- UK consulting revenues nearly double in five years from 10.56bn to £20.4bn as sector records double digit growth in 2023 driven by digital tech transformation and energy and net zero specialist advice
- Exports up £3bn in 5 years and now 28% of overall revenue
- More jobs created outside London than in capital and number of regional offices increases
- Number of jobs industry supports across UK jumps 66% in 5 years from 30,000 (2018) to 50,000 (2023) but slightly down on last year as attrition rates remain low
- Training and development increases by 12% across industry as firms invest in high tech skills for future
The UK consulting sector’s increasing success is evident in the latest annual report from the Management Consultancies Association (MCA) which reveals that the industry has grown almost twofold in the last five years according to independent research collected by Savanta. The growth rate for MCA member firms in 2023 was 11% and projections for the broader industry show that the consulting sector, in terms of revenue, has risen from £10.56bn in 2018 to £20.4bn in 2023, making it the second largest consulting sector worldwide. UK consulting is shaping up to be the go-to industry for the world’s governments and business as they embrace the AI revolution and net-zero future and firms of all sizes saw growth, mainly driven by large firms (up 13%), due to ongoing projects from existing clients and a surge in demand from sectors such as Energy and Resources (up 38%), Transport (13%) and Financial Services (11%).
One of the factors behind this success is the growing demand for UK consulting firms from clients worldwide. The rise in the export of services has continued as 28% of UK fee income now comes from abroad – an increase of £3bn in five years as global clients increase requirements for British based expertise in both traditional areas of competence and new and emerging high-growth sectors. Fee income from Europe remained strong (15% and the same as in 2022) while beyond the UK and Europe, the US was the most popular market followed by regions such as Australia, Japan and the UAE.
Tamzen Isacsson, MCA Chief Executive, said:
“During this taxing period of change and uncertainty, consultants are called upon as trusted advisers and sector specialists, offering experience and expertise, especially in tech, cyber security and net zero. Our sector is a great British success story generating increased productivity and efficiency for UK based businesses and proudly exporting record services overseas. British management consultants are helping tens of thousands of clients across the globe to navigate a shifting landscape, assisting them as they adapt to a future where multipolarity, net zero and artificial intelligence are the new normal. We are also operating in a challenging economic climate where the focus for clients is the competing demands of ensuring survival, reducing costs and at the same time trying to be leading edge.”
Due to the demand from clients, the consulting workforce has expanded significantly over the last five years up by 66% from 30,000 employees in 2018 to over 50,000 in 2023, although the overall headcount fell by 3% from the year before. This was due to firms readjusting their workforce and a sharp slowdown in the attrition level from 17% in 2022 to 12% in 2023.
For the first time ever, more new hires were recruited outside the capital than within London (52% v 48%) with consulting firms helping to drive regional growth across the UK in 312 regional offices. New hires included 2,348 graduates and 736 school leavers. Small and medium-sized firms have the highest proportion of employees outside of London with the North-West and South-West having the highest proportion of staff. Manchester, Leeds, Bristol and Edinburgh continue to be the most common locations as hybrid working and changes in the consulting workforce has led to the opening of the sector to a wider range of talent. As well as younger consultants, these opportunities have also meant that more professionals with experience in other sectors are joining consulting to ensure that clients have specialist expertise in a variety of complex areas.
The consulting industry itself is experiencing a period of change and transition regarding the reskilling of its workforce in areas such as technology and sustainability expertise. This reshaping is vital to ensure MCA member firms are meeting the future opportunities of client demand and remain competitive globally. As part of addressing these changes, the average consultant spent 8.4 days on their personal training and development, an increase of 12% since 2022. Focus has included GenAI training and the Chartered Management Consultant Accreditation (ChMC), which currently has over 1,300 consultants achieving Chartered status.
More firms than ever are collecting diversity and inclusion statistics to help ensure that this workforce reflects the clients and society that they serve. As well as a slight improvement in the number of women in the workforce, there has been an increase in female leaders with a 10% advance since 2018, as nearly a third of partners are now women (31%). Although the proportion of minority ethnicity representation aligns with the working age population, progress on Black representation at the senior and partner level continues to underperform with 1% of employees at this level reporting this ethnicity for the fourth year in a row. Those who identify as LGBTQ+ however has increased from 4% to 7% in 2023, while 6% are living with a disability and 4% with a neurodiversity condition and are all categories where the proportion of firms collecting data has increased.
Tamzen Isacsson, MCA Chief Executive, added:
“As the UK looks to level up, making the most of our fantastic regions, cities and towns, consulting is driving regional growth too. For the first time ever, more consultants were hired outside the capital than inside it and there has been a substantial rise in the number of offices.
“Our industry is also increasingly becoming more representative of the society we serve. In the last year, there has been positive progress in female representation, as well as those with a disability, neurodiversity and those who describe themselves as LGBTQ+. However, in a period of rapid change our focus and efforts on this agenda remain vital and more work needs to be done to ensure greater diversity at leadership level.
“Following record hiring in the industry in 2022 and a reduction in attrition, coupled with a return to more normal levels of consulting growth, some firms have slowed recruitment while others have made redundancies to adapt, leading to a lower overall headcount than the previous year however overall, the headcount has increased significantly in the past 5 years.”
The MCA’s Annual Industry Report 2024 provides an unrivalled assessment of the performance of the leading consulting firms in the UK which are part of the trade body the Management Consultancies Association. The report examines fee income data provided by member firms over recent years to identify the size, diversity, and growth trajectory of consulting activity of MCA members, as well as the wider consulting industry. Independent market research agency Savanta, partnered with the MCA to collect and analyse industry data for the 2024 report.
Further information can be found at www.mca.org.uk