Consultancy Workforce Trends for 2014

Richard Stewart, Managing Director of Mindbench, looks at workforce trends for management consultancy in 2014.

Firms return to volume hiring

The first 5 months of 2013 were relatively muted in terms of hiring in management consultancy as confidence was sapped from the ongoing Eurocrisis. Figures from the CityUK showed that employment numbers in professional services workers in London shrank for the first time in 2 years, falling by 0.9% in the first half of 2013 to 669,600, a net loss of 6000 jobs. Insurance, legal services, accounting and management consulting staff all saw declines.

A shift occurred from early May, with market sentiment improving and the “green shoots” of recovery being openly talked about. Recruitment has picked up significantly since the summer across all sectors and functional areas of consultancy. Financial services remains the engine of growth with candidates with risk experience particularly in demand. We are also starting to see signs of renewed hiring in government related consulting areas such as health, local authorities and justice.

One of the Big 4 firms has dramatically increased its hiring intentions compared to previous years – and is adding consulting staff in several areas of their business including operational improvement, supply chain, and change management/organisation design.

Interestingly we are also seeing a marked increase in international hiring – and we are currently assisting firms to hire senior talent in the US, Central America, Middle East, Asia, Central America and even as far afield as New Zealand. There has been a large increase in hiring by internal consulting divisions of the banks and major corporates as well. We are assisting one high street retail bank which has a permanent consulting cadre of 80 people just focussing on their retail operation, and a major global insurance firm which has a division of over 150 internal consultants working in Europe.

Many other organisations have indicated that they will be looking for support in 2014 and are currently working out ambitious targets for hiring given the greater optimism in the market.

Retention expected to become more challenging in 2014

The challenge of retaining consulting staff receded during the recession but we can anticipate that with greater confidence in the economy generally and amongst consulting firms in particular, that it will become a more significant challenge in the years ahead.

Also the range of options open to management consultants has grown during the last 5 years – with more options for top management consultants to join internet and social media businesses – as well as internal consulting operations at major corporates.

Consulting firms will need to look again at all aspects of retention including perhaps offering some consultants more flexibility on how and where they work, looking at the development opportunities offered for their consultants, and also reviewing their compensation structures.

Interestingly, salaries paid to management consultants have only increased marginally since 2007, despite the cost of living increasing significantly during this 6 year period. With greater growth predicted for next year – and the coming years, we would expect the salaries to increase significantly.

Source: Top-Consultant.com

Greater consolidation in the consulting industry