- Most comprehensive and largest independent research on the consulting sector confirms 11% growth in 2023, 9% growth expected this year and a return to double digits in 2025 (11%)
- Growth in one of Britain's highest performing sectors returns to more sustainable levels following 20%+ records post pandemic
- AI and digital technology expertise on adaptation and adoption for clients as well as cost efficiency programmes will generate the biggest opportunities this year for consulting firms
- The background of consultants in modern Britain redefined as latest stats show more young consultants have never been to university than have attended Oxbridge
- Seven in 10 consultants are more satisfied with their job due to the widespread adoption of hybrid working
LONDON, Jan. 22, 2024 /PRNewswire/ -- A readjustment to more sustainable levels of growth for the consulting sector is expected in the next 12 to 24 months according to the latest survey undertaken by the MCA, the Management Consultancies Association. In the largest piece of research ever conducted by independent research firm Savanta Comres. The report reveals that AI and digital technology expertise is expected to be the area in most demand by clients as well as cost efficiency programmes but that there are concerns from leaders around the performance of the UK economy (41%) and the impact of reduced client spending (43%) as well as the broader global outlook for the economy.
The latest MCA figures show that consulting activity is expected to have grown by 11% in 2023 and 9% growth is expected this year with 11% growth next year, showing a continued strong performance in comparison with the rest of the economy. 73% of consulting leaders say growth met or exceeded expectations last year slightly lower than the previous year (85%) showing that growth is returning to more sustainable levels following an unprecedented period of client demand post pandemic when the sector achieved over 20% growth rates.
Several factors have contributed to the continued demand by clients including the requirement for expertise in specific areas such AI and digital technology and 94% of consultants believe client services related to AI and emerging technology will provide the biggest opportunity for expansion in consulting this year. However, some areas are expected to experience less growth for example in advisory on deals and a quarter of leaders predict consulting in the Retail and Leisure sector is most likely to continue to experience a slowdown in activity. Although still increasing, sustainability services are also predicted to grow at a slower rate as clients face economic challenges and focus more on the day to day running of their businesses.
Over 100,000 management consultants work in the industry in over 350 offices across the UK with 270 locations based outside of London and the survey is the biggest ever conducted of all consultants from leaders to the newest recruits who have joined the profession. The data collected confirms the increased diversity of talent working in the profession with more young consultants now recorded as never having attended university than have been to Oxbridge. The lower number of consultants who attended a Russell Group university also indicates that the industry is increasingly more inclusive attracting a broader pool of talent with firms now very much focused on the importance of social mobility. The percentage of young consultants who attended a Russell Group university has remained consistent with last year at 35% having declined from a peak of 73% in 2011.
Hybrid working continues to have a positive effect on those working in consulting with 69% reporting more satisfaction with their job due to its widespread adoption. It has also helped to make the sector more attractive to work in (72% v 64% in 2023) as firms optimise their remote working processes. It also contributed to a better work-life balance (28%) compared to the previous year with more women saying it has improved (34%) in the last 12 months compared to 26% of men.
Tamzen Isacsson, MCA Chief Executive, said:
"The outlook for our sector looks positive in 2024 and beyond despite the challenging economic conditions at home and abroad which confirms that at times of uncertainty clients rely on trusted advisors and are looking to our sector for specialist expertise on the safe adoption of AI, new technology and for boosting productivity and cost efficiencies. Business confidence however thrives in stable political and economic environments and 2024 is a busy year for elections across the world which could impact the broader economic outlook and growth rates for our sector. As a country we should be proud of our position as a leading centre for professional services in the world and encouraged by the continued growth in one of our highest performing sectors.
"It's clear that the shift to more hybrid working has made employees happier and the challenge will be to ensure the balance is right for everyone through seizing all the advantages of digital working and its flexibility and at the same time harnessing all the benefits of face to face working and its beneficial impact for learning and development and face to face interaction with clients and teams. As a sector that often leads by example our job will be to find the new positive and more complicated path forward in the world of working."
The impact of AI features greatly in the results of the MCA Member Survey 2024. Nearly all respondents (94%) believed that client advice and services relating to AI and emerging technologies will increase in the next year while over half (53%) said they were already using AI, including 75% of consultants working in the Big 4 firms. It is most used for searching for information (57%), enabling teams to use AI models (56%) and well as data analysis (54%) with benefits cited around improving time management. Adapting to AI developments (33%) is one of several challenges expected by the management consulting industry alongside reduced spend by clients (43%) and the general slowdown of the UK economy (41%). With a UK General Election expected in the Autumn, the uncertainty around the political landscape (28%) will also be challenging to the sector.
Independent market research agency Savanta partnered with the MCA to collect and analyse member data for the 2024 report. Further information can be found at www.mca.org.uk.
Notes to Editors:
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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