Benelux - is it worth the bother?

By Zoe Stumpf

We’ve spent the last few weeks in the Benelux region – not literally, you understand, but speaking to consultants and senior clients about the state of the market.  Doubtless to the great relief of all concerned, the conclusion of our newly-published Benelux consulting market report is that the market has at last returned to growth in 2014, albeit at a very modest level.

There are, however, some people who might wonder why we are really bothering to do this (that includes us, too, from time to time). “It’s a silly market to deal with as a separate entity,” one consulting leader told us. “It’s just too small.” It’s an interesting comment, not one we hear about the Nordics or the GCC which are only slightly larger markets. But both of these markets are seeing decent levels of growth and there’s the promise of more decent growth to come. In Benelux, leaving aside the very tiny Luxembourg market, a mere 2.5% growth follows seven long years of poor performance.

But that’s not the only issue. The local client base is under threat with many larger clients either being acquired by foreign companies or moving their head offices out of the region. Moreover, competition is intense, with an army of freelancers – the zelfstandige zonder personeel (ZZP) in the Netherlands specifically – able to offer both experience and low rates – a potent combination.

But although a lot of smaller firms have gone out of business in the last few years, most of the major ones are still present here, presumably concluding that the market is indeed worth the bother. Those bigger firms have two advantages; they are much more likely to be working with bigger clients, who are more likely to be multinationals and therefore less constricted by the limitations of the local market; and also have a size and degree of specialism that mean that they will not often be competing for the same work as the ZZPs. And one has to take off ones collective hat to those smaller and mid-sized firms who have managed to survive. Those who have done so have focused keenly on their differentiation and have weathered enough storms that they are pretty much ready to take on any situation.

There are some positives on the horizon. With some promising new companies investing in the region, a growing interest in digital and this track record of survival, maybe it’s too early to give up on this small market quite yet – but it’s unlikely to be topping our market attractiveness study index any time soon.