Strong growth is expected in the UK consulting sector this year due to intense demand from tens of thousands of clients in the UK and abroad in a period of unprecedented change and disruption. The latest Member Survey from the Management Consultancies Association (MCA) reveals that consulting leaders expect activity to increase by 13% in 2023 and 12% in 2024, demonstrating the crucial role that MCA member firms play in supporting clients through periods of economic uncertainty and change. Key areas expected to drive this growth include Digital and Technology, cost reduction, cyber security, sustainability, and achieving net zero goals.
It comes as the latest MCA figures show that 2022 saw growth of 25% for the consulting industry in the UK, which is now one of the biggest centres for consulting excellence in the world. The growth rate surpasses that of 18% in 2021 and 4.5% in 2020 and underscores the importance of consultants’ roles as trusted advisors as businesses deal with the economic consequences of Russia’s invasion of Ukraine, higher energy costs and the cost-of-living crisis, and an impending recession. This growth far exceeded the expectations of industry leaders, with half (48%) saying their firm’s growth was better than expected. However, 81% stated growth did not meet their expectations, mainly due to a loss of confidence by consumers and businesses in the second half of the year.
The Digital and Technology, Energy and Resources, and Health and Life Sciences sectors are expected to experience the biggest growth this year, followed by Financial Services. However, economic conditions understandably present the most significant challenge for 2023. A general economic slowdown is the biggest challenge facing firms (39%), along with reduced spend due to the economic conditions (31%) – both considerably higher than the 18% and 20% recorded respectively in last year’s survey. The challenge of an overall slowdown in the global economy has tripled since 2022 (28% in 2023 versus 10% in 2022).
Tamzen Isacsson, MCA Chief Executive, said: “In times of economic uncertainty and rapid change, the UK’s management consultancy industry continues to grow significantly due to consultants’ unique position as vital and trusted advisors as clients navigate unprecedented challenges. This strong demand for services means firms are recruiting intensively to meet demand and it’s positive that this survey shows more evidence that our sector is increasingly diverse and providing huge opportunities for talented individuals from across the UK regardless of their background or location.”
MCA members reveal in the survey that retaining and attracting the best talent remains a major challenge. A competitive salary remains the best incentive that consulting firms can offer (57% consultants agreed), followed by a better work life balance (39%). Despite this growth in consulting activity, 44% of consultants believe they have a better work-life balance compared to the previous year and this perception is similar between both men and women (43% and 46% respectively).
Coinciding with the improvement in work-life balance, 60% of those surveyed said they were more satisfied with their job as a result of the adoption of hybrid working. It was highest amongst those who had been in the consulting sector for less than five years (65% versus 54% who had been in the industry longer). On average, the days that employees wish to spend in the office match with the days they currently visit offices (2 days a week on average). The same applies to in-person visits to client sites with an average of 1.5 days per week. The issue of hybrid working will continues to be a major focus in the coming year as firms balance the needs of servicing their clients and managing employee demands.
Elements of the role that provided the most job satisfaction included remuneration (32%), flexible working conditions (30%) and the variety of projects and workstreams (28%). The appeal of a career in consulting and improved social mobility means that the industry continues to be more accessible to those from a diverse range of backgrounds The ongoing decline of young consultants who attended a Russell Group university signals a widening of the talent pool from 73% of young consultants attending a Russell Group university in 2011 to 35% in 2022. These figures reflect the continuous efforts that MCA member firms of all sizes undertake to increase opportunities for all.
A quarter (24%) of consultants said that learning and developing new skills is one of the most important drivers of job satisfaction. One in four consulting leaders reported that it is in their top three priorities for attracting and retaining the best talent. To support this need and provide a consistent industry-wide approach to standards and training, the Chartered Management Consultant Award was formally launched by the MCA and CMI (the Chartered Management Institute). Recent figures show the number of Chartered management consultants is growing 30% year on year.
Independent market research agency Savanta partnered with the MCA to collect and analyse member data for the 2023 report. Further information can be found at www.mca.org.uk
The Management Consultancies Association (MCA)
The MCA is the representative body for the UK’s leading management consulting firms. For over 65 years, the MCA has been the voice of the consulting industry, promoting the value of consulting to business, the public sector, media commentators and the general public. The MCA’s mission is to promote the value of management consultancy for the economy and society as a whole. The MCA’s member companies comprise over 50% of the UK consulting industry work with the vast majority of the top FTSE 100 companies and almost all parts of the public sector. The UK consulting industry is amongst the best in the world and a vital part of the business landscape. Click to see the full list of current MCA members see link.
Compliance with the MCA’s tough entry criteria and adherence to the principles of Consulting Excellence means that MCA member companies are widely acknowledged to provide high quality services to their clients. Many of their achievements are recognised in the annual MCA Awards.
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