Sunday, January 23, 2011
A Source report released today (23rd January 2011) finds that half of consulting firms have recovered from staff losses as a result of the recession…
A new report[1] published today has found that a shortage of senior management consultants in the UK, combined with an increasing demand from clients for more senior skills, is forcing a third of consulting firms to turn away work.
At the same time, more than half of consulting firms have recovered from the staff losses they suffered as a result of the recession, with the financial services sector seeing significant increases in the number of consultants. The report says that this growth in headcount has happened relatively recently, fuelled by a growing expectation that the worst of the downturn is over and that clients are starting to spend again. The recruitment demand is at its strongest at senior levels.
Taking a closer look at the financial services sector, almost three quarters (72 per cent) of consulting firms increased the number of consultants in their financial services practice; nearly half by more than 20 per cent. Over the next six months nearly all firms (92 per cent) expect to increase headcount in this area, and two-thirds of those expect to do so by more than 20 per cent.
Ed Haigh, Head of Content and Marketing at Source commented:
“The increasing shift towards recruiting the best senior people isn’t just a sign that consulting firms are trying to recoup recent losses as a result of the recession, but it reflects clients’ increasing desire to work with – and willingness to pay for – more experienced people, rather than junior consultants.
This has the potential to change both the structure of many firms and the basis of competition.”
Public sector – firms expect consultant numbers to rise
Surprisingly, over half (54 per cent) of firms expect the number of consultants in their public sector practice to grow. Given that the talk in central government departments is of a moratorium, rather than a mere reduction in consulting spend, the report says that this may surprise many people.
The report says that there may be three possible explanations for this predicted rise in public sector consultants:
- Consulting firms are simply in denial about the scale of cutbacks in the public sector.
- There will still be areas of the public sector that are spending on consulting services. This holds some water: as a previous Source report on the current state of management consulting in the public sector found that not all public sector organisations will cut back to the extent central government departments have. Health, where the GP commissioning initiative is being rolled out, is a notable case in point.
- Demand for some firms is expected to be relatively strong. Big Four firms, mid-sized operational firms, and some small specialists top the list.
Operational performance experts in demand…
Nearly six in every ten firms say they’ve increased the number of operational performance consultants over the last six months and an even greater proportion – about eight in every ten firms – say they expect to do so in the next six months.
Richard Stewart, Founder of Mindbench, sponsor of the report, concluded:
“The best people have always been the hardest to find, but when finding them becomes a commercial imperative – one linked to the very model which firms operate – then it’s vital that HR directors have a coherent strategy in place to turn challenge into opportunity.”
For further information on the Source report, The balancing act: trends in consulting firm recruitment, sponsored by Mindbench, contact Julie Cleasby on 020 3178 6445.
[1] The findings of this Sourceforconsulting.com report surveyed 60 management consulting firms, which is equivalent to around 50 per cent of the UK’s consulting market.