No-luxe Benelux

By B.J. Richards

Times have certainly been tough in the Benelux consulting market.  After a 3% contraction in 2012, 2013’s 0% growth actually came as something of a relief.  Source is predicting the market will finally make some gains this year -- we’re predicting 1-4% growth across the region’s three countries -- but with the Eurozone recovery largely grinding to a halt, it could still be a while before this market is truly back on track.

The lack of consulting growth certainly hasn’t been for lack of hustle – it’s simply a case of there not being much money to go around and cash-strapped clients being loath to engage in any spending they can possibly avoid.  But while they can’t afford to splash out on services they may consider luxuries (we’re looking at you, talent and leadership development), most are doing well enough to at least start buying the necessities again.  That might not sound like much to celebrate – won’t they, by definition, be buying necessities anyway? -- but anyone who remembers the darkest days of the financial crisis will well remember watching as clients’ businesses fell down around their ears for want of money to spend.  At the very least, the Benelux businesses of 2014 will not have to endure such a fate.

So, what are the must-have services that Beneluxians are still buying during these lean times?  Unsurprisingly, financial services and risk management – a perennial favourite in consulting markets around the globe – is still doing quite well, largely owing (again, as elsewhere) to the fact that regulatory compliance is a literal must-have in that clients are legally compelled to comply.  If you only have so much money to spend, this is where you’ll spend it.

Slightly more discretionary are the large sums that are still going to technology consulting.  While the somewhat more luxe-feeling new technology services are of growing importance here, much of the work happening right now is not about innovation but rather about playing catch up.  During the hardest of the hard times, many clients let the back office fall into disrepair, and they now find themselves with creaky IT systems they can no longer afford to ignore.  After all, tech upgrades are only a luxury for so long before they become a necessity.

Finally, we note that things are also generally OK in operational improvement.   As you might expect, expenditures here are all about slashing costs, being more efficient, and saving money.  The bad news for consultants is that budget-conscious would-be clients are opting to do a lot of this work themselves.  The good news is that some of the better-off are planning to use their new discretionary funds to take on big, fundamental changes to their business model, engaging in the sort of transformation that few would embark upon without a consultant’s counsel.  While such ambitious projects might not be right for every client, when they do happen, they tend to make for quite juicy pieces of work, which is one reason we expect this area to see growth in 2014.

So, while we don’t predict Benelux clients will be spending much money on luxuries in the immediate future, things are looking up – especially for those peddling the must-haves.  And who knows?  Help them get their shops in order with these critical services now, and they could be back to feeling fit and spendy sooner than you ever expected.