satisfaction. One in four consulting leaders reported that it is in their top three priorities for attracting and retaining the best talent. To support this need and provide a consistent industry-wide approach to standards and training, the Chartered Management Consultant Award was formally launched by the MCA and CMI (the Chartered Management Institute). Recent figures show the number of Chartered management consultants is growing 30% year on year.
Oliver Worsfold, Director at Savanta, added:
“This year’s data shows that the management consulting sector continues to provide invaluable support to clients as they navigate shifting geopolitics, supply chain disruption and unprecedented levels of inflation. The result of this is a thriving sector, growing 25% over 2022 and with expectations of further growth into 2023 and 2024.
“The proportion of consultants from a Russell Group university has more than halved over the last decade (73% in 2011 vs. 35% in 2022), showing how far the industry has come in attracting and retaining a diversity of talent. It can be a welcoming and inspiring home for young people from any background. This is further demonstrated by the high numbers of school leavers and apprentices that enter the sector every year.”
Independent market research agency Savanta partnered with the MCA to collect and analyse member data for the 2023 report. Further information can be found at www.mca.org.uk